Tribune article on 2008 home sales

Tough year yields fewer home sales, but only slightly lower prices
Downturn » Economists worry values will drop even more in '09

By Lesley Mitchell
The Salt Lake Tribune
Updated: 01/27/2009 05:21:37 PM MST

A total of 8,743 single-family homes changed hands in Salt Lake County last year, down more than 25 percent from 2007, a report released by the Salt Lake Board of Realtors shows.

Median selling prices in Utah's most populous county were off only 1.3 percent, to $244,831, but most economists predict larger drops in selling prices are coming this year as Utah's economy continues to deteriorate. The Realtor's report covers mostly existing homes.

"2008 was obviously a tough year," said Ryan Kirkham, president of the Salt Lake Board of Realtors.

Though Kirkham and others are optimistic about this year, economists say there are no strong signs pointing to a brighter 2009 -- even with historically low mortgage rates.

Home sales all along the Wasatch Front have been affected.

Sales in Davis County were off nearly 21 percent from 2007 to 2008, according to the report, while prices were off 2.2 percent, to $221,000. Sales were off nearly 20 percent in Utah County, with prices off just under 4 percent, to $230,000.

In Tooele County, sales were off nearly 35 percent, with prices down 3.6 percent, to $185,000. Weber County sales were off about 26 percent, while median selling prices in the county -- the lowest along the Wasatch Front -- actually increased nearly 3 percent, to $166,600.

Once a stellar outperformer amid the nation's economic downturn, Utah's economy is showing significant signs of deterioration, with job losses now the norm.

The Governor's Office is projecting unemployment will increase significantly this year. Job losses, once contained to home construction and related sectors, have expanded into other areas. Retail sales are expected to drop as more Utahns cope with job losses and pay cuts.

Economists say consumers have a reason to be fearful about buying a home and having the value of their property drop after they do so.

Economist Mark Zandi of Moody's Economy.com has stressed that prices in Salt Lake City are certain to decline more, through this year and into 2010.

Owners of higher-priced homes continue to feel the most pain. Wasatch Front Realtor Sheryl Hornok said the values of homes priced at $300,000 and under haven't declined as much as homes priced at more than $400,000. Many priced above $600,000 to $700,000 have had to be deeply discounted before they sold.