The Wild Ride in Housing Prices

  The last 8 years have been a wild ride for housing prices.  Never has the local real estate industry faced such volatility.  From 2004-2007 the median sales price of a home increased by a stunning 57%.  In 2006 alone prices increased by a near farcical 27%.  The run-up in prices, however, was short lived.  By 2008 prices weakened and began a stead decline over the next 3 years of about 6% annually until 2011 when priced declined 9%; the second worst single year decline in housing prices in 60 years.  Only the 12% decline in 1958 was worse.  Prices finally hit bottom in 2011 at $204,600 inflation adjusted dollars.

 In 2012 prices finally turned as the median sales price of an existing home rose 6% to $211,000.  In inflation adjusted dollars the increase was little less than 4%.  Every city in the county with the exception of South Salt Lake, experienced increases in housing prices in 2012.  The double digit strength of prices in the last 6 months was very surprising.  With this recent uptick housing prices in Salt Lake County are now back to their 2005 level.  Nationally prices have fallen to their 1998 level.

  Housing prices have made impressive gains despite the drag from short sales and REO sales.  In 2012, short sales totaled nearly 1,600 homes; a 15% share of all homes sold.  While the number of short sales was increasing in 2012 REO sales were declining as financial institutions steered finally troubled home owners away from foreclosures to short sales.  Consequently, the inventory of foreclosure filing in Utah is shrinking.