Higher prices will bring more houses onto the market. We're in that period when the market sends a signal to homeowners that would like to sell that things are improving. —Jim Wood, director of the University of Utah's Bureau of Business and Economic Research
SALT LAKE CITY — Housing prices in northern Utah are showing improvement, a new report shows.
According to the Salt Lake Board of Realtors, home prices in Salt Lake County showed double-digit gains in this year's third quarter.
For the July-September period, the median single-family home price in Salt Lake County increased 11 percent to $218,000, compared with a median price of $197,000 in the third quarter 2011.
The third quarter marked the second consecutive quarterly price increase in Salt Lake County. Home prices in the second quarter increased 6 percent year over year.
"Salt Lake City ranks among the top 25 major U.S. cities showing the biggest home-price increases," said Donna Pozzuoli, president of the Salt Lake Board of Realtors. "In fact, this year is the first time in five years Salt Lake home prices have made a comeback."
Among the ZIP codes experiencing the largest percent increases in median home prices during the third quarter were 84123 in Kearns, which jumped 21 percent to $208,500; 84124 in Holladay, up 17 percent to $295,000; Canyon Rim's 84109, which climbed 13 percent to $284,900; 84093 in Sandy, up 12 percent to $306,950; and West Jordan's 84081, which rose 11 percent to $227,000 during the period.
Meanwhile, Utah County saw its third-quarter median sales price rise a little more than 6 percent to $205,000, with the Davis County median price increasing 8.42 percent to $206,000 and Weber County climbing nearly 8 percent to $151,000 for the three-month period.
Pozzuoli said the recent price increases are the result of low inventory levels. In the third quarter, there were 3,938 homes listed for sale in Salt Lake County — the lowest third-quarter inventory level since 1997.
The declining inventory was one of the major factors pushing sales prices higher during the quarter, said Jim Wood, director of the University of Utah's Bureau of Business and Economic Research.
After area prices dropped about 25 percent during the recession, "we're getting some of that back this year," Wood said.
"Higher prices will bring more houses onto the market," he explained. "We're in that period when the market sends a signal to homeowners that would like to sell that things are improving."
The historically low interest rates are "phenomenal," Wood said, and should help in the continued growth of the Wasatch Front housing market.
"When you have interest rates at (3.25 percent), it's going to stimulate demand," he said. "We're on the way back."
The report also showed that although a majority of cities across the Wasatch Front saw home prices increase, there were a handful that experienced price declines, including 84004 in Alpine, which was down 7 percent; Provo's 84601, down 5 percent; and 84065 of Riverton, which fell 2 percent.
The number of single-family homes sold in Salt Lake County in the third quarter reached 2,982 sales — a 12 percent increase compared with the same period last year. Single-family homes in the third quarter were on the market for an average of 81 days before being sold, down from 120 days in last year's third quarter.
Condominium sales in the third quarter showed impressive sales gains by jumping 29 percent over the same time last year.
Wood said the uptick began last quarter as inventories decreased enough that some properties began receiving multiple offers, which prompted higher eventual sales prices. That trend has helped stabilize the local housing market and push prices upward for the first time in a long while.
With current rates so low, the area housing market could experience the first double-digit increase in years in 2012, which bodes well for 2013 as well, he said.
"If interest rates stay in the 3.5 percent range, next year we'll see another 7 (percent) to 10 percent increase in prices," Wood predicted.