Utah County Real Estate

Recent Evolution of Utah County Real Estate

Driven by good in-migration and the addition of more than three hundred computer-related businesses in Utah County, the 1990's began with a housing inventory shortage. I remember trying to get many buyers' loans through when the appraisers wanted sold comparables to justify the rapidly increasing prices, but there were none. Prices were increasing too rapidly for the appraisers' comfort. The rest of the 90's saw a steady price climb as inventories came closer to meeting demands.

In 2000, house inventory started to exceed demand, and we saw the price climb flatten out until about 2005. During that time the two US Coasts and particularly neighboring states like Nevada, California, and Arizona were seeing run-away housing prices due to unrealistic lending policies. Those states started to back away from their inflated prices in 2005 and 2006. I was telling my wealthier out-of-state friends to buy in Utah at that time because we were way undervalued. What I expected happened. From late '05 to mid '07 we had a significant price spike.

By mid-2007 the nation pretty much admitted the real estate bubble had burst, and people everywhere recognized prices had to adjust downward. The "inflated values state" had to openly admit what had quietly been happening for a couple of years. Prices were falling. In spite of the spike Utah took in '05 to '07, our prices didn not need quite the adjustment that many of our neighbors needed. We have seen a price decline over the last 2 years. The average price of a single family home reached $305,000 in June of 2007. In June of 2009 the average price was $228,000, but the rate of decline flattened out in March.

On the more positive side of things, sales are up this year over last year. In June/July of '08 there were 839 MLS closings in Utah County, but in '09 there were 1053 in the same 2 months. Increasing volume usually means increasing prices, but that has no happened yet. Some "short sales" are well below replacement costs. As our current inventory is depleted, new construction cost will force price increases, assuming current sales activity continues.