Salt Lake Board of Realtors April Report

Reproduced from a report prepared by the Salt Lake Board of Realtors. It looks like the link will go dead soon, thus the reproduction.

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Salt Lake County Sales Activity Trend Report Report Date: Monday, May 25, 2009 Time Period: April 1, 2009 through April 30, 2009 Area(s): 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111

Price Class	Single Family Home Sales				Condo Sales	* New Listings
	2 Brm or Less	3 Brm	4 Brm or More	Total
$0 - $49,999	0	1	0	1	0	11
$50,000 - $74,999	0	0	0	0	3	3
$75,000 - $99,999	3	1	2	6	4	29
$100,000 - $119,999	3	9	7	19	14	48
$120,000 - $139,999	7	16	8	31	15	99
$140,000 - $159,999	6	11	30	47	24	157
$160,000 - $179,999	11	22	29	62	25	231
$180,000 - $199,999	7	35	29	71	12	189
$200,000 - $219,999	4	34	38	76	8	175
$220,000 - $239,999	1	23	41	65	5	176
$240,000 - $259,999	1	18	29	48	9	131
$260,000 - $279,999	2	12	32	46	1	144
$280,000 - $299,999	2	10	19	31	2	99
$300,000 - $349,999	0	20	58	78	5	159
$350,000 - $399,999	0	8	44	52	1	121
$400,000 - $449,999	0	4	19	23	1	63
$450,000 - $499,999	0	0	12	12	0	62
$500,000 - $749,999	1	2	31	34	0	116
$750,000 or Over	0	0	8	8	0	99
Total Units	48	226	436	710	129	2,112
Average Price	$179,315	$223,802	$299,656	$267,375	$174,456	$310,578
Dollar Volume	$8,607,130	$50,579,335	$130,650,076	$189,836,541	$22,504,939	$655,941,783
*Figures in the "New Listings" column are based upon the listing priceof each property. All other data is based upon property's selling price.

Days on Market 1 - 30 261 31 - 60 153 61 - 90 113 91 - 120 87 121 or Over 208 Average 81 Days on Market is calculated by counting the days between the Listing Date and the Contract Date (the date the home goes under contract).

Financing Type Cash 62 Conventional 312 FHA 423 Lease Option 1 Other 18 Selling Financing 9 Utah Housing 1 VA 13

This information is deemed to be reliable, however WFRMLS does not guarantee accuracy.
This report generator ©1999 Wasatch Front Regional MLS.

Housing Inventory

Utah State government enacted the Home Run program in March, which offers $6000 to buyers of newly constructed homes, in an attempt to draw down the inventory. How's that working out?

According to Jack Healy of the NY Times, nationwide sales are up but inventory is up even more:

The National Association of Realtors reported that the inventory of unsold houses, townhouses and condominiums rose to 3.97 million in April, the highest level since November. At the current rate of sales, it would take 10.2 months to exhaust those unsold properties.

The Deseret News has nothing on the NAR report. Lesley Mitchell of the Salt Lake Tribune reports that Utah home prices are depreciating, but has nothing on inventory.

Unfortunately the Salt Lake Board's statistical reports don't show inventory numbers either. But the monthly report* for April shows 839 units sold, with 2,112 new units listed. I think it's safe to assume that Home Run has struck out, and that if the State Legislature really wants to draw down inventory, they need to expand the program to include existing homes, as a way to draw additional buyers into the market.

(* I'm not sure that link will continue to work. I'll see if I can post a copy of the document.)

(UPDATE 6/15: Yup, the April report got replaced with the May report. It'd be nice if the Salt Lake Board would post archived copies of the report.)

Housing Investment

Brett Arends has an interesting article in the WSJ on long-term home values:

Since 1987, when the Case-Shiller index of 10 major cities begins, it's risen from an index value of 63 to 151. Annual return: Just 4.1% a year. During that period, according to the Bureau of Labor Statistics, consumer prices rose by 3% a year. Net result: Home prices produced a real return of just 1.15% a year over inflation over that time.

I use 4% to do my personal long-term financial planning. I didn't have any specific reason for that number, the local newspaper suggested the ROI had been 6% for my area and I wanted to be conservative. Maybe I wasn't conservative enough.

Housing Starts Fall Again

Martin Crutsinger of AP reports:

A modest rebound in single-family home construction in April raised hopes Tuesday that the three-year slide in housing could be bottoming. But with the supply of unsold homes bulging, foreclosures rising and prices falling, no broad recovery is expected until next spring at the earliest.

You know, it's funny: we saw articles yesterday (Bloomberg) reporting that Q1 housing starts would rise, and this would provide further evidence the recession has bottomed out. But today's crop of articles make little mention of recession.

Nor should they. This little episode shows two areas where reporters need to do a better job:
1. Stop giving so much emphasis to predictions, especially in a volatile climate like the current financial crisis and recession.
2. Separate fact (housing starts gained/fell) from analysis (the economy has therefore recovered/bottomed out/worsened).

UPDATE: Lucia Mutikani of Reuters reports (emphasis mine):

New U.S. housing starts and permits dropped to record lows in April, while retail sales fell last week, according to reports on Tuesday that tempered optimism the nation's recession was drawing to a close.

Here's how she led yesterday's article, predicting good housing start news:

U.S. homebuilder sentiment jumped to its highest level in eight months in May, a private survey showed on Monday, supporting views that the three-year housing slump might be close to an end.

So Monday she thinks the recession will end soon, based on a prediction of increased housing starts. The next day, the prediction turns out (somewhat) inaccurate, and...she tempers her optimism.

Check out this graf from today's article, near the middle:

Analysts said that while the decline in starts suggests the recession has yet to run its course, it should help the housing market work through a huge stock of unsold existing homes and lay the foundation for a recovery from a three-year slump.

"This is essentially a good thing. It means supply will eventually come back in line with demand. Home builders have adopted an appropriate risk aversion stance," said Joseph Brusuelas, an economist at Moody's Economy.com in West Chester, Pennsylvania.

Why didn't she report this yesterday? As long as there's a "huge stock of unsold existing homes", who in their right mind thinks housing starts are going to significantly improve?

Also missing from today's or yesterday's article is any acknowledgment of the impending wave of foreclosures due to hit the market this month or next.