High Utah Home Prices Slow Housing Market
Houses in Tooele County, Utah, were selling well above appraised values during a fast and furious 2006, but prices appear to have peaked earlier this year, making buyers more cautious.
That extra caution is resulting in a cooling period for the valley’s hot residential real estate market, which last year boasted some of the most desirable mortgage loan costs in the country.
During the first quarter of 2006 there were 413 Tooele County properties listed with the Wasatch Front Multiple Listing Service. During the first quarter of 2007 there were 469 listed.
About 65 percent of properties listed sold during the first quarter of 2006 while 56 percent listed sold during the first quarter of 2007.
That slowdown coincided with Utah home prices jumping from an average of $169,000 last year to $224,000 as of March of this year - a 33 percent increase.
“We’re still seeing a strong market, but we’re seeing buyers negotiating more on the sale price. A lot of surprised sellers are standing back and re-evaluating, deciding what is a fair price,” said Michelle Warner, president of the Tooele County Board of Realtors.
“Right now I would say the market is taking a breather after a foot race last year. This pattern should continue for six to seven months. It’s a good time for home buyers & not so much for sellers.”
Information from the multiple listing service shows overall Tooele Valley prices increased about 18 percent in 2006 & a monumental increase compared to a national increase of about 5 percent during the same period.
“We’re seeing an influx of people come here,” Warner said.
“People still want to relocate from the Wasatch Front and mortgage interest rates and land prices are still lower here than in other areas. Last year the market here was rocking. Even real estate agents couldn’t keep up.”
Homes weren’t the only segment of the market to see drastic gains within the last year. Land prices nearly doubled over the past 18 months, with five-acre parcels that sold for around $95,000 in 2006 now selling for an average of $195,000, according to Warner.
The average price for houses may be slightly skewed by new construction at the high end of the market, where fluctuations in mortgage rates matter less.
Two new houses under construction within the Doloraso Estancia development on Durfee Street in Grantsville are listed at $1.5 million and $799,000.
Four other houses in Grantsville are listed in the $400,000 to $500,000 range. Six houses in Erda are listed in the $490,000 to $525,000 range.
About 52 houses in the 84074 zip code (Tooele, Erda, Lake Point, Stansbury Park) are currently listed at prices above $300,000 - still an affordable sum for a Utah mortgage seeker.
SOURCE: Tooele Daily Transcript