Home prices in Tooele County continued to climb in the second quarter of 2018, driven up largely by a shortage in supply, according to local real estate professionals.
The median sales price of a home in Tooele County during the second quarter was $264,000 compared to $215,700 for the same time period in 2017. That’s a 22.4 percent increase, according to data from the Wasatch Front Regional Multiple Listing Service.
“It’s a matter of supply and demand,” said Mindy Barnes, president of the Tooele County Association of Realtors and an agent with Equity Real Estate. “What inventory we have is selling really fast, allowing sellers to get their asking price.”
The median days on the market for a home in Tooele County during the second quarter of 2018 was eight days, the same as the second quarter 2017.
However, the short inventory of homes for sale has caused the number of homes sold to drop, according to Barnes.
The number of homes sold in Tooele County during the second quarter was 348. That’s down 20 homes from the 288 homes sold in the same time period of 2017, a 10.3 percent decrease.
“We can’t sell homes if we don’t have them to sell,” Barnes said. “If we had more homes, we would be selling them. It’s not the demand that is down, the demand is there.”
Although there are several residential projects underway in the county and cities within the county, builders are having a hard time keeping up with the demand for homes, according to Barnes.
“Part of the problem is contractors and having trouble finding sub-contractors,” Barnes said.
State economists have suggested that with the state’s low unemployment rate some employers have raised their wages to attract and keep employees. The increase in wages may be enticing some construction workers to leave the construction field and find jobs elsewhere.
In 2017, James Wood, senior fellow at the Kem C. Gardner Policy Institute at the University of Utah, said a decrease in Hispanic immigrants, which traditionally took up more jobs in construction than other immigrant groups, was contributing to a labor shortage in the construction field.
The short supply of homes isn’t just occurring in the county, according to Chris Sloan, broker with Group 1 Real Estate Tooele.
“The inventory shortage is statewide,” he said. “The state is several thousand upside down. Builders can’t seem to build homes fast enough to catch up with all the people that are moving in to our state.”
From 2011 to 2017 the number of households in Utah increased by 158,120 while the number of housing units in the state increased by 114,619, leaving a 43,501 gap between growth in households and growth in housing, according to a July 2018 blog post by Wood.
The immediate effect of the shortage has been a reduction in the vacancy rate for both rental and owner occupied homes, leaving fewer choices for renters and buyers, according to Wood.
Rather than increasing homeless households, the housing shortage has caused more households to double-up and share housing, a trend that gathered attention during the Great Recession and has continued to grow since then, according to Wood.
While home prices in Tooele County continue to climb, they still remain lower than prices in other counties along the Wasatch Front, according to Sloan.
In June 2018 the median sales price of a home in Salt Lake County was $327,800 compared to $263,000 in Tooele County. The statewide median home sales price for June 2018 was $270,000, ranging from $974,500 in Summit County to $70,000 in Emery County, according to a report from the Utah Association of Realtors.