Wednesday, July 29, 2009

Salt Lake Tribune: Decline in home prices, sales persists along Wasatch Front


Decline in home prices, sales persists along Wasatch Front
Housing » Dwellings at $250K and below begin to sell better; higher-priced properties still in limbo.
By Lesley Mitchell

The Salt Lake Tribune

Salt Lake Tribune
Updated:07/28/2009 08:04:34 PM MDT


Two years into the Wasatch Front's real estate downturn, the home-sale market is showing some signs of improvement.

In the market for homes listed at $250,000 and below, some sellers have been entertaining multiple offers. Some properties are selling within days or weeks. In June, sales in Salt Lake County were up 5 percent, compared with June 2008.

But on a year-over-year basis, things don't look as good. In Salt Lake County, 2,534 single-family homes changed hands in the second quarter, a 4.3 percent decline from the same period a year ago, a report released Tuesday shows. Median selling prices also are below last year's levels; they're off 5.3 percent, to $236,000. Prices are off 7.4 percent from a peak of nearly $255,000 in the second quarter 2007.

Year-over-year declines in home sales and values are signs of a market mired in downturn, for sure, but "the numbers are good, considering where we've been," said Ryan Kirkham, president of the Salt Lake Board of Realtors.

The mix of good and bad news begs the question: Has the real estate market in Utah's most populous county bottomed?

Most agree it all depends on price range.

Appraiser Rick Lifferth of Layton isn't convinced the residential real estate market has hit bottom. "But I do see some stability in the market of lower-priced homes, especially the $150,000 to $250,000 range. And they are selling in a shorter time frame. I see that as a very encouraging sign."

Complicating matters, though, are rising foreclosures in Utah, he said, which ultimately tend to put downward pressure on prices and prolong the downturn. "Foreclosures are a major concern," he said.

Realtor Rob Aubrey agrees. "For the most part, the $250,000-and-below price range has bottomed out."

In that price range, well-priced homes generally sell very quickly, and many sellers, unlike those in higher-priced homes, don't have to take huge markdowns to get their properties sold. And unlike higher price ranges, there are buyers with the means and financing to make a purchase.

Buyer Kelly Evans, who recently closed on a three-bedroom, one-bath bungalow near Liberty Park, began looking for a home priced at $200,000 or less in March. Since then, she said she has seen a number of homes in that price range sell within days of hitting the market.

"There are a lot of people ... looking for deals," Evan said. In fact, the home she ended up purchasing had two offers, including her own.

Evans' Realtor, Tony Fantis, said multiple-offer situations are becoming more common in lower price ranges. Combined with other encouraging trends, this leads him to believe that the home-sale market is poised for a recovery. For example, on a quarterly basis, sales in Salt Lake County increased a whopping 75 percent from the first quarter to the second, he noted.

Aubrey said the market is less active above the $250,000 range, depending on the area. Above $500,000? Still little action. And those homes priced at more than $1 million? In many cases, it takes price reductions of hundreds of thousands of dollars to get those homes to move.

"That [segment of the market] is a pure buyer's market," he said.

Much of the same dynamics are at work in surrounding counties. In the second quarter, sales in Davis County were off by 10.2 percent, with median prices declining by 4.1 percent from last year's levels. Utah County's sales are up nearly 15 percent, although prices continued to slide, falling by nearly 10 percent.

Among all the Wasatch Front counties, the median selling price increased in only seven Zip Code areas, the Salt Lake Board said. Only one of those Zip Codes is in Salt Lake County: West Valley's 84119, which increased 2.1 percent year-over-year.

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