Real Estate News
By Dave Anderton
Deseret Morning News
Deseret Morning News
Utah home prices climbed 17.4 percent in the third quarter, the second-highest appreciation rate in the nation, according to a report by the U.S. Office of Federal Housing Enterprise Oversight.
In the second quarter, Utah ranked 10th in the nation in house-price appreciation. But in the most-recent quarter, the Beehive State's appreciation rate was second only to Idaho, which showed a 17.5 percent increase compared to the third quarter a year earlier.
The OFHEO House Price Index tracks average house price changes in repeat sales or refinancings of the same single-family properties.
While home prices in Utah continue to show dramatic gains, there are signs that sellers may have to more competitively price their homes as fewer sales begin to take hold. Home sales were down 6 percent statewide in the third quarter, according to the Utah Association of Realtors. And in the same quarter in Salt Lake County, homes sales fell 11 percent, according to the Salt Lake Board of Realtors.
Falling sales could mark the first signs of a shift from a sellers' market to a buyers' market.
The OFHEO report said Utah's high appreciation rate, as well as rates in a handful of other states, appear to be the exception. Across the nation, home prices rose 7.7 percent in the third quarter, their slowest pace since the second quarter of 1998.
Kelly Matthews, executive vice president and economist at Wells Fargo in Salt Lake City, said he was hoping Utah's appreciation rate would have slowed in the third quarter.
"I think that we would be better off with single-digit appreciation, something closer to the national average," Matthews said. "We are going to have some adjustment in the number of homes being built and the number of homes being sold."
That said, Matthews continues to be optimistic about Utah's housing sector, saying the state is not "overbuilt."
"It will be easier to absorb them if we can afford them," Matthews said. "Hopefully we don't have a big adjustment in Utah."
Ron Taylor, a real estate agent specializing in selling higher-priced homes with AllPro Realty Group in Salt Lake City, said more expensive homes are taking a little longer to sell.
"The sellers are a little bit more flexible on the prices," Taylor said. "But they are still selling well."
Taylor said Utah's slowdown is due to two reasons: the winter season and the effects from the national slowdown.
"It hasn't affected us, certainly, the way it has the rest of the country," Taylor said. "It is surprising that even though homes are appreciating that fast in Utah, people are still qualifying for them and buying them. The low interest rates and the flexible loan plans make more expensive homes affordable for more people. It's good for the homeowners when their homes appreciate that much."
The report noted that two Utah cities ranked in the top 10 highest rates of house-price appreciation among 275 U.S. metropolitan areas. St. George ranked No. 9, with home prices there climbing 20.6 percent in the third quarter compared to the same quarter in 2005. Salt Lake City was No. 10 at 20.4 percent. The Provo-Orem area placed at No. 18 at 17.6 percent.
Kay Ashton, regional vice president of Home Loan Corp. in Bountiful, said Utah's high prices have not prevented customers from qualifying for loans.
"We noticed a surprising number of our buyers this year were moving in from out of state," Ashton said. "It's been very nice to have a strong appreciating market and a hot purchase market. Utah was very slow to come to the appreciation table."
Deseret Morning News graphic
The OFHEO House Price Index tracks average house price changes in repeat sales or refinancings of the same single-family properties.
While home prices in Utah continue to show dramatic gains, there are signs that sellers may have to more competitively price their homes as fewer sales begin to take hold. Home sales were down 6 percent statewide in the third quarter, according to the Utah Association of Realtors. And in the same quarter in Salt Lake County, homes sales fell 11 percent, according to the Salt Lake Board of Realtors.
Falling sales could mark the first signs of a shift from a sellers' market to a buyers' market.
The OFHEO report said Utah's high appreciation rate, as well as rates in a handful of other states, appear to be the exception. Across the nation, home prices rose 7.7 percent in the third quarter, their slowest pace since the second quarter of 1998.
Kelly Matthews, executive vice president and economist at Wells Fargo in Salt Lake City, said he was hoping Utah's appreciation rate would have slowed in the third quarter.
"I think that we would be better off with single-digit appreciation, something closer to the national average," Matthews said. "We are going to have some adjustment in the number of homes being built and the number of homes being sold."
That said, Matthews continues to be optimistic about Utah's housing sector, saying the state is not "overbuilt."
"It will be easier to absorb them if we can afford them," Matthews said. "Hopefully we don't have a big adjustment in Utah."
Ron Taylor, a real estate agent specializing in selling higher-priced homes with AllPro Realty Group in Salt Lake City, said more expensive homes are taking a little longer to sell.
"The sellers are a little bit more flexible on the prices," Taylor said. "But they are still selling well."
Taylor said Utah's slowdown is due to two reasons: the winter season and the effects from the national slowdown.
"It hasn't affected us, certainly, the way it has the rest of the country," Taylor said. "It is surprising that even though homes are appreciating that fast in Utah, people are still qualifying for them and buying them. The low interest rates and the flexible loan plans make more expensive homes affordable for more people. It's good for the homeowners when their homes appreciate that much."
The report noted that two Utah cities ranked in the top 10 highest rates of house-price appreciation among 275 U.S. metropolitan areas. St. George ranked No. 9, with home prices there climbing 20.6 percent in the third quarter compared to the same quarter in 2005. Salt Lake City was No. 10 at 20.4 percent. The Provo-Orem area placed at No. 18 at 17.6 percent.
Kay Ashton, regional vice president of Home Loan Corp. in Bountiful, said Utah's high prices have not prevented customers from qualifying for loans.
"We noticed a surprising number of our buyers this year were moving in from out of state," Ashton said. "It's been very nice to have a strong appreciating market and a hot purchase market. Utah was very slow to come to the appreciation table."
E-mail: danderton@desnews.com