Salt Lake County drop in July home sales mirrors U.S. figures

SALT LAKE CITY — July home sales in Salt Lake County dropped by about one-third compared to a year ago, mirroring a national downward trend.

But that's no reason to be "Henny Penny sky is falling," said Salt Lake Board of Realtors President Bill Heiner.

"I think Utah is in a much better position than the rest of the nation," he said Tuesday. "Our job numbers have increased as well, so I have to be little more positive than the national media."

Heiner pointed to mortgage rates hovering near 4 percent as one reason for his optimism. He expects the market to look better and better through the end of the year, although homes will continue to take a long time to sell.

According to the Salt Lake Board of Realtors, the drop to just 718 home sales in July is the lowest since electronic records started in 1996.

Nationally, sales of single-family homes, condominiums and townhouses fell by more than 27 percent last month, to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors said. July posted the largest monthly drop on record since 1968, and sharp declines were recorded in all regions of the country.

Realtors both nationally and locally pointed to now-expired government tax credits as a reason for the end-of-summer decline.

"There were a lot of people who were on the fence," Heiner said of first-time homebuyers who purchased existing homes this spring. "Those people who were on the fence got off. I think that we're in a lull from that."

Throughout the nation, sales were particularly weak among homes in the lower- to mid-priced ranges. In Utah, however, 60 percent of the home sales in July were closed at $300,000 or less. Of those, 124 were priced between $100,000 and $149,000, and 140 went for between $250,000 and $299,999. Only three homes priced over $1 million were sold.

Nationally, the median home price was $182,600 in July, up 0.7 percent from a year ago.

One reason the market is hurting is that buyers and sellers are in a standoff over prices. Many sellers are reluctant to lower their prices, and buyers are hesitating because they think home prices haven't bottomed out.

"Price is king right now," Heiner said. "It's because of the mind-set of the buyers. They want to knock 10 percent to 15 percent, and sellers can only go so low."

For some, the plunge in home sales magnified fears about the broader economy.

"The housing market is undermining the already faltering wider economic recovery," said Paul Dales, U.S. economist with Capital Economics. "With the increasingly inevitable double dip in prices yet to come, things could yet get a lot worse."

Contributing: Associated Press

e-mail: rpalmer@desnews.com