HOME PRICES ON THE RISE!!

Median home price in Salt Lake rises for first time in 5 years

Real estate » Seller’s market emerges amid low inventories.

By Tom Harvey

| The Salt Lake Tribune

First Published Jul 26 2012 10:36 am • Updated 3 hours ago

The Salt Lake-area single-family home market has suddenly shifted sellers’ way. But at the same time buyers are finding mortgage interest rates at record lows — meaning that selling prices are rising for the first time since the 2007 collapse of the housing bubble.

The single-family median price was $214,900 in the second quarter, up nearly 6 percent from the same period in 2011, the Salt Lake Board of Realtors said Thursday in releasing its quarterly statistics.

The last time prices increased in Salt Lake County was in the second quarter of 2007, when the median reached a peak of $256,000.

Donna Pozzuoli, president of the Realtors group, said inventories of foreclosures have fallen, short sales (in which a lender agrees to accept a price worth less than the outstanding loan) are proceeding more quickly and interest rates are very low.

That means "we’re getting multiple offers because we’ve got sellers ready to listen for a change and buyers who are feeling confident enough to proceed with the low interest rates," she said. "I think that’s what’s really driving it."

Realtors said they are having to educate potential buyers about the change in the market from one in which they had a greater choice of houses and could make offers below the seller’s asking price.

On Thursday, mortgage buyer Freddie Mac said the average rate for 30-year fixed mortgages was down to 3.5 percent, the lowest over the past 60 years. The average on the 15-year fixed mortgage also was at a record low, 2.8 percent.

Kimberlee Casaday, the president of residential lending for Zions Bank, said the bank has seen an increase of about 30 percent in loan applications this year over last. A variety of loan products, low interest rates and affordable prices that are back to levels of several year ago are driving up consumer confidence, she said.

In Davis County, the median sales prices rose 3.42 percent from the second quarter of 2011 to the same period this year, to $196,500. In Utah County, the increase was less sharp, from $191,900 in 2011 to $195,000, or a 1.62 percent increase.