The Wasatch Front housing market has caught the blues that have plagued much of the rest of the nation.
After defying the national trend of diminished home sales for the first half of this year, third-quarter reports compiled by the Boards of Realtors for Salt Lake, Davis and Utah counties show that the number of homes sold has dropped significantly. In some areas, the reduction is as much as half when compared to the same July through September period as last year.
The number of homes sold in the third quarter in Salt Lake County was down 33.8 percent compared with that same period last year. Sales in Utah County dropped 33.9 percent, and Davis County saw a 24.3 percent drop.
It is not all bad news for homesellers, however, as housing prices along the Wasatch Front continued to rise in most neighborhoods. But the gains which topped 20 percent for most of 2006 have dropped into the single digits.
Some areas, such as the Capitol Hill and Avenues areas of Salt Lake City and parts of Lehi, saw the average sales price drop. The Capitol Hill and Avenues drop in price was almost 14 percent, although the number of homes sold in those areas dropped less than many other areas, with a 9 percent reduction.
Only Taylorsville and Kearns saw an increase in the number of homes sold, although the median home price in those cities dropped by about 1 percent, to $224,000.
The most expensive homes along the Wasatch Front were generally in the southeastern portion of Salt Lake County, where the areas around Little and Big Cottonwood Canyons had an average median home price of $396,000. Parts of Draper and Sandy had median home prices of $390,000, an increase of about 8 percent.
Gary Cannon, president of the Salt Lake County Board of Realtors, remained optimistic in his assessment of the situation. The Wasatch Front housing market is returning to the "speed limit," after top-velocity increases during the last couple of years.
"It's not a sign of a bad or slumping market," Cannon said. "It's just normal growth and where we should be."
Fueling his optimism was the continued strength of the Utah job market, which is the strongest in the nation. That and an always growing population will create an ongoing demand for new housing, he said.
"Those are all tell-tale signs that the market will be stable," he said. "Sellers are more realistic with prices, and houses are staying on the market longer. ... But people are still able to buy, and people are still able to sell."
The hardest homes to move are those over $500,000, he said. Few buyers can afford those homes, especially with more creative financing options being eliminated."The median price being pushed to $300,000 requires an annual income of around $90,000," he said. "That's a good chunk of dough, and not a lot of people make that."