MAY HOUSING WATCH Home Sales in May Reflect Cyclical Low Point Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass oneyear-ago figures in the second half of the year.” Lawrence Yun, NAR chief economist. Fellow at the University of Utah’s Kem C. Gardner Policy Institute.
Home sales were down a third consecutive month in Salt Lake County year over year due to the Covid-19 economic quarantines and business shutdowns. In May, there were 1,418 sales (all housing types) in Salt Lake County, a 25 percent drop compared to sales in May 2019. In April, home sales fell 27 percent (revised). In March, sales fell 1 percent. In neighboring Davis County, home sales declined 13 percent in May year over year. Utah’s economy is expected to recover in the second half of 2020, with rising demand for homes, according to James Wood, economist and the Ivory-Boyer Senior
Nationally, existing-home sales fell in May, marking a three-month decline in sales, according to the National Association of Realtors®. Overall, U.S. home sales were down 27 percent from a year ago (5.33 million in May 2019). “Sales completed in May reflect contract signings in March and April – during the strictest times of the pandemic lockdown and hence the cyclical low point,” said Lawrence Yun, NAR’s chief economist. “Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year.” The median price of homes sold in May in Salt Lake County increased to $362,500, up 4 percent from May 2019. The U.S. median existing-home price for all housing types in May was $284,600, up 2 percent from May 2019 ($278,200), as prices increased in every region. May’s national price increase marks 99 straight months of year-over-year gains. “New home construction needs to robustly ramp up in order to meet rising housing demand,” Yun said. “Otherwise, home prices will rise too fast and hinder first-time buyers, even at a time of record-low mortgage rates.” Properties typically remained on the market for 26 days in May, seasonally down from 27 days in April, but equal to 26 days in May 2019. Fifty-eight percent of homes sold in May 2020 were on the market for less than a month. Across the country, first-time buyers were responsible for 34 percent of sales in May, down from 36 percent in April 2020 and up from 32 percent in May 2019. Individual investors or second-home buyers, who account for many cash sales, purchased 14 percent of homes in May, up from 10 percent in April 2020 and from 13 percent in May 2019. All-cash sales accounted for 17 percent of transactions in May, up from 15 percent in April 2020 and down from 19 percent in May 2019. Distressed sales – foreclosures and short sales – represented 3 percent of sales in May, about even with April but up from 2 percent in May 2019.
36 | Salt Lake Realtor ® | July 2020
