Utah home sales rise for ninth consecutive month
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Utah home sales rose for the ninth consecutive month in February, according to a new report from the Utah Association of Realtors. Closed sales were up 17.5 percent compared to last year. Utah Realtors sold 2,342 homes, making this the strongest February since 2007.
Since the beginning of the year, Realtors have sold about 500 more homes than they did last year during January and February — an increase of 13 percent.
Contracts signed to buy properties also signaled a strong start to the spring buying season. Pending sales increased 34.1 percent, which should result in sales gains in March and April. With 3,257 contracts signed, this was the highest number of February pending sales in five years.
Meanwhile, the inventory of available homes dropped sharply. The number of homes on the market fell nearly 25 percent. With 19,891 homes available for sale at the end of February, that put inventory under the 20,000 mark for the first time in five years.
That amounted to seven month’s supply of inventory, down about 33 percent. Last year, it would have taken 10.4 months to sell all existing inventory. The last time homes were absorbed this fast was in June 2007.
In many local areas, housing supply is even tighter. In several counties, the inventory represents a supply of less than seven months: Piute (4.0), Uintah (4.4), Salt Lake (5.2), Davis (6.1), Washington (6.3) and Utah (6.7). For homes priced $200,000 and below, the month’s supply is in the five-month range, signaling greater competition for lower-priced homes.
With the excess supply being absorbed, sellers are using fewer discounts. In February, sellers received an average of 91 percent of original list price. That’s up 3 percent from 88 percent received last year.
As real estate conditions improved, homes spent less time on the market. In February, it took an average of 95 days to sell a home compared to 101 days last year.
The median sales price was $169,000 in February, down 3.4 percent from the same month a year prior. That represents the smallest decline in more than a year.
Although the median price declined over the past year, there are indications that the trend won’t last long. In fact, it already may be changing.
Based on the improving numbers, Realtor.com recently named Salt Lake City as the sixth best market in the country to invest in real estate. The organization built the top 10 list analyzing housing inventories, price trends and unemployment rates.
While Utah’s capital may be receiving national attention for its investment potential, housing is still affordable and in reach. In February, the UAR’s Housing Affordability Index registered 178. That’s the second-highest level in the history of the index, only behind January’s 180 reading.
Taking into account prevailing interest rates, the index shows that a Utah family making the median income had 178 percent of what is needed to qualify for the median-priced home. According to the index, affordability is 18 percent higher than it was last February.
Each month the data continue to point to a real estate market on the mend. The combination of higher home sales and lower inventory levels is bringing the market back in balance.
In addition to these quantitative measures, the Association is also hearing anecdotal evidence that conditions are improving. Realtors say they are seeing more buyers; sellers are making fewer concessions to close a deal; and, in some cases, multiple buyers are competing for a single property. The market is clearly changing from the past few years.
For buyers, this means now may be the time to get serious about finding a home — especially before a possible rise in interest rates and home prices. Consumers who are interested in learning more about the real estate market in their areas can contact a local Realtor and visit UtahHousingTracker.com.
April 18, 2012 | Share: