Current Market Report
MAY HOUSING WATCH
TWO CONSECUTIVE MONTHS OF RISING HOME SALES
More homes were sold in May compared to May 2018 in Salt Lake County and Davis counties, according to UtahRealEstate.com. In Salt Lake County, home sales were up 10 percent. The gains followed a strong showing in April. Previously, sales had been down in Salt Lake County for six consecutive months (October through March).
The price of homes continued to rise. In Salt Lake County, the median price of homes (all housing types) sold in May was $348,989, up 9 percent compared to the May 2018 median price. In Davis County, the median price increased 10 percent to $330,000.
Nationally, total existing-home sales were down 1.1 percent from a year ago (5.40 million in May 2018). The median existing-home price for all U.S. housing types in May was $277,700, up 4.8 percent from May 2018 ($265,100). May’s price increase marks the 87th straight month of year-over-year gains.
Properties across the nation remained on the market for an average of 26 days in May, up from 24 days in April and equal to the 26 days in May of 2018. Fifty-three percent of homes sold in May were on the market for less than a month.
Realtor.com®’s Market Hotness Index, measuring time-on-the-market data and listing views per property, revealed that the hottest metro areas in May were Rochester, N.Y., Fort Wayne, Ind,; Lafayette-West Lafayette, Ind.; Boston-Cambridge-Newton, Mass,; and Midland, Texas.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.07 percent in May, down from 4.14 percent in April. The average commitment rate across all of 2018 was 4.54 percent.
First-time buyers were responsible for 32 percent of homes sales in May, unchanged from 32 percent the month prior, and up from 31 percent recorded in May 2018. NAR’s 2018 Profile of Home Buyers and Sellers – released in late 2018 – revealed that the annual share of first-time buyers was 33 percent.
All-cash sales accounted for 19 percent of transactions in May, down from April a year ago (20 percent and 21 percent, respectively). Individual investors, who account for many cash sales, purchased 13 percent of homes in May, down from 16 percent in April, and from 14 percent a year ago.
Distressed sales – foreclosures or short sales – represented 2 percent of sales in May, down from 3 percent in April, and from 3 percent in May 2018. Less than 1 percent of May 2019 sales were short sales.
Source: Salt Lake Realtor Magazine®. June 2019.
BIG PRICE GAINS IN UTAH HOUSING MARKETS:
OGDEN, SALT LAKE CITY, & PROVO
The housing markets of Salt Lake City, Provo, Ogden and other Northern Utah cities outpaced the nation in 2018, in terms of home-price gains. They’re expected to do more of the same through 2019 and into 2020.
Last week, we reported that Provo, Utah is one of the cities where Millennials are buying homes in large numbers. This and other factors, has led to big home-price gains in the Provo housing market.
But Provo isn’t the only city in Northern Utah with a hot housing market. Most of the cities in that region are outpacing the nation right now, in terms of year-over-year home price growth.
Real estate markets in Salt Lake City, Ogden and Orem are also experiencing above-average price gains, as of early spring 2019.
Utah Home Prices Outpace the Nation
Home prices in Utah rose faster than the national average in 2018, and during the first part of 2019. According to Zillow®, the median home value for the state of Utah rose by 14% over the past year (as of March 2019). The nationwide median rose by 7.2% during that same 12-month period.
The company’s research team predicted that Utah’s median home value would rise by another 8.5% over the next 12 months, stretching into spring 2020.
Even bigger gains were recorded within the housing markets of Ogden, Orem, Provo and Salt Lake City. In those real estate markets, home prices rose rapidly over the past year or so.
Looking forward, the latest housing forecasts suggest that these cities will continue to outpace the nation in 2020 — at least in terms of annual home-price gains.
Strong Housing Forecasts for Salt Lake City, Ogden, Provo
According to the latest data, home prices in the major cities of Northern Utah have been rising at a much faster pace, than the nation as a whole. Additionally, there have been strong home-price forecasts for the housing markets in Salt Lake City, Provo, Ogden and Orem.
We can see this stark difference by looking at median home values over the past year. Consider the difference:
• The median home price for the U.S. rose by around 7% over the past 12 months.
• In contrast, the median home value (in all four Utah cities listed above), rose by at least 15% over the past year, according to Zillow.
Ogden, Utah led the charge with a whopping 20% gain in median house prices over the past year. While real estate appreciation seems to be slowing in that market, Ogden could have another year of double-digit price growth in 2019.
Here is Zillow’s forecast for the Ogden housing market: “Ogden home values have gone up 20.0% over the past year and Zillow predicts they will rise 12.5% within the next year.” They also labeled this real estate market as being “hot” in spring 2019, based on the average time on market, frequency of price cuts, and other factors.
The Northern Utah cities of Salt Lake City, Orem, Provo and Logan also recorded double-digit increases in their median home values over the past year.
Supply Falling Short of Demand in Some Areas
In most major cities across Utah, the inventory of homes for sale is still not enough to satisfy the demand from buyers. This puts upward pressure on home prices and leads to competitive conditions within these real estate markets.
Ogden, Utah is one of the more “extreme” examples of this supply-and-demand imbalance. As of February 2019, the Ogden housing market had about a 2.5-month supply of homes for sale. That’s well below the 5 to 6-month level that economists consider to be a balanced market.
Salt Lake City also had about a 2.5-month supply of homes for sale in February.
In these and other cities across Northern Utah, the real estate market tends to favor sellers over buyers – for now, at least. If more inventory becomes available over the coming months, it could tilt the scales.
Are Buyers Getting Priced Out of These Markets?
From a homeowner’s perspective, rising home values are a big win. An appreciating real estate market enables homeowners to build equity. But some home buyers will eventually be “priced out” of these real estate markets due to the above-average price gains of recent years.
Prospective first-time buyers, in particular, often struggle to keep up with rising home values. And with most housing market forecasts suggesting a continued rise in Utah house prices, the problem could worsen in 2020.
Already, we’ve seen a decline in sales across this region. That could be partly due to the big jump in prices (and a corresponding drop in demand).
A January 2019 article from The Salt Lake Tribune stated:
“Surging prices and limited supply pushed home sales on the Wasatch Front [which includes Ogden, Provo and Salt Lake City] to their lowest level in three years, with Utah’s urban counties seeing significant market slowdowns as 2018 ended.”
But there’s some good news for home buyers. Mortgage rates have plummeted over the past few months.
According to the weekly survey conducted by Freddie Mac, the average rate for a 30-year fixed mortgage loan dropped from 4.94% in mid-November of last year, to 4.06% during the week ending March 28, 2019.
Low mortgage rates could help offset the rising cost of homes in places like Salt Lake City, Ogden and Provo — at least for those home buyers who jump on them while they last.
Source: HomeBuyingInstitute.com. “Big Price Gains in Utah Housing Markets: Ogden, Salt Lake City & Provo.” Written by Brandon Cornett. April 1, 2019.
EXISTING HOME SALES REBOUND IN FEBRUARY
In February, existing home sales experienced their largest monthly gain in four years, according to the latest report from the National Association of Realtors.
Total existing home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, spiked 11.8% from January to a seasonally adjusted rate of 5.51 million in February, the highest monthly increase since December 2015. However, the report reveals sales are 1.8% below February 2018’s rate.
NAR Chief Economist Lawrence Yun said a powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound.
The median existing home price for all housing types increased to $249,500 rising 3.6% from last February’s rate of $240,800. This marks the 84th straight month of year-over-year gains.
Total housing available for sale increased from January, moving forward from 1.59 million existing homes on the market to 1.63 million in February. Notably, this is a 3.2% increase from last year’s total of 1.58 million.
“The housing market is poised for a rebound as existing-home sales soared in February after hitting an over three-year low last month,” Trulia Chief Economist Cheryl Young said. “With spring home buying season around the bend, sliding mortgage rates and moderating home prices will continue to boost demand and drive sales.”
Copyright, National Association of Realtors®. March 2019.
SALT LAKE COUNTY HOME SALES FALL FOR FOURTH CONSECUTIVE MONTH
Salt Lake area homes sales (all housing types), fell in January to 898 units sold, a 17 percent drop compared to 1,077 units sold in January 2018. It was Salt Lake County’s fourth consecutive month of falling home sales year-over-year.
In Davis County, there were 269 units sold in January, a 10 percent decline compared to the same month a year ago. It was the second consecutive month of falling sales for Davis County.
Meanwhile, the median price of homes sold in January continued to increase. In Salt Lake County, the median price in January increased to $320,375, an 8 percent rise compared to a median price of $296,500 in January 2018. In Davis County, the median home price hit $315,000, a 15 percent increase compared to median price of $275,000 a year earlier. Nationally, home sales (all housing types), were down 9 percent in January compared to January 2018, according to the National Association of Realtors®.
Lawrence Yun, NAR’s chief economist, sad January home sales of 4.94 millions were the lowest since November 2015. However, Yun does not expect the numbers to decline further going forward. “Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low. Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”
The U.S. median existing-home price for all housing types in January was $247,500, up 3 percent from January 2018 ($240,800). January’s price increase marks the 83rd straight month of year-over-year gains.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.46 percent in January from 4.64 percent in December. The average commitment rate for all of 2018 was 4.54 percent.
Nationally, all-cash sales accounted for 23 percent of transactions in January, up from December and a year ago (22 percent in both cases). Individual investors, who account for many cash sales, purchased 16 percent of homes in January, up from 15 percent in December, but down from a year ago (17 percent).
Copyright, Salt Lake Board of Realtors®. February 2019.
THE REAL ESTATE MARKET IN YOUR ZIP CODE
Surging prices and limited supply pushed home sales on the Wasatch Front to their lowest level in three years, with Utah’s urban counties seeing significant market slowdowns as 2018 ended. Full pricing and sales data by ZIP code illuminate what is now an extended trend.
As prices and mortgage interest rates continued to rise, 6,781 single-family homes changed hands over the five-county area in the past three months, nearly 9 percent fewer than sold in fall 2017, according to new figures published Monday by the Salt Lake Board of Realtors.
All five Wasatch Front counties saw home sales decline for the fourth quarter of 2018, according to the latest data, ranging from 4 percent down in Weber County and 5 percent in Davis, to an 11 percent drop in rapidly growing Utah County and a sizable 14 percent decline in Tooele County. Sales for October, November and December fell 10 percent in Salt Lake County.
Prices, meanwhile, leapt over the same period. In Salt Lake County, the median home price stood at $350,000 at year’s end, fully $25,000 higher than it was in those same three months a year prior. Across the wider Wasatch Front, the median home price was at $334,000, 11 percent higher year over year.
Several experts said Monday the sustained trend of rising prices had combined with hikes in mortgage rates to force some first-time buyers out of the market. For the population center of Salt Lake County, the 2018 sales decline came after total homes sales for 2017 dipped about 1 percent below their levels for 2016, the county’s third highest year for sales on record.
“While new listings are on the rise, overall inventory levels are not keeping up with homebuyer demand,” Scott Robbins, president of the Salt Lake Board of Realtors and a Draper-based agent with Sotheby’s International Realty, said in a statement.
The new data also come as issues in Utah with housing affordability are claiming the attention of city officials, business leaders and state lawmakers. According to the board’s latest report, six ZIP codes along the Wasatch Front now have median home prices above $500,000:
• 84004; Alpine ($577,500)
• 84103; (spanning the Avenues), Salt Lake City ($562,580)
• 84020; Draper ($530,000)
• 84310; Eden ($529,200)
• 84108; East Bench ($521,125)
• 84117; Holladay ($519,500)
• 84664; Mapleton ($491,406)
• 84095; South Jordan ($488,800)
•84093; Sandy ($480,000)
•84317; Huntsville ($480,000)
Experts say that even though new homes are coming on line along the Wasatch Front, a combination of rising costs for undeveloped land, building materials, construction labor and other items continues to push up median housing prices.
And in further evidence of market tightening, the quarterly data released Monday also show a typical Wasatch Front home listed for sale was on the market for only 40 days before it sold, three days shorter than for the fourth quarter of 2017.
A representative for one of the region’s major lenders predicted that additional interest rate hikes by the Federal Reserve in 2019 could further depress buyers’ purchasing power and leave more Utahns struggling to afford a new mortgage, even as job and wage growth in Utah continue to drive home demand.
“Affordability has become an issue,” said Roger Jones, senior vice president and mortgage division manager for Zions Bank, who added that would-be first-time buyers and existing homeowners seeking to move up in the market were both being sidelined.
Jones predicted that some buyers would be drawn to mortgages with adjustable interest rates that locked in lower rates in the first years, as a hedge against the possibility of rate upticks through 2019 and beyond.
Many ZIP codes with the highest volume of fourth-quarter 2018 home sales nonetheless saw year-over-year declines. Data show sales were strongest in Clearfield, Farr West, Lehi, Herriman, Layton, Eagle Mountain, Kearns and Roy.
Of 36 ZIP codes within Salt Lake County, only nine saw home sales at the end of 2018 that exceeded sales for the same period a year before — all are areas on the Salt Lake Valley’s western and southern suburbs.
And of 21 ZIP codes in Utah County, only six had higher fourth-quarter sales in 2018 than the year before, centered on Lehi, Provo, Alpine and Mapleton.
The fourth-quarter picture for condominium sales, often an indicator of buyers seeking bargains, was mixed.
Prices for condos rose dramatically in all five Wasatch Front counties, ranging from 8.1 percent in Davis County to 17.8 percent in Weber County. But sales were flat or declined slightly in Weber, Utah and Salt Lake counties, leapt by a dramatic 36.8 percent in Tooele County and plunged by 23 percent in Davis County.
©Salt Lake Tribune. Story by Tony Semerad. January 29, 2019.
COUNTIES SEE RISE IN HOME SALES
Salt Lake home sales in July increased 2 percent year-over-year, reversing two consecutive months of declines, according to the Salt Lake Board of Realtors®. There were 1,651 units sold (all housing types) in Salt Lake County in July. Nearly, three of four units sold (74 percent) were for single-family homes. Davis County saw its sales rise 3 percent in July.
The median price continued to skyrocket. In Salt Lake County, the median price of a home sold in July climbed to $329,900, up 12 percent compared to the median price in July 2017. In Davis County, the median price increased to $310,000, up 11 percent year-over-year.
Nationally, existing-home sales subsided for the fourth straight month in July, to their slowest pace in over two years, according to the National Association of Realtors®. The West was the only major region with an increase in sales last month.
“Too many would-be buyers are either being priced out, or are deciding to postpone their search until more homes in their price range come onto the market,” said Lawrence Yun, NAR chief economist. “Listings continue to go under contract in under a month, which highlights the feedback from Realtors® that buyers are swiftly snatching up moderately-priced properties. Existing supply is still not at a healthy level, and new home construction is not keeping up to meet demand.”
First-time buyers were 32 percent of sales in July, which is up from 31 percent last month but down from 33 percent a year ago. NAR’s 2017 Profile of Home Buyers and Sellers – released in late 2017 – revealed that the annual share of first-time buyers was 34 percent.
“Despite first-time buyers struggling to achieve homeownership, Realtors® in most areas say demand is still the strongest at the entry-level segment of the market, said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “For prospective first-timers looking to begin their home search this fall, it is expected that competition will remain swift. That is why it’s important to be fully prepared with a pre-approval from a lender, and to begin conversations with a Realtor® early about what you’re looking for and where.”
All-cash sales were 20 percent of transactions in July, down from 22 percent in June, but up from 19 percent a year ago. Individual investors (who account for many cash sales), purchased 13 percent of homes in July (unchanged from last month and a year ago). Distressed sales – foreclosures and short sales – were 3 percent of sales in July (lowest since NAR began tracking in October 2008), unchanged from last month and down from 5 percent a year ago. Two percent of July sales were foreclosures and 1 percent were short sales.
Copyright, Salt Lake Board of Realtors®. September 2018.
SALT LAKE MEDIAN HOME PRICE CLIMBS TO $352,500
Salt Lake County home prices continued to climb in the second quarter of 2018, according to the Salt Lake Board of Realtors®. The median single-family home price in the April-through-June period, increased to $352,500, up 7.8%…compared to a median price of $327,000 in last year’s second quarter. Home prices increased across all Wasatch Front counties including: Davis, up 9.8%; Tooele, up 20.9%; Utah, up 10.1%; and Weber, up 9.6%. The median sales price of Salt Lake County condominiums, also increased in the second quarter to $237,300, up 5.5%, compared to a median price of $225,000 a year earlier.
Copyright, Salt Lake Board of Realtors®. June 2018.
HOME SALES FALL IN MAY
Copyright Salt Lake Board of Realtors® July 2018.
UTAH IN TOP 10 FOR INCREASED HOUSE PRICES
Utah ranks in the Top 10 states when it comes to the highest percent change in house appreciation, according to the House Price Index by the Federal Housing Finance Agency. The report noted that Utah home prices have appreciated 46.03 percent in the past five years. Nevada posted the highest appreciation at 81.84 percent. Connecticut was the lowest at 7.91 percent. The U.S. five-year average was 34.71 percent. Salt Lake City ranked No. 22 of 383 U.S. metropolitan areas in highest appreciation. Over the past five years home prices in the Salt Lake City area have increased 47.24 percent. The HPI is a broad measure of the movement of single-family house prices. It serves as a timely, accurate indicator of house price trends at various geographic levels.
Copyright Salt Lake Board of Realtors® May 2018.
SALT LAKE COUNTY’S MEDIAN HOME PRICE IN 2017 CLIMBS TO $325,000
The median price of a single-family home sold in Salt Lake County in 2017 climbed to $325,000, up 10 percent compared too $295,000 in 2016. The cumulative median days a single-family home was on the market in 2017 was 15. Nearly three-of-four (71 percent) single-family homes sold in 2017 were priced under $400,000. Twenty-one percent of single-family homes sold in 2017 were priced between $400,000 to $599,999. Just 8 percent of all sales were for homes sold at $600,000 or more.
Copyright Salt Lake Board of Realtors® February 2018.