A booming market for condominiums, twin homes and town homes lifted Salt Lake County’s residential real estate sales to the third highest overall total ever last year — and 2018 looks to be even better.
Strong population and economic growth, coupled with low mortgage rates, propelled the demand for owner-occupied multifamily housing units in 2017, according to the annual housing forecast released last week by the Salt Lake Board of Realtors.
“For the sixth consecutive year, the average mortgage rate was below 4 percent,” noted the report’s author, James Wood, the Ivory-Boyer senior fellow in the University of Utah’s Kem C. Gardner Policy Institute. Even with interest rates being raised slowly, he believes ongoing growth will extend the surge another year.
In all, 17,804 housing units were sold in 2017. That included:
Single family home sales
• 13,293 homes sold, down 3 percent from last year but still well above the 10-year average
• The median sales price was $325,000, up 10 percent over 2016
• The cumulative value of those sales reached $4.9 billion, an 8 percent year-over-year jump.
Multi-family unit sales
• Hit the highest level ever, with 4,500 condominiums, twin homes and town homes sold, up 4 percent
• Median sales price hit $225,000, an 11 percent increase
• Cumulative sales topped $1 billion for the first time ever.
The strong demand for housing is unlikely to abate, Wood said, because the population is still increasing through internal growth (8,500 people) and in-migration (another 6,900). That steady demand has kept the number of listings stable for four years at a low figure — around 22,500 units at any given time.
“Demand will also be given a boost by buyers jumping into a market hoping to beat higher interest rates,” he added, anticipating all housing sales will top 18,000. But he doubts they will eclipse the all-time record of 18,907, set in 2006.
Wood also believes double-digit percentage price increases are unlikely in 2018, although they’ll still be good, more in the range of 7 to 8 percent. That would raise the median sales price of a single family home in the county to $350,000.
With total sales values climbing toward $6.6 billion, up from $5.7 billion in 2017, Wood said real-estate agents will be looking at collecting commissions of almost $400 million this year — a collective $40 million bump from year to year.
A few other figures stood out:
Sales by city
• Of the 17,804 total units sold in the county, 4,213, or nearly 25 percent of the properties were in Salt Lake City, followed by:
• West Jordan — 1,796
• Sandy — 1,617
• West Valley City — 1,499
• South Jordan — 1,437
Although median sales prices have risen 50 percent since 2011 — from $216,431 to $325,000 — Wood said a household earning the median income could afford 65 percent of the homes sold in the county. He cited historically low mortgage rates.
Most analysts foresee mortgage expenses increasing over the next year, he added, but staying below the 5 percent threshold seen as favorable to preserving housing affordability.
Mortgage rate predictions
• National Association of Realtors — 4.5 percent
• Mortgage Bankers Association — 4.6 percent
• Freddie Mac — 4.6 percent
• CoreLogic — 4.7 percent
• Realtor.com — Rate will average 4.6 percent, but end year at 5 percent