Price jump: turnaround ahead?
Home prices rose in the second quarter of 2012 for much of the country, trumpets this Associated Press article from last week in the Salt Lake Tribune. This comes a month after the Tribune reported that the number of building permits issued along the Wasatch Front has risen. The increase in the number of issued building permits was cited as evidence that the housing market could be recovering in Utah, and now the increase in the average price of sold homes is being cited as evidence that a modest recovery is already happening.
These two graphs, the first for Utah County and the second for Salt Lake County, place the sales numbers in the larger context of the last few years:
The increase in median sold price looks fairly sharp, especially compared the few other quarter-to-quarter rises over the past five years. Keeping in mind that home prices often rise between the first and second quarters as the moving season warms up, the increase still looks fairly substantial. Is the market starting to turn around?
It depends on what you mean by 'turn around,' and even with a very, very modest definition, nobody really knows. Job growth and consumer confidence are still unstable and have suffered significant setbacks since the beginning of the year. The increase in building permit numbers over the last few months, while encouraging, may be more the result of Utah's family growth rate than its economic growth rate. As home inventory has decreased and stayed low over the past few years, new home permits may be jumping to compensate. And while the positive activity is welcome, the home price increase over the last quarter puts us back where we were . . . in 2011. The reality is we're still at the bottom.
Given the amount and breadth of economic damage sustained by the U.S. and the rest of the world since the financial crisis, recovery isn't going to look like a return to more freewheeling days, it's going to be a struggle to deal with profound economic shifts by addressing (or not addressing) structural weaknesses in our larger economy. Willing the recovery to happen and then doing things the unsustainable way we've always done them isn't going to get us very far. The step we were allowed to take last week, toward sharing responsibility for baseline practices that benefit us all and cost us in ways they shouldn't when we leave them to our employers, is the kind of progress that can improve prospects for all of us, much more than any consumer confidence index or new outlet mall ever will.
Blog Archive2016-03-04 11:45:30
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