The value of homes in the Salt Lake metropolitan area is rising faster than anywhere else in the nation, a new study says.
And for the first time in memory, housing in the area - long considered a bargain - is now more expensive than the national average.That's according to a survey of national home prices during the second quarter of 1995 released Wednesday by the National Association of Realtors.
It said the median price of a home in the Salt Lake City-Ogden metropolitan area rose a whopping 16.6 percent in the second quarter of 1994 - from $95,600 to $111,500, a price that is $500 more than the national median. The average increase nationwide during the same time was a mere 0.2 percent.
The increase in home prices is even more startling if the figures are limited to the Salt Lake Valley. The average home listed by the Salt Lake Board of Realtors now costs $134,000, $22,500 more than that for the whole metro area, said Frank Carpenter, president of the Salt Lake Board and an associate of the real estate firm Mansell and Associates.
"But housing here is still a good buy," emphasized Carpenter. "It's not as good as four years ago, but it's still affordable. We're lucky to have the kind of appreciation in values we've experienced here in the valley."
The unlucky exceptions may be first-time buyers, who have not owned a home during the wave of real estate appreciation in the '90s and are finding it more difficult to climb on board. Those buyers, said Carpenter, will likely need help from their parents in coming up with the down payment for a first home.
Nick Scott, the Salt Lake Board's executive vice president, said the figures could be an indication that home values in other areas of the country are slowing down as much as Salt Lake's are increasing.
"Our market is actually a little slower than it has been - it's certainly not booming," said Scott. It now takes an average of 88 days for a Board-listed home to sell, up from only 53 days a year ago.
On the plus side, interest rates have remained relatively low, Carpenter noted, with variable mortgages available at 6.50-6.75 percent and 30-year fixed loans ranging from 7-8 percent - well under the 10 percent level that Carpenter said "tends to scare people" away from buying.
Carpenter predicts Salt Lake homes will finish 1995 with 5-7 percent appreciation, not as high as the 2-3 percent per month gains in 1993 and part of 1994, but still strong.
Only seven of 135 metropolitan areas surveyed had home values increase more than 10 percent - and those that did had significantly smaller increases than the Salt Lake area.
Nationally, house prices actually dropped in 54 of the 135 metro areas surveyed. The worst drop was in the Rich-land/Kenn-e-wick/Pasco, Wash., area, where the median sales price decreased 15.6 percent.
The Salt Lake area is now the 37th most expensive among the 135 metro areas surveyed. The most expensive is Honolulu, where the median home price is $340,000. The least expensive is Waterloo/Cedar Falls, Iowa, where the median price is $56,400.
While values may be rising, national realtors reported that sales of homes statewide in Utah were down 4.9 percent during the second quarter of 1995 compared with the second quarter of 1994.
But sales were still better than in most other states. Utah still managed to have the seventh-best change in sales compared with last year. Only one state, Delaware, reported an increase of home sales in the quarter.
Woods said the slowdown in sales nationally reflects consumer fears over job security as many employers continued to scale back operations during a slowdown in economic growth.