February 9, 2012

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Year-End Home Sales Highest in Three Years

Utah closed sales up 8.6 percent in 2011

Utah Realtors Association

February 9, 2012

Utah home sales in 2011 were the highest they’ve been since 2007, according to a new report from the Utah Association of Realtors. The report indicated that Utah Realtors sold nearly 33,000 homes last year, up from the final tallies in 2010, 2009 and 2008.

Compared to 2010, sales were up nearly 9 percent. They were 5 percent above 2009 levels, and about 6 percent higher than the year-end total for 2008.

“We’re seeing higher sales because of increased homebuyer confidence, affordable home prices, stronger employment and record-low interest rates,” said Lori Chapman, president of the Utah Association of Realtors.

Since July, monthly home sales have recorded double-digit gains compared to the same month from the prior year. Including the 9 percent increase from June, statewide sales have been up for seven straight months. In December, sales were up nearly 12 percent compared to December 2010.

For the year as a whole, sales gains were particularly strong in several counties. Among the more populated areas, sales increases were in the double digits in the following counties: Uintah (up 33 percent), Wasatch (up 21.4 percent), Washington (up 11.9 percent) and Utah (up 10.9 percent).

Among property types, single-family homes had the highest sales increases for 2011, up more than 10 percent compared to 1 percent for condos and townhomes.

Pending sales, which measure contracts that have been signed to buy properties, were up more than 11 percent in 2011 compared to 2010.

“Based on these figures and recent forecasts, we expect the trend of rising sales to continue into this year,” Chapman said. “In Salt Lake, homes sales are expected to rise 15 percent in 2012.”

As home sales rose during 2011, housing supply was absorbed. At the end of December, inventory levels were down nearly 24 percent. For the past 10 months, inventory declines have been in the double digits, with levels falling for more than a year. The number of homes on the market has not been this low since March 2007.

The 20,243 homes listed for sale at the end of December represented a 7.2-month supply of inventory. That’s down more than 31 percent from the 10.5-month level in 2010.

“The effect of the steep inventory drop was to bring supply and demand more in line,” Chapman explained. “Traditionally, a market is balanced between buyers and sellers when the inventory represents a supply of about six months.”

Supply was particularly tight in the low price ranges. For homes priced $150,000 and below, the supply of inventory was at 5.9 months. For those in the $150,001 to $200,000 category, supply was at 6.1 months. Supply was also tighter in the single-family segment at 6.9 months compared to 8.9 months for townhomes/condos.

For 2011, prices were down about 8 percent compared to 2010. The median sales price of homes sold was $174,900. The average sales price also declined about 8 percent for the year. The average sales price for all closed transactions was $224,526.

“While prices remained weak in 2011, the reduced supply and increased demand suggest that trend will not continue,” Chapman said. “A new report from Fiserv and Moody’s Analytics predicts Utah home prices will have increased by the end of summer, with the state having the seventh-highest appreciation in the country.”

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