In May, Utah Realtors put more than thirty‐two hundred properties under contract, compared to about twenty‐one hundred last year and about three thousand in 2009.
Closings on these homes typically occur one to two months after the property is placed under contact. Based on May’s signed contracts, June home sales are expected to be significantly higher than last year.
One reason this year’s pending sales are so high is because fewer contracts were signed last May because buyers had to be under contract by April 30 to qualify for the tax credit.
However, buyers were still allowed to finalize transactions after April 30, which artificially pushed up the number of closed sales. That means sales this May look lower than they otherwise would, down about twelve percent compared to 2010. Going forward, the comparisons should become more reflective of the market as the effect of the tax credit fades.
On a national level, the trend was similar. In May, pending home sales were up more than thirteen percent. This is the first time since April 2010 that U.S. contract activity was above year‐ago levels.
The National Association of Realtors said the improvement bodes well for home prices since the rise in contact signings implies inventory is being absorbed at a faster pace. The group is forecasting that the second half of the year will be stronger than the first and much stronger than the second half of 2010.
Like the U.S., Utah is also absorbing inventory. Along with the strong gain in pending sales, statewide inventory declined and is at its lowest point since 2007. At the end of May, there were around twenty‐ five thousand homes for sale in Utah, a fifteen percent decline. It would now take just over ten months to sell the entire inventory at the current pace.
The median price of homes sold statewide was down about five percent from last year, but the average price increased more than two percent, the first gain since November.
Uintah County continued to have some of the strongest sales. May sales rose nearly thirty‐seven percent compared to last year. The month’s supply of inventory is also favorable at about six months.
Other counties with double‐digit sales increases were Beaver, Carbon, Duchesne, Iron, Millard, Morgan, Rich, San Juan and Summit. Single‐digit increases were in Wasatch and Washington counties.