Inventory shortage should generally keep values on the upswing.
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Single-family home prices in Salt Lake County shot up 19 percent in the first quarter of this year, but the number of new and existing homes sold was virtually unchanged, underlining the shortage of units for sale even as demand and the economy are picking up.
The median single-family home price in the county increased to $228,750 in the January-through-March period the highest first-quarter figure since 2009. In contrast, the median price last year was $192,500, the Salt Lake Board of Realtors said Monday.
Although prices surged, sales were nearly flat from the first quarter of 2012. There were 2,190 homes sold in the period, seven fewer than the same time last year.
The first quarter is usually a slow sales period. Still, the situation was largely the same elsewhere along the Wasatch Front, including in Utah County, where sales in the state's second-most populous county rose just 4.9 percent, but prices jumped 11.8 percent.
Real estate agents say the poky sales numbers and powerful price movements are connected. They also say that prices will probably continue their ascent during the rest of 2013.
"Sales are going to be flat, if not down, because there is nothing to buy. Our inventory is at a 17-year low," said Dave Frederickson, president of the real estate group. Multiple buyer offers on homes for sale are fast becoming the norm in almost all prices ranges, he added.
Real estate agents say more homes generally aren't being listed for sale in the five-county area for two primary reasons. Some would-be sellers are waiting for prices to rise further. Others, aware of the inventory shortage, are worried that they might not find a suitable home to buy before they sell their homes.
"If someone is considering any kind of move, make sure that there are homes you would be interested in buying before you sell your home," said Angie Domichel-Nelden, a Coldwell Banker agent.
Except for Tooele County, where prices didn't change much, first-quarter median prices for homes were uniformly on the rise. The Davis County median rose 12.2 percent, while Weber County's median increased 10.2 percent. But unlike Salt Lake and Utah counties, unit sales of single-family homes soared 18.3 percent and 13.2 percent, respectively.
"Those [counties] are behaving much more as one would expect. For whatever reason there seems to be more inventory coming onto the market in both Weber and Davis counties, in relative terms, than in the other two larger counties," said James Wood, director of the University of Utah's Bureau of Economic and Business Research.
"The important point is, in Salt Lake and Utah counties, that flat trend does not reflect any weakness in the market. It just shows that there's not any inventory, and that's why you are getting the run-up in prices," he said.
Sales in Tooele County increased 10.8 percent, but the median price rose just 0.3 percent. The county hasn't seen the same influx of buyers that the other Wasatch Front counties have, so its inventory of homes is sufficient to keep prices in check, Frederickson said.
The inventory shortage is hindering sales of new homes almost as much as existing homes. Rene Oehlerking, marketing director for Garbett Homes in Salt Lake City, said all builders have started ramping up efforts in the market. Competition for undeveloped land is fierce, and inventories are low because it usually takes a year before homes can be built and prepared for sale, he said.
"We are just very low on inventory," he said. "We have sold out of every single unit that we have. If you are a buyer, you are going to have to wait until the third quarter until you have a [house] that you can move into."
Garbett's 450-unit Summerlane at the District town home project in South Jordan got started in 2007. The only units that haven't sold yet are ones under construction; everything else is gone, Oehlerking said.
Across the Wasatch Front, the most homes were sold in the Clearfield area of Davis County, with 173. South Jordan, in Salt Lake County, was No. 2, with 160 sales. Lehi, in Utah County, was third, with 154 sales.
Salt Lake County first-quarter single-family home prices
2013 • $228,750
2012 • $192,500
2011 • $200,000
2010 • $218,500
2009 • $242,000
2008 • $245,000
2007 • $245,000
Source: Salt Lake Board of Realtors