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2011-11-09 09:20:15
Wasatch Front home sales up, prices still down

Wasatch Front home sales up, prices still down                 

Sales of existing single-family homes in Salt Lake County reached the highest point in four years in the third quarter, but home prices are still falling.

  In Utah’s most populous county, 2,603 single-family homes changed hands in the July-September period, up more than 33 percent from 1,953 sales in the same three months last year, according to a report released Thursday by the Salt Lake Board of Realtors. The third quarter tally was the highest since third quarter of 2007 (2,693), just before the Great Recession began.

Although sales improved, values continued to deteriorate. The median single-family home price in the county fell to $196,000, down 15 percent from $230,000 in the third quarter of 2010 and off 23 percent from the historic third-quarter median peak of $256,000 in 2007. The same pattern of increasing home sales and declining home prices was evident in the other Wasatch Front counties, as well.

In a recovery, no matter how tepid, home sales tend to improve first, said DeAnna Dipo, president of the Salt Lake Board of Realtors. 'With home sales making a comeback, we expect home prices to stop falling.'

But how long that takes remains to be seen. Many economists expect prices along the Wasatch Front to bottom out  by the end of the year, but others say it might take until 2012 for the housing market to stabilize .

Zions Bank economist Jeff Thredgold is in the latter category. But even when home prices begin to rise again, he said, the increase is likely to be minimal. 'We’re not headed back to double-digit home price increases anytime soon.'

Although home values may slip a bit more, affordability may not get any better than it is today. That’s because the average rate on the 30-year fixed mortgage remains near historic lows of about 4.10 percent, mortgage giant Fannie Mae reported Thursday, with 15-year loans averaging about 3.40 percent. Most experts agree that rates probably won’t go any lower and in fact are expected to rise in coming years.

Regardless of what’s on the horizon, Salt Lake City Realtor Jan Lowe said financing remains a large obstacle for many buyers. 'You can’t beat today’s interest rates,' she said. 'But you need to have good credit and you’ve got to have all your ducks in a row paperwork wise' to get a loan.

It’s especially tough for some buyers, such as self-employed people and those with fluctuating incomes, to qualify. Lenders also are heavily scrutinizing loans made to purchase condominiums, a segment of the market that’s been hit hard by the downturn.

Despite an overall drop in home prices, there were six ZIP code areas in Salt Lake County where values increased. They are Riverton (84065), up 6 percent; West Jordan (84088), up 5 percent; the Avenues area in Salt Lake City (84103), up 19 percent; the Sugar House area of Salt Lake City (84105), up 1 percent; the Federal Heights area of Salt Lake City  (84108), up 2 percent; and South Salt Lake (84115), up 8 percent.

Condominium sales were up 47 percent over the past year, while prices fell 14 percent, compared with last year’s third quarter.

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