Real Estate Info for Salt Lake & Davis County

With the expiration of the home buyer tax credit, I thought this would be a good time to establish a base line report for reference later in the year in terms of market activity. For the first four months of the year, the activity levels in Farmington have been a mixed bag. Listing activity is in line with the same period last year while sales activity is up significantly over last year (impact of the tax credit).

In spite of the increase in the sales activity, average and median sale prices are down considerably from the same four month period last year. In addition, even with a similar level of new listings and an increase in sales activity, overall inventory levels, measured by “months inventory” remain elevated. So, what does all this mean??? The simple answer is our market continues to be in flux and this will likely continue through calendar year 2010. The primary macro economic factors impacting our market continue to be unemployment levels and the lack of growth in per capita household income levels. What it doesn’t mean is that our current real estate market has collapsed. As you can see from the enclosed report, transactions are continuing to occur. This is true in Farmington, in Davis County, Salt Lake County and Utah in general. There are still buyers in the market taking advantage of the historically low interest rates (more on that in a moment) and reduced home prices.

What it means for sellers is that properties need to be priced accurately to be competitive in this market. Buyers can and are being quite selective in the homes they choose to purchase. Why? Because they can. There is sufficient inventory available that buyers have the real estate equivalent of a smorgasbord.

As you review the average sale price comparisons it is important to note the 2009 data for Farmington was impacted by two sales over $700,000 occurring early in the year. Thus the large decrease in average prices in 2010 is actually overstated. A more useful figure for a year-to-year comparison is the median price. Not surprisingly, Farmington has experienced a somewhat larger overall decrease in median price points than Davis County as a whole. This is not surprising given Farmington higher overall sale prices over the years. Even with the price adjustments we have experienced over the past two years, Farmington continues to have one of the highest median home sale prices in Davis County. So far in 2010, the highest median home sale prices in Davis County are reported in Fruit Heights ($372,000) and South Weber ($272,000). However, in both of these cities there have only been 11 and 10 reported sales respectively for the first four months of the year.

Now, about interest rates. There was concern that interest rates would jump sharply when the Federal Reserve and the Treasury stopped purchasing mortgage backed securities as of the end of March. Overall, approximately $1.25 trillion (yes with a “T”) of mortgage backed securities were purchased under the program. When the buying stopped, there was concern interest rates would spike. Although they did increase somewhat, by the end of April, rates were nearly back to where they were in February & March. The next “big thing” being discussed in the financial markets is when will the Fed will begin selling the mortgage backed securities they just finished buying. I won’t even suggest I know an answer but if you are looking to make a move this summer, I would suggest talking to a mortgage professional to get their perspective. The number and types of financing options available today is much different from what was available just two years ago. Even if you need to sell a property first, a proactive discussion with a lender is recommended.