Utah prices for homes sink while sales climb

If you're listing your house in Utah County, be ready to slash your price.

According to data released Tuesday by the Utah Association of Realtors and the Salt Lake Board of Realtors, the Utah County housing market was brisker in the third quarter of 2009 — up 14.17 percent in number of units sold compared with the same time a year ago.

But the average price dropped from $229,900 in the third quarter of 2008 to $215,000 in the third quarter of 2009.

That was true, on average, throughout the Wasatch Front — the number of homes sold increased by 4 percent in the third quarter of this year, compared with the third quarter of last year, but sales prices dropped in almost all ZIP codes.

"On average" because not all counties saw an increase in home sales. They increased by 9.08 percent in Davis County and by the aforementioned 14.17 percent in Utah County. But sales were down in Salt Lake, Tooele and Weber counties by 1.16, 13.64 and 7.31 percent, respectively.

In Utah County, the housing market has been big on the supply side, with plenty of unoccupied houses with "for sale" signs on the lawns, said Matt Barton, president of the Utah County Association of Realtors.

"In 2005, 2006 and somewhat into the beginning of 2007, Utah County, percent-wise, was leading the state in new construction," Barton said. "And so really what happened is we had a buildup of construction inventory" when the market crashed in the middle-to-late part of 2007.

"We struggled through 2008," Barton said.

But the tide has begun to turn. Interest rates have dropped. The federal government has offered a tax credit for first-time homeowners. The state has offered a grant program, too, for people who purchase newly constructed homes. The state grants first became available in the spring, which is why third-quarter data show an upswing in home sales, Barton said.

Most of the people purchasing homes in Utah County these days are first-time homebuyers, though some homeowners are looking to upgrade to a larger and more upscale home. Although they may have to sell their houses for less than they wanted, a 10 percent drop on, say, a $100,000 house is less in actual dollars than a 10 percent drop on a $200,000 home. In other words, they can get upscale homes and cheaper prices, Barton said.

Bruce Arnett, for example, wanted to move his family into a larger home so his father, who has multiple sclerosis, could move in. He took the plunge and moved from his house in Eagle Mountain to Traverse Mountain in Lehi about two weeks ago. He decided to rent out his Eagle Mountain home.

"We knew the prices were going to be the lowest that they'll be for several years," he said of his newly purchased Traverse Mountain home.