SALT LAKE CITY — Sales of single-family homes in Salt Lake County fell 4 percent in the first quarter, the first decline in five years in year-over-year quarter listings. But a surge in home building shows a market in good health as buyers and sellers head into the spring and summer real estate season.
“We’re seeing a strong demand for construction loan financing,” Jeremy Lowry, vice president of residential lending for Zions Bank, said as more buyers are looking for new homes.
“That market is coming back,” he said. “We’re coming in to a more “normalized market,” which we haven’t had for about six or seven years.”
Lowry said the market is becoming “healthier” due to more reasonable supply and demand forces compared to the “bubble” years that led to the economic downturn.
He said as long as homes are well-priced, then new and existing home sales will continue to improve for the foreseeable future.
“It will continue to be a bit of a 'sellers’ market,'” he said.
“The anticipation is that the (over) next five to seven years, we are going to see a wave of buying and building (not experienced) since the end of World War II because of the pent-up demand that’s in the marketplace.”
The improvement in the market was the main reason Sandy resident Kim Crook, 35, chose to put her family's home up for sale. The married mother of three said her family is upgrading to a larger home with a bigger lot and felt this was an opportune time to make the move to a more spacious property.
"We bought this home nine years ago when the market was at its peak, (then) the market definitely took a turn for the worse," Crook said. "We've been waiting for the pendulum to swing back in the other direction."
She said last year, a number of close friends put their homes up for sale at this same time and received multiple offers. That gave her optimism and belief that it was time to test the market, she said.
"Things just seemed to go really smoothly for them to sell," Crook said. "It seems like inventory is low and there are more buyers than sellers."
She said her family hopes to have similar good fortune as they try to sell their home. They have had plenty of interest in the two weeks it has been on the market, she said, but no offers yet.
"We've had a ton of traffic come through," Crook said. "So (we're) just waiting for an offer."
Meanwhile, the 4 percent drop in existing home sales year over year reflects the spike in home prices, according to the Salt Lake Board of Realtors.
In the January through March period, Realtors sold 2,158 single-family homes — 100 fewer homes than were sold during the same quarter last year. The first quarter decline follows a robust selling year in 2013.
Single-family home sales in Salt Lake County last year were the best on record in seven years. More than 11,700 homes were sold during the year, up 6 percent over 2012.
Home sales fell in a number of Wasatch Front communities, including a big drop in the Sugar House ZIP code of 84105, down 22 percent; the Avenues in Salt Lake City, down 16 percent; and Canyon Rim, down 3 percent.
In unincorporated Salt Lake County, home sales in Magna fell 32 percent, while sales in Kearns declined 6 percent. In the suburbs, the Sandy ZIP code of 84070 decreased 9 percent, Draper and Herriman fell 11 percent, with South Jordan down 13 percent, while Riverton decreased 15 percent.
The dip in home sales was a reflection of higher home prices, said Angie Domichel Nelden, president of the Salt Lake Board of Realtors.
“Higher home prices have made home buying less affordable,” she said. “The median home price in this year’s first quarter increased to $245,000, a 29 percent rise compared to a median price of $190,000 two years ago.”
The number of new home listings increased 16 percent compared to the same period last year. The report showed that during the first quarter median home prices increased 7 percent to $245,000 compared to $228,450 in the first quarter of 2013.
This year’s first quarter median home price was the same median price as the first three-month period of 2007, prior to the start of the Great Recession, the report stated.
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