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SALT LAKE CITY -- After several years of robust growth, home appreciation in Utah is slowing down. The Office of Federal Housing Enterprise Oversight said homes in the state appreciated by 1.9 percent in the year ending in June. That's down from 5.6 percent from the agency's report from last year and several years of double-digit increases.
Utah spent five consecutive quarters as the top state in the nation when it came to home appreciation. It peaked at 17 percent in the year that ended June 2007. Utah is now ranked No. 16 in the country.
Some economists believe home prices in the state will fall before sales pick up again.
"It all boils down to affordability," said Mark Knold, chief economist for the Utah Department of Workforce Services. "Even if you have a strong economy, if home prices get too high, you stop buying."
Several factors have led to the downturn, including rising interest rates, tighter lending standards and higher mortgage rates.
Sales of new and existing homes are down compared to last year.
"If you drive around Holladay, you see all kinds of "For Sale" signs. And homes priced above $500,000 -- they seem to sit around forever," said Rod Linton of Holladay.
The latest federal figures may understate Utah's situation. The report uses only conventional mortgages and not larger loans on pricier projects that are having the hardest time selling.
The Salt Lake Board of Realtors said this week that 71 percent of home sales in Salt Lake County in July were for properties priced less than $300,000. The board said the most active range was from $200,000 to $250,000.
Sales of single-family homes and condos in Salt Lake City dropped 10 percent in July compared to June and down 22 percent compared with July 2007.
The slowdown in July comes after five consecutive months of increasing home sales. |
