By James Wood
Director of the University of Utah’s Bureau of Economic and Business Research
Home Sales to Rise 15% in 2012
In 2012, higher levels of real estate sales will be supported by favorable interest rates and housing prices. In addition the Utah labor market is expected to grow by over 30,000 jobs and all sectors of the economy will expand. These conditions will lead to an improvement in home buyer confidence, which should stimulate housing demand. Over the last three years pent-up demand has been building as the weak job market has caused households to double-up, postpone marriage and moving. With improved economic conditions some of this pent-up demand will be released in 2012 pushing sales of single family homes up by roughly 15 percent to 10,500 units. Total residential sales, including condominiums, town homes and twin homes, will also increase by about 15 percent to 12,500 units.
Home Prices to Decrease 3% to 5% in 2012
Prices will continue to face downward pressure from REO and short sales. As 2011 ended there was no sign of improvement as fourth quarter prices declined by more than 10 percent. This weakness will linger through the first two quarters of 2012, but in the second half of the year prices should stabilize. The median sales price for a single-family home in Salt Lake County will likely drift down another 3-5 percent in 2012.
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