Housing 'healthy,' not likely in bubble

Salt Lake County home prices soared to double-digit percentage increases in this year's third quarter, but real estate watchers believe the hikes do not show evidence of a housing "bubble" along the Wasatch Front.

Deseret Morning News graphicReal estate valuesRequires Adobe Acrobat.

In Salt Lake County, the median price of a home rose to $189,500, up 12.8 percent from $168,000 in the third quarter of 2004, according to data provided by the Wasatch Front Regional Multiple Listing Service, which tracks sales of existing and newly constructed homes listed through a real estate agent.

Median values are the midway point at which half of all homes sold in a particular ZIP code are higher in price and the other half are lower.

"I think it's extremely healthy growth without making us a target for any sort of bubble," said Debra Sjoblom, president of the Salt Lake Board of Realtors. "Once you start getting growth that is 35, 40, 50 percent, then all of a sudden the whole bubble becomes more of a reality."

During the quarter, 4,317 housing units were sold in Salt Lake County, a 22 percent rise over a year ago. The typical Salt Lake County home listed in the third quarter was on the market 42 days, down 10 days from the same quarter in 2004.

"This makes for a very healthy market," Sjoblom said. "Sellers can sell their houses. Buyers can still buy houses without any threat that they may tumble."

In Olympus Cove, located on Salt Lake County's east bench (ZIP code 84117), median values jumped 36 percent in the third quarter to $317,200. The Brighton/Cottonwood areas also saw a nearly 35 percent spike, with a median value of $286,000.

Sjoblom said an incredible amount of activity is occurring in the southwest part of Salt Lake County — in cities like South Jordan, West Jordan and Herriman — where hundreds of units sold during the third quarter.

"You cannot buy new construction on the east bench of Draper for $300,000," Sjoblom said. "In the southwest, where the land is a little more plentiful, the houses are less expensive."

In neighboring Utah County, the median price of a home rose to $179,900, up 11.3 percent from $161,607 a year earlier during the same period. At $463,000, Alpine continued to hold the highest median housing value of any city along the Wasatch Front.

In Davis County, the median price of a home was at $177,900, up 10.8 percent. In Weber County, the median price was $130,000, up 5.7 percent.