Home sales in Tooele County for 2020 are lagging behind 2019, due to the lack of homes to sell not COVID-19, according to local real estate professionals.
The number of closed sales in Tooele County for the year as of the end of July 2020 was 837, which was 10.4% lower than at the same time in 2019, according to data from the Utah Association of Realtors.
While the number of closed sales were down, the median year-to-date sales price was up by 13.3% at $315,000, according to the same report.
“Although COVID-19 slowed things down initially, we are still selling homes,” said Stephanie Bothell, president of Tooele County Association of Realtors and a sales associate with Coldwell Banker. “And the demand for homes out numbers the supply.”
The supply of homes along the Wasatch Front is about 50,000 homes short, according to Bothell.
“There is a lot of pent up demand from people that put off buying a home earlier in the year,” she said.
New home sales came out of the gate in 2020 with a 45% growth in sales for January 2020 over the same month last year. February also showed growth with a 13% increase in home sales for 2020 over 2019.
But as the COVID-19 pandemic hit, sales started to drop. March down by 16%. April down by 26%. May down by 23%. Sales rallied in June with a 3% increase, but July sales dropped by 18%.
However, looking at the whole year so far, the July 2020 year-to-date closed sales of 837 is 3.8% above the 837 five-year average year-to-date closed sales for the end of July.
Chris Sloan, broker for Group1 Real Estate Tooele, agrees that it is lack of supply that is keeping sales down.
“It’s a lack of inventory,” he said. “This is the worst I have ever seen. I thought last year was bad; we’re down about 50% from last year.”
Builders can’t build fast enough, according to Sloan.
Sloan said there are plenty of people from Salt Lake Valley and other places that have discovered Tooele County’s lower home prices along with locals looking to move up to a larger home.
“COVID isn’t affecting sales,” he said. “There’s plenty of buyers out there. People are still employed and they still need or want to move.”
The shortage of supply along with an increase in building costs is behold the increase in home prices, according to Sloan.
“It’s supply and demand,” he said.
Sloan is concerned that the increase in home prices may price some families out of home ownership.
The rate of increase in home prices is beyond wage growth, according to Sloan.
A study reported by the National Association of Home Builders in January 2019 concluded that nationally a $1,000 increase in the median cost of a newly built home pushes nearly 130,000 buyers out of the market.
“Based on their incomes, these households would be able to qualify for a mortgage to purchase the home before the price increase, but not afterwards,” according to the NAHB.
Bothell agrees that the short supply is driving prices up.
“We have a demand for lower price homes in decent shape,” Bothell said.
Young people starting out need a home they can afford or an apartment they can rent at a price that allows them to save up to buy a home. Homeownership also provides stability for children in school as their parents won’t need to move around from rental to rental, according to Bothell.
“For a young person or couple starting out, a home helps then build with financial stability as it grows equity for them,” Bothell said.