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With rising home prices and an increasing number of sales, Utah’s real estate housing market seems to be having a great summer. Statewide, home prices increased for the third month in a row, rising about 3 percent in June over the previous year, according to recent numbers from the Utah Association of Realtors.
In June, the median sales price was $182,000, up $5,000 from the median of $177,000 in June 2011. April and May of this year saw similar price gains, breaking a trend that had been in place since 2008.
“There’s a feel of optimism,” said Lori Chapman, president of the UAR. “Sellers are getting more activity. Sales are happening quicker and they’re getting closer to their asking price—and sellers aren’t making as many concessions as they have been.”
The number of sales rose about 1 percent in June. Sales have been steadily on the increase for more than a year, and in the first half of 2012, closed transactions were up more than 10 percent over the first half of 2011.
Salt Lake saw a sales increase of 12 percent, and Weber County experienced an 11 percent increase in sales. Box Elder reported a tremendous 44 percent increase.
In Washington County, the median home price rose 11 percent year over year. According to Chapman, the foreclosure market in Washington County has dried up and inventories are significantly reduced.
“In some areas, particularly in Washington County, the builders are back building. They’re pre-selling them and selling them out,” she said.
“Inventory available to sell across the state is down everywhere,” said Chapman. Statewide inventory fell nearly 24 percent over the previous year, and new listings were down about 10 percent in June.
According to Chapman, there is a six- or seven-month inventory of homes for sale, which is a healthy level for both sellers and buyers.
“I think there is some pent-up demand on both sides, but I don’t think there’s going to be a huge flood of sellers and buyers into the market,” she said. With a reduced number of foreclosures and short sales, “we’re starting to see the market stabilize at a more realistic price point.”
The lowest price categories saw the highest increase in home sales, at 29 percent year over year. The highest price category, $750,001 and above, experienced an increase of 4 percent.
Chapman attributes the dramatic increase in sales in the lowest price category to first-time homebuyers entering the market. With ultra-low interest rates and bargains still to be found, many first-time homebuyers are being enticed into the market.
Additionally, Chapman said builders have been building new homes in this lower price category. “New homes are coming in at a price that most people in that category can afford,” she said.
Chapman said buyers are finding they have to act fast on properties they are interested in. And with a tightening inventory, sellers are getting bids that are closer to their asking price. On average in June, they received about 95 percent of their asking price, compared to 91 percent a year ago.
And home sales are happening on about 10 days faster than a year ago—on average about 76 days for the contract to be signed.
Looking into the future, Chapman expects home prices to continue rising. Because of the volume of pending sales in June, home sales will likely be elevated for July.
“Utah is beating the trends,” she said. “Nationwide, they’re expecting prices to drop 1 percent.”