Home sales down, home prices up to start 2019
SALT LAKE CITY — Home sales are down slightly, while home prices are up at the start of 2019. And with housing permits up 8.4 percent over last year nationwide, that means more construction is coming.
Utah needs it, according to Abby Osborne with the Salt Lake Chamber of Commerce.
“For the first time in 40 years, we have more household formations than housing units. So we have a gap,” Osborne says. “We have a 54,000 shortage. It’s the old adage of supply and demand. We have intense demand, and not enough supply in the market.”
That supply and demand issue is behind the rising prices of housing. The median home value in Utah is almost $321,000. As a result, University of Utah Finance Professor Scott Schaeffer says traditional building is no longer enough.
“Nobody wants a big development built by them, but on the other hand, nobody wants to be priced out of a neighborhood,” Schaeffer says.
Zions Bank Senior Economist Robert Spendlove agrees.
“The affordability of housing is becoming a real problem,” he says.
Local leaders say the inventory is tight. In many cases, homes are only on the market for about a month. It could tick up more in the spring, but DMBA Financial Planner Shane Stewart says Utah is unique, in that it doesn’t experience the same booms or crashes that other places tend to get.
“Housing’s very – extremely cyclical, in that it gets very high and then it tapers off and goes down,” Stewart says. “We’ve been very high recently, and so it’s natural for it to slow down. Local experts are saying, ‘[Utah will have] a slow down, sure,’ but they’re pretty optimistic about the coming next couple of years.”