What had been skyrocketing home prices in the Salt Lake City-Ogden metro area are continuing to level off, according to first quarter figures from the National Association of Realtors.
They rose only half as fast as the national average over the past year. That comes after they had been among the nation's fastest increasing during the two years before.The value of a typical home in Salt Lake City-Ogden rose 1.8 percent from the first quarter of 1996 to the first quarter this year - less than half the 4 percent average increase nationally.
The problem, said Carter Knapp of the Salt Lake office of CB Premier Realty, is not that the local market is going in the tank but that it has reverted to "normal."
"It's been so hot that a return to a normal market seems like a bust, but it's not," said Knapp.
There's no question that Salt Lake City is now a buyer's market, said Knapp. A year ago, sellers could expect their home to be sold in about 55 days; now it's more like 100, nearly double. And that tends to push down prices.
"When there's a lot of competition for properties, the prices go up," said Knapp. "Now, the reverse is happening and the market has really softened. This is good for buyers but not sellers."
During the first quarter of 1997, sales were off 23 percent compared to the same period a year ago. But the first quarter of 1996 "was a fantastic quarter," said Knapp.
Nor is the downturn limited to the large, expensive homes. "Usually the top end suffers first because there are fewer buyers in that segment," said Knapp. "But it's fair to say this downturn has affected the whole market."
Still, a soft market is not the same as a bad market, he cautioned. There has only been about a 2 percent increase in prices in recent months - down from double-digit increases in recent years - but homes are not yet depreciating in value.
Knapp points to slightly declining job growth and a slight rise in interest rates for the softening.
According to the NAR figures, the value of Salt Lake-area homes rose a whopping 16 percent in 1995 - which was then second highest among the nation's 131 largest metro areas. And in 1994, they rose 11 percent - fourth highest in the nation.
The latest 1.8 percent increase ranked only 79th highest among the 131 largest metro areas. Similar slower increases also were reported during the previous two quarters.
The Realtors association reported that the cost of a median home in Salt Lake City-Ogden now is $123,400 - up from $121,200 during the first quarter of 1996.
That made Salt Lake City-Ogden the 29th most expensive housing market in the nation among the 131 major metropolitan areas.
To show how much prices have increased in Salt Lake City-Ogden recently, the median in 1993 was $84,900. That means a median-priced home there appreciated in value by 45 percent in just over three years - even with the recent leveling-off.
The median is the midpoint in the price range. Half the homes sell for more, and half sell for less.
New figures released Thursday showed that the most expensive housing market in the nation was Honolulu - where the median home cost $313,800. The least expensive was Ocala, Fla., where it cost $58,700.
Other markets with prices similar to the $123,400 median price in Salt Lake City-Ogden included: - $126,300 in New Haven, Conn.
- $123,300 in Madison, Wisc.
- $122,100 in Ft. Lauderdale/
Hollywood/Pompano Beach, Fla.
- $119,800 in Las Vegas.
Markets with similar price-increase rates as Salt Lake City's include: Fargo, N.D., and Pensacola, Fla., 1.8 percent each; and Montgomery, Ala., West Palm Beach, Fla., and Las Vegas, all 1.9 percent.
Russell K. Booth, NAR president, said a stable economy and strong sales are helping to keep pushing up home prices nationally.
"We are continuing to see strong sales in the first-time and trade-up markets," he said. "Consumers are confident about the economy and are taking advantage of great buying opportunities." *****
Additional Information
Median resale prices
Median resale prices in thousands of dollars for previously owned homes in western metropolitan areas in the United States from January through March, followed by the percentage change from the same period in 1996, based on a survey by the National Association of Realtors.
Metro Area Price Change
Albuquerque 131.7 7.4
Denver 136.2 4.4
Las Vegas 119.8 1.9
Los Angeles 169.2 - 1.7
Orange Co. 215.3 4.3
Reno, Nev. 138.5 - 1.6
Salt Lake City 123.4 1.8
San Diego 176.4 1.5
San Francisco 271.1 7.5
Seattle 167.6 4.3
Northeast 141.7 2.2
Midwest 102.1 5.6
South 102.9 3.9
West 153.7 3.1
United States 119.4 4.0