In addition, inflation and the looming specter of a recession are also taking a toll on Utah residents buying power. If you are looking to purchase your primary residence in todays market, then yes, the time to buy is today! While that remains to be seen, whats clear is that demographic tailwinds will keep the demand for housing robust this decade. Moodys Analytics expects a peak-to-trough U.S. home price decline of 10% or a 15% to 20% decline if a recession hits. A high or growing percentage of homes selling above list. The top 5 states homebuyers searched to move to were Florida, Texas, Tennessee, Arizona, and South Carolina while California, New York, District Of Columbia, Illinois, and Massachusetts were the top 5 states homebuyers searched to move from. After the next seven months, the median price fell by 14% to $485,829, erasing month-over-month percent increases until finally turning negative 2.1% in December, Wood wrote in his report. Realtor.com anticipates Salt Lake City metro home-price growth will be at 8.5% and home-sales growth at 15.2% in 2022. This, combined with higher mortgage rates, likely impacted sales in the fourth quarter. We go back to the 70s, for example, Eskic said. In 2021 the average interest rate was 2.96%, the lowest interest rate that FreddieMac measured since 1971. As of November 2022, four consecutive 75 bps increases brought mortgage rates over 7%, reaching their highest level since April 2008 and standing over twice higher as the same time last year. They climbed up so high so fast. These two organizations along with Freddie Mac and the National Association of Realtors predict that rates will steadily rise throughout 2022. But housing costs werent nearly as high back then, Eskic interjected. However, like we saw during the pandemic housing frenzy, that could all vary depending on the region. Earlier in 2021, Utah was considered as one of the hottest markets in the country, second only to Idaho. By Sarah Burns of The Salt Lake Local Real Estate Group, October 21, 2021 Utah State #2 in Housing Price Increases Utah's equity gains sat at 28.3% between 2020 and 2021, making Utah #2 in housing . Although predicting the future is always an exercise of caution, it is unlikely that the Utah housing market will collapse in 2023. In 2022, that was Joseph Brancas reality, along with plenty of other Utahns who wanted to join the mad dash to homeownership, but ultimately ended up walking away. The best way to describe it, he said, is an abrupt contraction thats had a dramatic effect on all aspects of the market, but especially on homebuilding, which he and Eskic worry will exacerbate Utahs housing shortage long term. This dataset excludes all rentals data. Historical Utah real estate data and trends are included below the latest update. At an annual rate of 2.6%, this was the slowest pace of growth since the state started recovering jobs post-COVID. While Eskic said he agrees with Wood about Utahs strong job market, but were operating in a different environment because of the rates and prices.. Home > Blog > Market News & Trends > Utah Housing Market- Trends and Predictions for 2022. For renters, these relentless price increases mean the path to ownership has narrowed even further. In the final quarter of 2022, 5,145 homes sold in the areas covered by this report. Utah house prices are significantly higher than the national average, and local salaries are not keeping up with the price growth and inflation. When he first started looking in November 2021 and into early 2022, Salt Lake Countys median single-family home price had hit $580,000, up 24% from a year earlier, according to the Salt Lake Board of Realtors. Looking ahead to 2023 and what it will bring to the housing market, two of Utahs leading housing experts are respectfully disagreeing with each other. Sign In. At the same time, the number of homes sold fell 34.7% and the number of homes for sale rose 81.9%. Theres going to be a terrible consolidation, he said, though he added he believes ultimately itll be good for the industry., In 2020 and 2021, when Congress was writing COVID-19 stimulus checks, Kelman said real estate diversified in an interesting way because those stimulus checks allowed people to experiment with real estate.. So unless we have a real serious recession, I think prices have some support given our economy., Wood also said even if home prices dropped 10%, they wouldnt set off a wave of foreclosures, unlike what happened in 2008, which just pulled prices down. The home was 2,500 square feet, four bedrooms, two and a half bathrooms, sat on a quarter acre lot, and they lived well within their means on a $1,000 a month mortgage payment. A year from now whoevers right has to shave their beard off.. The median days on the market was 70 days, up 47 year over year., The direction and pace at which home prices are changing are indicators of the strength of the housing market andwhether homes are becoming more or less affordable. Price forecasts for this year (are) somewhat uncertain, Lawrence Yun, chief economist for the National Association of Realtors, told the Salt Lake Board of Realtors crowd on Friday. Each year, the Sal. Gone are the days of brutal competition. Homes that sold above list price likely received multiple offers. Thats a good thing, because they were overpriced anyway, right? Perry said. Wood interjected, saying hes got to defend the Fed. Heres why, 2021: The year of the shocking home price, Utah made a dent on its housing shortage in 2021 but is still 31,000 units short, Buying a house? In its December 2022 monthly report, Realtor.com said its monthly housing data showed a housing market thats continuing to cool, with the number of homes for sale up by 54.7% compared to the same time last year. Buyers finally have market power. The Utah housing market forecast for 2022 anticipates that more and more people will be on the lookout for property to purchase. Colorado Data On average, homes in Cache County sell after 57 days on the market compared to 12 days last year. That is, after a summer of twist and turns, when prices peaked, interest rates went sky high, buyers were shocked out of the market, and sellers were saying, Wait, how come were not selling the home in two days? The question is, how far will that correction run and what will it mean for home prices in 2023? Half a million people from one state alone. Sales fell across the board compared to both the fourth quarter of 2021 and the third quarter of 2022. Short-term correction followed by continued growth and price increases. That was also a time when the national economy and Utah faced a struggling job market, Wood noted. Focus on the unbelievable increase you have gained over the past 10, 5, or even 2 years! Utah Housing Market at a Glance September 2022 Even this far into 2022 with the mortgage rate hikes, Utah remains one of the hottest markets. Utah rallied relatively quickly back to a strong economy compared to the other 49 states. With their buying power significantly diminished, house hunters find themselves priced out of the market or may consider postponing their home-buying plans until interest rates return to a more affordable level. I dont think thats happened yet.. Branca said hes struck by how wild todays home buying reality is. In January 2023, 17.5% of homes in Utah sold below list price, down 27.8 points year. The music stopped. Their goal is mainly to make a profit from investing in real estate but each of them has different approaches and strategies to achieve their goals. It just seems so odd to be in such a comfortable position and not have that as a practical option. The Utah housing market is following many of the same patterns observed nationwide. price indicates that the housing market is competitive and bidding wars are becoming more common. Over the next 12 to 18 months, Eskic said he expects homebuilders to offer big discounts. Not necessarily dramatic price drops, but more buyer incentives and rate buydowns, perhaps offers to finish basements. Then everything changed. Home prices in Utah were down 3.0% year-over-year in January. The ones who are truly making money in real estate in Utah are the investors. Hes predicting Utah home prices will drop 9% year over year in 2023. They can step back and wait for the dust to settle., As a result, Wood predicted price declines that have been tumbling since May will stabilize by the third quarter of 2023, and the annual median sales price for 2023 will likely be within a few percentage points one way or another of 2022., Worst case scenario, Wood added, prices down about 5%; best case scenario, prices equal to 2022.. Joining Good Morning Utah to share what to expect for Utah's housing market for 2022 is Ryan Kirkham with Summit Sotheby's and Utah realestate.com. The states unemployment rate in November was 2.2%. The average sale price in the fourth quarter rose a modest .6% from the fourth quarter of 2021 to $604,105. 28.7% of homes sold above the asking price, reaching a median sale price of $525,000, which represents a 7.8% increase in the past year. A home is listed for sale in West Jordan on Wednesday, Dec. 21, 2022. However, because of the stiff competition, Utahns who are looking to buy property should prepare themselves not just financially and physically but also mentally. How the pandemic housing frenzy which drove housing prices up to unimaginable levels in 2021 and into early 2022, especially in Western states like Idaho and Utah came to a grinding halt mid year, and the market crashed down to reality. For this reason, despite the high median property price, investors in rental properties are most likely to enjoy very good returns. Do not sell or share my personal information. of $518,200. For further information about the housing market in your area, please dont hesitate to contact your Windermere Real Estate agent. Why is it taking two weeks, a month, six weeks?. According to Realtor.com data, the current median days listed in Utah is 52, the highest since the onset of the pandemic, but still a ways away from pre-pandemic figures. Average income: 74197. If you ask Perry, they have a silver lining. How is the real estate market in Utah? Utah home prices remain significantly higher than the national average. A low or shrinking percentage of homes selling above list price suggests that the market is becoming less competitive. Wallethub found Utah is the. After a long, over two-year frenzy, Perry said buyers had more breathing room to negotiate prices and complete their due diligence. Agents receive this question at least 10 to 15 times per week. But now, those days of wild buyer demand and a frenzy of seller activity is over, and real estate agents outnumber active listings. They say it will pose challenges, especially for homebuilders, but also rebalance a market thats priced some two-thirds of Utahns out of affording the median priced home. Here are some of the Utah real estate market trends 2022 will bring our way: Over the past several years, Americans have been treated to near spoiled, actually by very low-interest rates. Will it pop or deflate?, disagree over how much home prices will decline, Why two housing experts disagree on how much Utah home prices will drop in 2023, Housing market is correcting but Utahs affordability crisis isnt going away. These numbers are nothing to worry about, as they indicate a return to a more balanced housing market in Utah. 2022. (Now) its resetting, its balancing, its coming down.. Love hiking, biking, or camping? With the rise of interest rates, a significant economic shift is occurring and we will likely see Utah home sales temper buyer demand. Predictions include price drops, terrible consolidation, but better buyer balance, 2022 was a roller coaster year for the housing market, growing number of experts and firms are predicting U.S. home prices will fall, nations median home price ballooned by over 41%, The great reset of 2022: The year the Fed had no mercy on the housing market, U.S. navigating pandemic housing bubble, Fed chairman says. Price growth rates, especially in 2021, were nothing short of astounding. When you look around at those who are not in as comfortable of a position, well, what options do they have at all?. Copyright 2023 Deseret News Publishing Company. A low or shrinking percentage of homes selling above list price suggests that the market is becoming less competitive.. Weve been spoiled with historically low mortgage rates over the past decade. While at the beginning of the year, homebuyers could purchase a home at an interest rate of around 3%, currently borrowers are looking at more than 7%. Historically, brief and prolonged price declines in Utah went hand in hand with joblessness and recessions, both of which dont seem likely in the next two to three years. The counties covered by this report added more than 35,000 new jobs over the past year, which was also a growth rate of 2.6%. The latest housing data shows the median priced home in Utah's most populated county increased to $550,000 in the third quarter of 2021. Prices, though theyre on a downward trajectory, are still up year over year by single-digit percentages at least for now. It would slow, but it wouldnt be stopped like it is now.. Nationally, a growing number of experts and firms are predicting U.S. home prices will fall, some expecting slight, single-digit drops, while others expect prices to fall by double digits, perhaps even over 20%. High-cost areas like San Francisco, he said, will see a 15% price decline. As mortgage rates are at record highs in 20 years by 7.08%. The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. Listing activity fell 8.3% from the third quarter, but that wasnt surprising given seasonal factors. Others argue the apartments meet the growing demand for high-end housing in Salt Lake City, it's the latest development in what's been an expensive year to find and afford a home. However, because of the stiff competition, Utahns who are looking to buy property should prepare themselves not just financially and physically but also mentally. READ REDFIN'S FAIR HOUSING POLICY. In January 2023, there were 8,551 homes for sale in Utah, up 81.9% year over year. Oakland Real Estate Market: To Invest or Not to Invest? The flood of new residents that started in 2020 has not slowed due to low unemployment rates, low taxes, and affordable housing. between 2021-12-31 and 2022-12-31. Compass announced a third round of layoffs on Thursday, according to The Real Deal. Inventory levels have skyrocketed, with the average number of homes on the market up a remarkable 248% from the same period in 2021. 27.7% of homes sold above the asking price. Utah continues to be a light upon a hill to others throughout the States and even worldwide. In 2022, Redfin itself went through two rounds of layoffs. All Rights Reserved, Why two housing experts disagree on how much Utah home prices will drop in 2023, priced some two-thirds of Utahns out of affording the median priced home, Housing market is correcting but Utahs affordability crisis isnt going away. Home prices skyrocket amid early pandemic months due to bidding wars and a shortage of active listings. The bull market that has been in place for quite some time appears to have lost its momentum. By Eskics calculations, 79% of Utah households couldnt afford the states median priced home as of the third quarter of 2022. Salt Lake City, Utah Just like Utah peaches Forecast home price change by May 2022: 23.5% Local professional: Dave Robison, broker and owner of goBE Realty, and former president of Utah Association of Realtors and Salt Lake Board of Realtors What makes the Salt Lake City market poised for growth? Contact Us, Real Estate Blog Utah faces a shortage of 31,000 homes. The latest migration analysis is based on a sample of about two Since the pandemic began, housing prices in the Beehive State have skyrocketed to the point that more than 50% of households can no longer afford to buy median-priced properties in the state. Its going to be tough for home builders, Wood said. The slate of speakers all sought to help bring clarity to a market that they said has largely been fraught with volatility and uncertainty as mortgage rates, some days hovering around 7%, have squeezed buyers and have brought a rapid end to what had been over two years of a blazing hot market. But what about the increase in interest rates? Homes in Big Willow Creek Estates are under construction in Draper on Friday, Nov. 11, 2022. Therefore, the impact of increasing interest rates has been felt more in the state than in other parts of the country. Comparatively speaking, I make more money than my parents combined income at my age and still cant afford to buy something at a significantly lower quality than what they were able to purchase at that same age, Branca said. AirDNA vs. Mashvisor: Which One Is the Better Source of Airbnb Data? The Typical U.S. Home Changes Hands Every 12 Years, Down From 2020 Peak, Market Recovery Hampered by High Housing Costs, Low Supply in January, Housing Market Update: Sale Prices Flatten, Demand for Mortgages Falls as Rates Climb, Housing Market Predictions 2023: A Post-Pandemic Sales Slump Will Push Home Prices Down For the First Time in a Decade, Redfin Predicts a More Balanced Housing Market in 2022, Housing-Market Mayhem: U.S. Home Sales Likely to Hit Record High of $2.5 Trillion In 2021, REDFIN IS COMMITTED TO AND ABIDES BY THE FAIR HOUSING ACT AND EQUAL OPPORTUNITY ACT. How to Find Multi Family Homes for Sale in 2020. Here are their year-over-year predictions for the Salt Lake City housing market in 2022: Forecasted home sales change: +15.2%. Even this far into 2022 with the mortgage rate hikes, Utah remains one of the hottest markets. Check! Should You Invest in the Phoenix Housing Market in 2020? So its really tough to say, but I think its going to be minimal negative, or negative positive, Yun said. He has a background in sales and marketing and construction as a Project Superintendent. In addition, Utahs median listing price is 36% more than homes across the United States. Dont wait. The average rate for 2022, based on the forecasts of seven organization . Wood, who has studied Utah's housing market for decades, forecasts that real estate sales will remain steady in 2022 while home prices will rise 10%-12%. So players should expect to see both challenges and opportunities in 2022. Despite the expensive prices, the inventory cannot keep up with the growth pace. Is the Utah housing market going to crash in 2023? The average annual profit of property investment was: 10.098% in 2018; . One will often find him drawing, doing toy photography, or dabbling in other geeky stuff when he's not helping investors make smarter decisions. 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