Utah, like many states, suffered a real estate slump after the related market crash in 2008. The downturn in sales drove down home prices drastically and left the home-buying market in the doldrums for years afterwards. However, in 2012, Utah experts believe the real estate market is on the upward climb and the light at the end of the tunnel is might actually be real and approaching, finally reaching an upturn for the state.
As reported in the Standard-Examiner, in February 2012 Lawrence Yun, Utah’s chief state economist, made it a point to come out and declare that Utah was in the lead for regions that would see improved housing market activity given the potential available in the mixture of markets, pricing, labor opportunities, and economic trends. Much of this sentiment was based on real measurements of state population increases that were occurring in Utah over the last five years.
Additionally, the Utah Association of Realtors closed 2011 with home unit sales measurements not seen since the height of 2007 real estate market, realizing an annual sales movement of 33,000 units. 2011 also saw an increase in sales activity of at least 10 percent for the Utah market versus the prior year.
Major catalyst drivers for 2011 included historically low mortgage borrowing rates as well as very affordable home prices that working families can afford to purchase. In some areas of the state home prices are still falling four years after the crash first began. The resulting buying trend is so strong, Yun expected that 2012 would also produce an ongoing sales level increase ranging potentially as high as 9 percent over 2011 figures.
The above said, one dampener on the real estate market continues to be the much more stringent process banks and lenders are requiring for approved home loans. In 2007, lenders were much more liberal in approving home loans. Today borrowers are filtered out far more rigidly than what would be considered normal lending practice in 2007. The hesitation to lend has held back sales figures as a result.
Realtors Busy Again
The financing obstacles aside though, Utah realtors, like those in the Park City, Utah real estate area, are finally seeing their workdays busy again. Some are acknowledging that they are back to heavy demand with 11-hour workdays which haven’t been seen in years. Realtors are also seeing an old buying trend that hasn’t been around for a while either – competing offers on the same house for sale. Where homes are in good locations at attractive starting prices, realtors in Utah are once again seeing active bidding competition between multiple buyers. That means good news and commissions for all involved realtors.
Foreclosure Inventory Reductions
Overall nationally, according to The Salt Lake Tribune, home sales figures are still lagging well behind the annual 6 million units that many economists feel equals a working, healthy real estate market. As part of the west, Utah sits in a group representing 4.4 million sold units as of 2011. That said, Utah is seeing both an increase in the number of first-time homebuyers as well as a decrease in the amount of market-depressing foreclosure inventory. The drop in foreclosure inventory is particularly important for Utah as it makes room for new homes and building to occur again, removing the glut from the market. Again, both are feeding off of good pricing and low borrowing rates along with job availability.
The Upward Trend
Given all the above, Utah may very well be seeing the firm beginning of an upward trend in home sales and related real estate transactions. The summer sale season is coming into full swing as of June 2012, so how activity performs will depend again on rates and pricing staying low and banks being willing to provide financing. If all come into agreement, then Utah could very well see a sales increase over 2011 and a return of a normal real estate market.