Utah Quarterly Market Report: 2014 Quarter 2

On July 9 the Federal Reserve released its Fed Minutes, announcing plans to taper back QE III through the end of the year. If the economy stays on track, the Fed plans to make a $15 billion reduction in October as well. This after cutting back $10 billion at each meeting since last fall. However the Fed will continue to reinvest the principal payments on all agency debt and agency mortgage-backed securities, and continue to purchase agency mortgage backed securities with the proceeds. So even though QE III may wind down in October, the Fed will continue to support low home loan rates. This is great news for rates in 2014! Even better, the Feds are planning on keeping interest rates low through 2015!

HOME SALES: Sales of single-family homes in Salt Lake County fell 9 percent in the second quarter (year-over-year) to 3,298 units sold, down from 3,626 units sold in the second quarter of 2013, according to the Salt Lake Board of Realtors®. In the first six months of 2014, home sales dropped 7 percent compared to the first half of 2013. Other Wasatch Front counties that experienced falling home sales included: Davis County (down 9 percent); and Utah County (down 6 percent).

“Less inventory and rising home prices have caused some home buyers to pull back or not qualify for a mortgage. Slowing sales are having an effect on home prices, which increased less than 2 percent in the second quarter.” - Angie Domichel Nelden, president of the Salt Lake Board of Realtors®.

Home sales fell in most Salt Lake County cities including: Draper, down 14 percent; Herriman, down 21 percent; Magna, down 16 percent; Riverton, down 10 percent; Sandy (84092) down 17 percent; South Jordan, down 12 percent; and Sugar House (84105) down 10 percent.

In the second quarter the median home price increased to $254,000, a 2 percent rise compared to a median price of $249,900 in the second quarter of 2013.

New listings increased to 6,584 homes in the second quarter, up 1 percent compared to 6,489 new listings a year ago.

New construction numbers have risen 49% as compared to the same quarter in 2013.

CONDO SALES: Sales of condominiums in Salt Lake County climbed to 827 in the second quarter, an increase of 3 percent compared to 802 sales in the second quarter of 2013. During the same period, the median condo price in Salt Lake County climbed to $174,900, up 3 percent compared to a median price of $170,000.