Even as home prices, sales rise, Wasatch Front listings at 15-year low

The number of homes along the Wasatch Front listed for sale was at a 15-year low at the end of 2012, even as prices rose steadily through most of the year and sales gained ground.

The scarcity of homes on the market underlines the severity of the housing market’s collapse in Weber, Davis, Salt Lake and Utah counties, as well as many Utahns’ uncertainty about the pace of the recovery, real estate experts say.

Listings peaked in the fourth quarter of 2007 at 14,683 homes, according to the Salt Lake Board of Realtors, which cited figures compiled by the Wasatch Front Regional Multiple Listing Service. By the end of last year, that number, which includes foreclosures and short sales, had been cut to 7,229 — the lowest count since the fourth quarter of 1997, when 5,767 homes were on the market.

Myriad reasons are offered why sellers are holding back, even as demand for homes rises. Some say the 6 percent gain in the median price of a single-family home in Salt Lake County last year wasn’t enough to offset the sharpest decline in values since World War II.

"Prices dropped by 25 percent in Salt Lake County. So a [6 percent increase] is good news. But it’s not enough to motivate me to put my house on the market right now," said Jim Wood, director of the University of Utah’s Bureau of Economic and Business Research.


The economist owns a pair of homes and wants to sell one. Because he expects prices to rise 10 percent to 12 percent this year, he will wait awhile before listing it with an agent.

Like other experts, Wood believes the number of listings probably won’t fall further in 2013. Still, many potential sellers are more likely than not to stay on the sidelines until values rise further, he said.

Home sales in Salt Lake County jumped 15 percent last year, to 10,870 units from 9,452 in 2011. The gain was on top of a double-digit rise over 2010. Dave Frederickson, president of the Board of of Realtors, said worries that record low interest rates might rise soon is driving many buyers to snap up properties on the market — so much so that bidding wars have erupted over well-priced homes. And that’s pulled the inventory well under numbers that were typical before the housing bubble formed, he said.

"Interest rates have almost caused a feeding frenzy. It’s not allowing us to build back up supply. I don’t know if a lot of potential sellers out there even know [the housing market] has come back," Frederickson said. "The buyers are catching on to that quicker than the sellers are." Salt Lake Tribune

Housing Report Shows Nation Still Down Over 2008

The housing markets in Utah's most populous counties have endured four challenging years, according to a new report.

Based on five key metrics related to the nation's housing market — average home price, unemployment rate, foreclosure inventory, foreclosure starts and share of distressed sales — the U.S. housing market comes out worse off than it was four years ago, with a several Utah counties hit especially hard.

The 2012 Election Housing Report showed that the average price of a residential property nationwide has decreased 20 percent during the past four years — leaving more than 12 million homeowners owing more than their property is worth, according to RealtyTrac, a market research firm based in Irvine, Calif.

What that numbers don't reflect is the upward trend during the past year in the housing market and the peak periods of foreclosure which kept numbers low during the past few years.

All six Beehive State counties in the report saw unemployment rates nearly double or exceed that amount, from at least 3 percent in 2008 to 6 percent or greater in 2012, while four counties saw the volume of foreclosure starts jump more than double during the period.

But the Utah unemployment rate continues to be better than the national average and the growth in exports also points to an economy on the rebound.

Despite the report's poor numbers, the state's housing market has steadily improved during the past year, and Utah has one of the lowest overall unemployment rates in the country — more than 25 percent below the national rate of 7.8 percent.

Daren Blomquist, vice president of marketing for RealtyTrac, said the foreclosure market is improving nationwide, which bodes well for Utah and most other states.

However, the positives of lower foreclosure inventory and fewer foreclosure starts are outweighed by the negatives of lower home prices, higher unemployment and a higher share of distressed sales, the report stated.

Nationwide, in the 919 counties with data available for all five metrics, 580 (65 percent) showed at least three out of the five key metrics worse off than four years ago, while in 315 counties (35 percent) at least three of the five key metrics were better off than four years ago. Deseret News

Sandy real estate firm adds 90 more agents

Coldwell Banker Residential Mortgage has hired more than 90 real estate agents this year, a sign that the housing market along the Wasatch Front is healing.

The hiring surge puts the Sandy-based company’s 11 offices in a better position to meet increasing demand for brokerage services from home buyers and sellers, Coldwell Banker said Thursday. Unit sales brokered by the agency were up 12 percent through July compared to the same time last year.

In all, the offices have added 96 agents, bringing the company’s staff to more than 700 people. Many of the hires were experienced agents who moved from rival real estate firms. Others returned to the industry after sitting out the housing downturn, Coldwell Banker President Chris Jensen said.

Real estate agents typically are independent contractors who work on commission. After the housing market imploded in late 2006, hundreds of agents left the business. With home sales rising again, agents are starting to come back to work, Jensen said. Salt Lake Tribune

Affordability the byword for this year’s Salt Lake Parade of Homes

This year’s Salt Lake Parade of Homes is a long-awaited celebration of the return of the homebuyer.

Five years after the housing market along the Wasatch Front went bust, sales of new homes are slowly on the rebound.

"With lower prices and 3½ to 4 percent mortgage rates, people are seeing that they can get more home than they could before," said Paul Peterson, executive officer with the Salt Lake Home Builders Association. "It’s brought affordability back."

In 2007, at the height of the market, builders took out permits for the construction of more than 7,200 homes along the Wasatch Front from January through July. By 2008, building activity plummeted to about 2,600 permits in that same period.

This year, builders took out 3,788 permits in that time frame — a five year high that’s up 28 percent from during the same period last year. Salt Lake Tribune

Foreclosure rates drop in Utah's large metros

The number of properties falling into foreclosure is dropping dramatically, a new report indicates.

The RealtyTrac Q1 2012 Metropolitan Foreclosure Market Report showed the rate of first quarter foreclosure activity in the state's most populous metropolitan statistical areas declined at least 22 percent from the last quarter of 2011, and at least 42 percent from the same period last year.

The Salt Lake City metro area reported a rate of foreclosure filings — default notices, scheduled auctions and bank repossessions — of 1 in every 163 households, putting the state capital at No. 47 nationally. The rate decreased 22 percent from fourth quarter 2011, and nearly 49 percent from first quarter 2011.

The Provo-Orem area ranked No. 52, with 1 in every 174 households reporting a filing — down more than 25 percent from last quarter and 42 percent year over year.

The Clearfield-Ogden area, which ranks No. 117, reported a filing in one of every 330 households — down more than 26 percent from the previous three-month period and a decrease of almost 56 percent year over year.

The nationwide average was 1 in every 230 households — a decline of 2.25 percent from fourth quarter 2011 and down just under 16 percent from the same period last year. Deseret News

Community-building group selected to buy Old Town houses

A group adhering to a community-building idea new to Park City has won the right to negotiate a deal with City Hall to purchase two rundown houses in Old Town to anchor the first so-called cohousing development in the city. The Park City Council on Thursday night unanimously agreed to have staffers enter into another round of talks with a firm known as GreenPark Cohousing in anticipation of a sale of the houses, which are located at 1450 Park Ave. and 1460 Park Ave.

The GreenPark Cohousing proposal calls for 10 residential units and the preservation of the two houses already at the site. The two houses would be made into common space, according to a description of the project released by City Hall. The group would repair the houses, remove newer elements and redo them so they look as they once did.

The proposal, meanwhile, calls for six residential units at the site selling for up to $195,000 and one priced at between $196,000 and $270,000. The other three would be sold on the open market. City Hall wanted a project at the site to offer housing at a range of prices. People who move into a cohousing development play an important role in the designs, one of the unique aspects of that sort of project. A City Hall report issued in anticipation of Thursday's meeting indicated that GreenPark Cohousing has found buyers for seven of units.
Darrell Finlayson, the vice president of GreenPark Cohousing, said in an interview after the City Council vote the location works well for a project like the one his group plans to build. He said there are not many full-time Parkites living along the stretch of Park Avenue where the houses are situated. The project, he said, would attract people to that section of the street.

The "cohousing concept is founded on creating community first," said Finlayson, who wants to buy one of the units once they are built. He said his side hopes it is able to finalize the purchase within three or four months. Finlayson did not have a timeline for a groundbreaking, though. Park Record

Affordable housing reexamined in Summit County

According to Mountainlands Community Housing Trust Director Scott Loomis, a committee has been formed by the Summit County Council that includes residents and Summit County planning staff that is charged with creating a new needs assessment survey to identify specific housing needs in the area. Based on the previous survey, the County Council began requiring all new developments to provide workforce housing. But Loomis said that the old survey may have misidentified what kind of affordable housing was needed.

According to Loomis, there are currently 575 affordable housing units that have been approved and an additional 152 affordable housing units that are in the process of being built as part of the Boyer Research Park at Kimball Junction. ParkRecord

Mormon 4th Ward building in Provo to become upscale apartments

An old LDS Church building will be converted into upscale apartments in downtown Provo. Plans call for 15 apartments to range in size from 500 to 1,100 square feet, and to feature loft bedrooms, high ceilings and laundry facilities. Deseret News

Utah home sales up in October

Utah home sales rose for the fifth straight month in October — up nearly 25 percent from last year, according to a new report from the Utah Association of Realtors. During the month, Utah Realtors sold 2,819 homes, townhomes and condos compared to 2,261 sales last year. It was the fourth consecutive month of double-digit sales increase. Since the beginning of the year, Utah home sales are up over 7 percent compared to the same 10-month period in 2010.

The month's inventory in Uintah County is 4.6 months and prices are up nearly 14 percent, a release states. Similarly, in Washington County, the month's supply is 6.5 months and the median price has increased about 11 percent from last October. Statewide, the number of homes on the market has come down more than 21 percent over the past year — the fewest amount of homes on the market since mid-2007 and the eighth consecutive month of double-digit declines. In October, the median price of homes sold in Utah was $174,750, down 3.6 percent compared to the same period last year.

In addition to Uintah and Washington counties, several other areas saw increasing prices, including Emery, Grand, Juab, Morgan and San Juan counties. The median price in Weber County stayed nearly the same, coming in at $139,500 compared to $137,990 last October. Deseret News

Increase in share of homes being rented in 10 Utah cities

Ten Utah communities showed an increase in the share of homes being rented rather than owned, part of a national trend identified through a new USA Today analysis of census data.The national newspaper's analysis published Tuesday found more than 500 midsize and large cities throughout the county saw a boost in home rentals between the 2000 and 2010 census counts.

The percentage of occupied homes that are rented went from just under 34 percent in 2000 to nearly 35 percent in 2010, the newspaper found, with Florida, California and Arizona having the most cities where the share of rented homes grew by at least 5 percentage points.

In Utah, South Jordan saw the biggest boost in homes rented, from just over 10 percent in 2000 to more than 15 percent in 2010, USA Today reported, with West Jordan, Orem and Sandy all increasing more than 4 percent. Deseret News


Note: This analysis should come as no surprise. In 2000, the country was NOT in the midst of a collapsing housing bubble. In 2010, it was. Foreclosure, credit, and unemployment problems all contribute to the likelihood that people will rent rather than own. The current situation should certainly not be seen as a long term trend--at least until more data is available. Fortunately, the American Community Survey provides yearly housing updates, so tracking the trends will be easy.

Has Utah's housing bubble deflated yet?

Housing bubbles aren't like most price bubbles. Typically, speculation drives up prices (of stocks, crude oil, and back in the 17th century even tulips) like an expanding bubble. Eventually, it becomes obvious that item is extremely over-valued and prices "pop" and collapse. Yes, that's why we call them bubbles.

Remember a couple of years ago when gasoline prices went through the roof? You can blame a bubble market in crude oil. (Some SEC reports indicated that 80 percent of crude oil trading during the height of that price expansion was speculative.) In just seven months, the producer price index (seasonally adjusted) for crude oil went from 339.9 to 108.8. That change represents a decrease of almost 70 percent! Talk about a popping bubble. (And, you might want to note the similarity to the current price increases in oil/gasoline.)

On the other hand, housing bubbles tend to slowly deflate rather than pop. Why? Think about it. If you bought a home at the height of the bubble for $400,000 do you really want to sell it for $250,000? No. Most private individuals aren't able to afford that kind of loss. For many American families, a home is their largest asset. So, if you must sell, you will keep trying to sell at a higher price until the market makes it clear that just isn't going to happen. In other words, home prices are sticky downward, so it will take longer for home prices to deflate after the speculation ends.

It also becomes readily apparent why there is such a foreclosure mess in this country. Obviously, many home-buyers took out loans they couldn't afford in the long run. Then, the recession exacerbated other home-buyers' ability to pay. In addition, even if home-buyers can afford to make their payments, aren't the incentives skewed towards walking away rather than paying off the $400,000 mortgage on a home that is now worth only $250,000?

Well, this housing bubble has certainly taken its time collapsing. However, the market is working her magic and there does seem to be light at the end of the tunnel--at least according to the Federal Housing Finance Agency's Housing Price Index (HPI). (For more information on the HPI see this previous post or the Agency's website.)

(Click on image to enlarge.)

The chart that accompanies this posting certainly provides a lovely portrait of a housing market bubble for Utah's Metropolitan Statistical Areas (MSAs)--particularly for my own Washington County. You can watch home prices explode and then collapse (the chart shows the percent change compared with the same quarter a year ago--which eliminates seasonality).

The Logan, UT MSA (Cache County) seemed to participate the least in the run up of home prices and also appears closest to the end of the price declines. As of fourth quarter 2010 (the most recent index available):

• Logan home prices are down only 1.0 percent compared with prices in fourth quarter 2009.
• Ogden-Clearfield MSA home prices are down 1.8 percent.
• Salt Lake City MSA prices are down 2.0 percent.
• Provo-Orem MSA prices are down 2.4 percent.
• St. George MSA prices still show the largest price declines--4.8 percent.

However, for all MSA the price declines are getting smaller and smaller. The market is making her adjustments. In fact, given current trends, most if not all of Utah's MSAs are poised to see the end of home price declines in 2011.

Taylorsville/Kearns top area for Wasatch Front home sales

A new report showed more people purchased homes in the Taylorsville/Kearns area during the fourth quarter of 2010 than any other city along the Wasatch Front.

Data from the Salt Lake Board of Realtors indicated that there were 151 existing single-family homes sold in ZIP code 84118. More affordable home prices were a driving factor the report stated, with the median price of a home in Taylorsville/Kearns at $138,000 compared to the Wasatch Front’s median home price of $199,900.

Of the top 10 areas for home sales, only one had a median price above $300,000 — ZIP code 84020 in Draper at $349,900, which ranked sixth in sales for the period. Deseret News

New project provides affordable housing in American Fork

There's a new place for senior citizens in American Fork. Called Rosewood Place, it has 12 units of affordable senior housing. It was built under the auspices of the Housing Authority of Utah County and provides rent subsidies for low-income residents.

The first of its kind in American Fork, it will have residents move in about Valentine's Day. At press time, 11 of the 12 units were under contract. Each of the one-bedroom apartments includes a stove, refrigerator, microwave, garbage disposal, washer and dryer. Covered parking and outside storage are available. All utilities are included in the rent, which is calculated as one-third of the resident's income. The balance of the rent is subsidized through the Housing Authority of Utah County. One or two senior citizens may live in each unit. Daily Herald

End of year report: prices down, sales up

Quarterly reports from the Park City Board of Realtors tend to emphasize the positive, and the 2010 End-of-Year Report released last week is no different even though people wishing for a quick market recovery will find it sobering.

That's because, said past-president Mark Seltenrich and new president Patrick Giblin, no matter how bad it is, Park City is faring better than the Utah average, which is faring better than the national average.

The bad news

"The outlook for 2011 is more of the same as what was seen in 2010," Seltenrich wrote in the report summary. "The market will continue to be very price sensitive it will continue to be a buyer's market ."

Median prices for all property types are down three percent from one year ago; mean average sale prices are down over seven percent, the summary said. Median prices for vacant land fell 50 to 60 percent in some areas, and 43 percent overall.

Sales of foreclosures account for more than one-third of all sales.

"Foreclosures will remain a major factor in the Park City market in 2011," the summary said.

In an interview Monday, Seltenrich said the mean average is down so low because high-end homes either aren't selling, or are selling for less.

Good in comparison

According to the summary, total dollar volume in sales surpassed $1 billion because a large number of units sold for reasonable prices. That has only occurred six other times in history and is a 16-percent improvement over last year. Unit sales were up 20 percent over 2009.

Vacant-land sales were up 60 percent. Condo sales were up 22 percent. Single-family home sales were up over 26 percent and comprised 46 percent of all sales and 54 percent of total dollar volume, the summary said.

Property values in many neighborhoods appear to have bottomed out and are improving. Foreclosures and short sales continue to depress values, but the fact that they only comprise one-third of the market means sellers have adjusted to the new reality an important step to clear out inventory and to allow appreciation to begin again.

What happened in the Park City real estate market in 2010 is simplified this way: prices came down and people are buying.

Park Record

Massive Vineyard development waiting for approval

The largest single development project in Utah County history is primed to finally get started, if the Alpine School District's concerns are resolved. The final touches could be put on a tax break deal in January that would launch the effort to take the old Geneva Steel property and make it a hub for residential, commercial and transportation use. The town of Vineyard as well as landowner Anderson-Geneva and other stakeholders are close to settling on terms that will give up to $300 million in tax breaks over 40 years to develop the 1,000-plus acres on the shore of Utah Lake. The plan could add as many as 26,000 new residents to the existing 100-plus people who live there now.

But first, the Alpine School District has some concerns to be dealt with. The district is part of the Taxing Entity Committee that has to approve the tax breaks before they can take effect.

If they gain approval, the company expects to start installing infrastructure like main roads and sewer lines within six months. Provo Daily Herald

Home prices hold steady, but sales drop along Wasatch Front

The Salt Lake Board of Realtors reported that existing home sales in Salt Lake County in September 2010 were down 27 percent compared to the same month last year. For the quarter, sales volume decreased nearly 21 percent from third quarter 2009. Similar scenarios played out in other areas as well with Utah County home sales falling just over 23 percent year-over-year, while Davis County sales fell almost 26 percent and Weber County home sales declining more than 30 percent. According to the report, median home sales prices were virtually unchanged in Salt Lake and Davis Counties, while Weber County prices decreased slightly at 3.73 percent and Utah County prices dropped nearly 8 percent for the year-over-year period. Deseret News

Utah remains among highest in foreclosures

RealtyTrac — an Irvine, Calif.-based market research firm — released its Q3 2010 Metropolitan Foreclosure Market Report, which ranked Provo-Orem at No. 30, Salt Lake City at No. 31 and Ogden-Clearfield at No. 58 all in the top foreclosure rates for the third quarter among metropolitan areas with a population of at least 200,000 people. Both Provo-Orem and Salt Lake City recorded one foreclosure filing for every 77 housing units, while Ogden-Clearfield had one filing for every 126 households, the report stated. Deseret News

Note: In general, Utah was late to the housing boom and late to its decline. The state's current high ranking in RealtyTrac's foreclosure filings may be the result of timing rather than relative distress.

Home prices still falling in Utah's metropolitan areas

According to information released by the Federal Housing Finance Agency, home prices have yet to bottom-out in Utah's various Metropolitan Statistical Areas. Compared to prices a year ago, St. George MSA prices are down almost 18 percent, prices in the Provo-Orem MSA are down 13 percent and the Salt Lake City MSA prices are down about 10 percent. Both the Ogden-Clearfield MSA (down 6 percent) and the Logan MSA (down 3.4 percent) show slower home price declines.