Elaine Thompson, Associated Press
SALT LAKE CITY — Jessica Rancie, 29, came to the United States about six years ago from her native Australia to serve an LDS mission. She would eventually relocate to Utah, taking a position as a lawyer for a downtown Salt Lake City law firm.
After sharing an apartment with friends, she recently began looking for her own home because “it was time to move out … and grow up,” she said. She is hoping to find a place with at least three bedrooms, a couple of bathrooms and a basement in the $200,000 to $300,000 price range.
“Houses are fairly inexpensive right now, and I can’t see them going any lower,” Rancie said. “Houses in Australia are double or triple what they cost here.”
Rancie is part of the continuing recovery of the housing market. Strong job growth in Utah combined with low interest rates will give a boost to both buyer confidence and housing affordability, according to Jim Wood, director of the Bureau of Business and Economic Research at the University of Utah. He said home sales and prices will also benefit from the release of pent-up demand.
“During the recession, job loss or foreclosure forced many families to move-in with friends or family and “double-up,” which in turn reduced housing demand,” Wood said. “Some of this demand will be restored to the market in 2013.
"In addition, rising rental rates will prod some renters into home ownership further expanding the demand for housing. Consequently, home sales will increase by 15 percent to 20 percent pushing sales to around 13,000 units,” he said.
The rebound in condominium, twin home and town home sales will also continue as sales increase from 2,225 units in 2012 to 2,600 units in 2013, he predicted.
“The affordability of multifamily units will be particularly attractive to many renters and doubled-up families,” he said.
“Demand will continue to outpace supply in 2013 putting upward pressure on prices.”
Some of this pressure could be offset by an increase in listings, but presently there is no indication of any listings surge, he said. In fact, the Salt Lake Board of Relators reports that the current supply of listings is the lowest level since 1997.
And if the market avoids the oft-predicted next wave of foreclosures and dodges federal actions that could dampen demand — the resolution of the fiscal cliff was a win for housing on several counts — price increases will exceed the 6 percent gain of 2012 and likely increase at a double-digit rate of 10 percent to 12 percent, Wood said.
The Board of Realtors reported that local home prices have continued to rise. The median price of homes has increased every month since April 2012, the agency reported.
“There are more buyers than sellers,” said Dave Frederickson, president of the Salt Lake Board of Realtors. “This is resulting in multiple offers, and in some cases offers coming in above asking prices.”
The hottest price range is $250,000 and below, he said. “Nearly two out of three homes that are sold in Salt Lake County fall within this price category,” he said.
The best selling areas in Salt Lake County have been Magna, with an 85 percent increase in sales over last year at this time; Cottonwood Heights, up 48 percent over last year; and Millcreek, up 45 percent during the past 12 months.
“We expect an increase in sales of condominiums and townhouses because of the limited supply of single-family homes,” Fredrickson said. “We also expect price increases for multifamily homes this year."