Utah Home Sales Plunge in 4Q 2007

February 14, 2008 - Utah’s residential real estate market, which once bucked the national downturn and all the negative press that went along with it, is now right smack in the middle of it.

In a report released Thursday by the National Association of Realtors, Utah had the sixth-highest decline in existing home sales - 33.8 percent - of all states in the fourth quarter.

The report compared the home sales volume nationwide in the last quarter of 2007 with the same period in 2006. In the report, sales of existing homes fell in 45 states, with a national average drop of 20.9 percent.

Many surrounding states began their downturn a year or more earlier than Utah, where home sales began to slow in earnest this past summer. Many areas also have seen declining home prices as well.

In the report, Lawrence Yun, National Association of Realtors chief economist, blames the nation’s lending crisis in great part for the decline in sales.

“The continuing crunch in the jumbo loan market that began in August has disproportionately reduced the number of transactions in higher price ranges,” he said in the report. “For buyers who need loans of more than $417,000, mortgage interest rates have been running more than a percentage point higher, and that has been having an obvious impact.”

The report does not list median selling prices by state, only by 150 different metro areas. In the Salt Lake area, despite the large drop in home sales, prices in the fourth quarter were up 2.5 percent to $229,000 compared with the same period in 2006, according to the report.

Salt Lake was among 73 metro areas that had increases in median selling prices over the one-year period. Nationwide, though, prices fell a record 5.8 percent in the fourth quarter.

In Utah, given the drop in home sales, many real estate agents say some type of decline in home prices will follow.

Jillinda Bowers, president of the Salt Lake Board of Realtors said she’s not surprised at the report. Home sales are down, and sellers are making price concessions.

Still, Bowers said she wouldn’t be surprised if the market showed some strength this spring. “I’ve seen buyers out, showing more interest,” she said.

Bowers maintains the combination of low mortgage rates and eager sellers make it a great time to buy a home.

Forbes magazine editors agree. The magazine this week delivered an upbeat snapshot of Utah’s real estate market, naming it as one of the “best cities for bargain house-hunters,” citing the combination of the area’s depressed real estate market and strong economy.

The idea, according to Forbes, is that buyers can get a good deal in Salt Lake City because sellers are motivated to make concessions but buyers don’t face the risks of buying in a city that is struggling economically. Utah - and Salt Lake City’s - strong job growth ensures that there is no shortage of people moving into the area, the magazine said.

Home sales in the fourth quarter of last year were down in 45 states compared with 2006.

			% Decrease
    1. Nevada		44.2%
    2. Wyoming		42.4%
    3. New Mexico	38.7%
    4. Oregon		38.4%
    5. Arizona		37.5%
    6. Utah		33.8%
    7. Maryland		33.5%
    8. California	29.8%
    9. Florida		29.0%
   10. Georgia		23.8%

    U.S. Average	20.9%

Source: National Association of Realtors

Utah home sales plunge
By Lesley Mitchell | The Salt Lake Tribune