Prices are plunging on Salt Lake County homes, but the days of ‘easy sales’ are past. Here’s why.

Rising interest rates have scared away many Wasatch Front shoppers, especially first-time prospective buyers.

(Chris Samuels | The Salt Lake Tribune) A for-sale sign in a neighborhood in Sandy, Friday, Nov. 4, 2022.

Prices on a median-priced single-family home in Salt Lake County have plunged by almost $50,000 in three months.

Even so, sales are down sharply across the Wasatch Front because interest rates keep ticking up.

Prospective buyers have way more to choose from in more neighborhoods, and sellers are increasingly willing to cut deals and offer concessions. But such signs of easing real estate markets almost don’t matter, especially if you’re trying to buy your first home.

With interest rates on the standard 30-year mortgage floating around 7% after several rate hikes by the Federal Reserve, new numbers released Friday point to a stark hard-dollar fact:

Even with a two-year spike in home prices now slowing in Utah’s main population centers, monthly payments on what’s available out there remain beyond the reach of most buyers, especially first-timers.

[Go to www.sltrib.com/homeprices to see home prices and sales in the five-county region by ZIP code.]

The latest research shows three-quarters of Utahn households cannot afford the state’s median-priced home.

“There may be decreases in the asking price, but you’re increasing the mortgage payment. So you’re adding to the inflationary pressure. You’re not decreasing housing costs,” said Dejan Eskic, chief economist for the Salt Lake Board of Realtors and a senior researcher at the University of Utah’s Kem C. Gardner Policy Institute.

“Housing is the sacrificial lamb of the Fed right now,” said Eskic, noting that average payments have grown by 55% in a year.

(Chris Samuels | The Salt Lake Tribune) A home under construction in West Valley City, Friday, Nov. 4, 2022.

Wasatch Front home sales are down by between 22% and 30% from a year ago across the five-county region centered on Salt Lake City, according to new data for July, August and September — a time when homes sale usually swing upward.

Declines were sharpest in Salt Lake County, where all but two of its 36 ZIP codes saw double-digit sales drops compared to a year ago, spanning all available price ranges.

Condominium prices on the Wasatch Front — a housing type that typically has drawn bargain hunters — fell even more sharply than single-family homes, down 24% in Davis County, 34% in Salt Lake County, 43% in Tooele County.

Job losses are starting to show up in Utah’s residential real estate, mortgage and title sectors, and “the days of easy sales,” a spokesperson for the Board of Realtors said, “are pretty much over.”

Any relief on prices or home supplies? Yes.

(Chris Samuels | The Salt Lake Tribune) A for-sale sign in a neighborhood in Cottonwood Heights, Friday, Nov. 4, 2022.

Galloping prices in Salt Lake County since April 2020 appear to have peaked in the second quarter of this year, at $637,000, and have since nudged down 7% in just three months, to $590,000 — but that is still above where it was in fall 2021.

Utah County’s median price is now the region’s highest, at $599,900. Davis County had the third highest median at $540,000, Tooele County was next, at $470,00, and Weber County’s was $435,000.

Utah County also has the Wasatch Front’s only million-dollar ZIP code: Alpine, with a median sales price of $1.2 million. Salt Lake County’s top price zone is in Draper, at $870,000.

Inventories of homes for sale across the region are between three and four times higher now than at their pandemic lows, and homes are spending more days on market. Statewide, there were 14,509 listings as of Wednesday — a third of them, Eskic noted, already under contract.

All of that has helped some buyers drive better bargains, according to Eskic, including write-downs on interest points, home repairs, bargains on home warranties and other concessions from sellers.

“If you’re a financially able buyer,” Eskic said, “you have a lot of opportunity right now. You have bargaining power, and you have a lot to choose from.”

Redfin, the online real estate brokerage, said its agents reported many first-time buyers — especially in the Mountain West and Midwest — returning to the market to take advantage of having more time to shop, do more thorough inspections, and make more successful offers.

Plight of many first-time buyers is getting worse

(Chris Samuels | The Salt Lake Tribune) A for sale sign in a neighborhood in Cottonwood Heights, Friday, Nov. 4, 2022.

Across the country, though, the share of first-time buyers who bought a home dropped to 26%, a record low, according to the National Association of Realtors. The average first-time buyer was 36 years old, the trade group said, an all-time high.

Jessica Lautz, the association’s vice president of demographics and behavioral insights, said in a statement those trends were not surprising, given the combination of historically low inventory for homes, persistently high home prices and escalating interest rates.

First-time buyers are trending older, Lautz said, because they’re having to save longer for a down payment or relying on financial help from older generations to boost them into homeownership.

The median expected time that first-time buyers were remaining in their home before moving was 18 years, the association said, the highest ever tenure on record and up from 10 years in 2021.

Existing homeowners, on the flip side, “have fared very well in the current real estate market,” Lautz said. ”Those who have housing equity hold the cards.”

Most and least expensive neighborhoods

(Chris Samuels | The Salt Lake Tribune) A home for sale in Sandy, Friday, Nov. 4, 2022.

New data shows suburban Draper has Salt Lake County’s most-expensive ZIP code, at $870,000, followed by Salt Lake City’s 84103, spanning the Avenues, Capitol Hill and the mouth of City Creek Canyon, at $851,500. East Sandy’s 84092 is at $816,250.

The county’s least-expensive neighborhoods are in Copperton’s 84006 and west Salt Lake City’s Glendale, both with a $410,000 median, followed by West Valley City’s 84119, at $425,000.

Alpine in Utah County tops the five-county region with that $1.2 million figure and the county’s next most-expensive areas are Mapleton’s 84664 ZIP code, at $797,956, and Lindon’s 84042, at $785,000.

Utah County’s lowest median prices are in Provo’s 84601, at $450,000, and 84606, at $477,500.

For Davis County, the highest prices are in Farmington’s 84025, at $753,000, and Kaysville’s 84037, at $659,990. The lowest prices there are in Layton’s 84041, at $448,500, and Clearfield’s 84015, at $444,700.

Weber County’s top home prices are in the bucolic Ogden Valley — Eden’s 84310, at $898,750, and Huntsville’s 84317, at $670,000, while the lowest are in Riverdale’s 84405, at $420,000, and Farr West’s 84404, at $409,000.

In Tooele County, the priciest neighborhoods are in Stockton’s 84071 and Grantsville’s 84029, with medians of $665,400 and $490,000, respectively. That county’s least-expensive homes are in the city of Tooele’s 84074, at $460,000.

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