Utah's housing market has plenty of supply and plenty of demand, but high prices are preventing transactions, according to Dave Mansell, president of the Utah Association of Realtors, who spoke to the Governor's Office of Economic Development Board on Friday.
The housing market was "moderate to good" in 2004 and 2005, he said. "We're back to those, instead of seeing the market swell in '06 that was really not sustainable."
While 2007 fourth-quarter home sales were off 40 percent from a year earlier "that's a problem, as you might guess," Mansell said affordability appears to be the culprit.
Along the Wasatch Front, sales of homes costing $220,000 or more were down 41 percent in the last half of 2007, compared to a year earlier, and the number of listings for those homes was down 19 percent.
Homes costing $500,000 or more saw sales slip 27 percent, while the number of listings rose 110 percent. In December 2007 and January of this year, sales of those higher-priced homes were off 6 percent, but listings were up 62 percent from a year earlier.
As a result of the market downturn, Utah appears to be rid of many investors at one time perhaps 40 percent of the market who swooped in a few years ago and drove up prices, Mansell said. Most homebuyers in Utah now are actually occupying their homes.
Since 1980, Utah home prices have risen an average of 293 percent, although some states have seen increases topping 400 percent, he said. But wages in Utah have not kept pace, meaning the opportunity for many people to buy homes has been stripped away.
Mansell predicted that the home-sales problems will not be solved in 2008, but the solution will begin this year.
"You'll find that the market will continue to be what it is, so far as 'moderate,'" Mansell said. "I think we can look at about the same numbers as about '05, which all of the information we go by says was one of the best years in history for us. We've just kind of gotten used to '06 and '07 ... It's by no means a terrible situation. The market actually is quite healthy."The association has launched a $350,000 media campaign "to help the public not just to go buy a house but to understand that all the things that go into buying a house and all the reasons for buying a house in Utah are still pretty strong as compared to the rest of the nation," he said.