Housing slump? Not here.
Utahns spent much of the 1980s reading news stories about the fabulous gains in the value of homes owned by residents of the West and East Coasts.Now the other shoe has dropped, and while property values continue to erode elsewhere in the country, Salt Lake area home sales reached their highest levels since 1980 last year and show no signs of backing off.
That was the report Thursday from officers of the Salt Lake Board of Realtors at its annual Real Estate Economic Forecast breakfast at Little America Hotel.
"All in all, if we take a look at where we have come from and where we may be headed, Salt Lake City is positioned well and our future is still bright," said Doug Richards, president of the Salt Lake Board.
"The dramatic swings of the '80s, the booms and busts, are hopefully in the past. Continued, sustained growth should continue in spite of the real estate slump experienced throughout the country."
Board first vice president, Randal K. Eagar, agreed, adding that he projects home sales in the area covered by the Salt Lake Multiple Listing Service (MLS) to climb 10 percent to 15 percent this year and the average price of a home to go up 5 percent to 6 percent.
In his analysis of the residential market, Eagar said local home sales increased 17 percent last year over the previous year - 5,637 homes in '89 vs. 6,576 in '90.
During the period 1980 to 1990, the average price of a home in the Salt Lake market increased 24 percent, from $67,949 to $84,276. The latter figure is 4 percent higher than 1989's average of $81,331.
Condominiums, long depressed in the '80s, also enjoyed a 10 percent sales increase in 1990, said Eagar, from 740 sold in '89 to 811 last year. He said the surplus of unsold condos has been trimmed 58 percent in the last four years.
Sales of duplexes increased 35 percent last year over 1989, he said, while sales of apartments were up 7 percent. Sales of lots and acreage were up 10 percent in 1990.
"When we look only at the sales ratios for the past five years, it can be seen how much of an improvement the market is actually making," said Eagar. "There has been a sharp upturn in the sales ratio since 1988, mainly due to falling inventories of homes for sale."
Owners have a better chance of selling their homes if the sales-to-listings ratio is higher. When a constant or increased number of sales is accompanied by a declining or stable inventory of listings, the ratio improves. In 1989 the sales to listings was 33 percent but increased to 43 percent last year.
In 1991, he said, the ratio is expected to improve to nearly 50 percent - a figure that, historically, has meant a change from a buyer's to a seller's market. But he noted that current events in the Persian Gulf "could turn the market one way or the other."
Eagar said that over the past four years, inventory of unsold properties has gone down a record 36 percent, from some 24,000 in 1986 to 15,200 in 1990 - the lowest level of listings since 1977.
Ironically, said Eagar, the market forces that have been depressing real estate values nationally may help more Utahns buy their first home as prices and interest rates decline.
"With the coming of an economic recession dropping interest rates, and an improving local housing market, and an improving economic base, we could find that our affordability of homes could reach an all-time high," said Eagar.
Richards noted that even the apartment segment is holding up well, unusual in that vacancies normally climb as renters buy their own homes. He attributes the strength in rentals to the 24,000 new jobs created last year in the area which has supported rental demand even as housing sales have climbed.