I expect the region will continue to see downward pressure on home prices, but a major correction is unlikely. Starting in March 2022, the Federal Reserve Bank initiated an aggressive interest rate hike policy as a means to fight back against inflation. The median days on the market was 70 days, up 47 year over year. After a long, over two-year frenzy, Perry said buyers had more breathing room to negotiate prices and complete their due diligence. Historical Utah real estate data and trends are included below the latest update. Even during the 2008 Recession, Utah felt the pain but, comparatively speaking, suffered a less deep economic hit. Theycan also indicate whether homes are lingering on the market or being sold faster than sellers are listing them. Privacy . In addition, people are moving to Utah because of the family-friendly environment, high-ranking school systems, and endless outdoor activities available along with the National parks. CA License #01950016. REDFIN IS COMMITTED TO AND ABIDES BY THE FAIR HOUSING ACT AND EQUAL OPPORTUNITY ACT. The median price of a home in the United States is currently $518,200. Utah will see minor year-over-year price declines in the first and second quarter of 2023, but prices will begin to stabilize by the third and fourth quarter, he said. Although predicting the future is always an exercise of caution, it is unlikely that the Utah housing market will collapse in 2023. A low or shrinking percentage of homes selling above list price suggests that the market is becoming less competitive. Some investors flip houses, others wholesale them. Over the past 12 months, the state added 43,300 jobs. Mortgage rates are primarily based on the prices and yields of bonds, and while bonds take cues from several places, they are always impacted by inflation and the economy at large. In Utah, housing prices have begun to decline, down from their peak in May, when the median sales price of Salt Lake County homes was $565,600. Affirming this projection, Wood asserts . How to Find Multi Family Homes for Sale in 2020. About Us The average annual profit of property investment was: 10.098% in 2018; . This was down 45% compared to the same period the previous year and down 27.8% compared to 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? The migration during the Pandemic contributed to the increased demand in the Utah housing market and an increase in housing prices. A bubble is highly unlikely at this point in time because a bubble is defined as a prolonged period of actual price decline, not moderation or deceleration. Therefore, although Utah home prices may decline in the coming months, the Utah housing market should remain relatively strong and correct itself for more sustainable growth. The party was over. 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.. A good indication of the markets strength and inventory is the average number of days properties stay listed. The jarring pace of Utah's housing market and its impact on Utahns "is why we think these investments are so important," Cox said. But by the end of the year, well stabilize and well be flat, Wood said. Branca said hes struck by how wild todays home buying reality is. When he thinks about what his parents life was like in the same window of time in their lives, he said it blows his mind. The time to purchase your primary residence is today and has almost always been today. The beautiful Rocky Mountains are our backyard, giving us an unlimited opportunity for outdoor experiences of any kind! However, despite the increased inventory in the past months, there were only three months of housing supply available in September 2022, still a long shot away from the five to six months required for a balanced market. But what about the increase in interest rates? The surge in home prices across the country resulted in many thinking homes were sold for more than theyre worth. As a result, average days on market have increased, and sellers are becoming more open to negotiation. There were only 31.8% of homes that had price drops, up from 10.0% of homes in January last year. Such a decline is extremely unlikely in Utah in 2023 and 2024, Wood wrote. Dont wait. Utahs housing market is starting to feel the rising interest rates, resulting in plateaued price growth. Yeah, thats a valid point, Wood replied, drawing laughs from the crowd. Login. With the rise of interest rates, a significant economic shift is occurring and we will likely see Utah home sales temper buyer demand. Forecast for 2022 High prices, likely interest rates increases, listing . There are currently 8,551 residential homes for sale in the United States. The demand is causing local buyers to cut corners by foregoing home inspections and appraisal contingencies just to beat the competition. Over 2022, the Federal Reserve has been battling sky-rocking inflation with their number one weapon, interest rates. We hope that by publishing this Utah housing market forecast 2022 edition, we have shed some light and provided insight into some of the questions and concerns prospective investors and buyers may have. Here are Utahs metropolitan areas with the hottest housing markets for volume. Now, we still have a very strong job market, and we expect the growth rate is going to come down a little bit in 2023 in jobs, but I still think its going to be a strong market, Wood said. Home prices in Utah were down 3.0% year-over-year in January. If they hadnt been so aggressive in 2020 and 2021, wed be talking about unemployment now rather than inflation. He also noted it was really Congress that juiced the economy with so much one-time stimulus money, not the Fed. Hes predicting Utahs home prices will only experience minor blips that will stabilize into the green after only a few quarters. At an annual rate of 2.6%, this was the slowest pace of growth since the state started recovering jobs post-COVID. Sales fell across the board compared to both the fourth quarter of 2021 and the third quarter of 2022. Therefore, experts expect that Utah home prices will slow down their staggering growth and may decline in some areas. 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. Branca said hes grateful that hes employed, has a handsome income, and while hes sad that the market was so difficult to navigate for his situation, it felt much worse to realize just how many other Utahns the market has priced out. As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. The cops came and busted everyone.. After prices peaked in May, Salt Lake Countys median single family home price hit $650,000. 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. READ REDFIN'S, Do not sell or share my personal information. The strong demand and limited supply of home inventory will push against price declines and keep home prices relatively stable over time. After a big boom over the past two years, there will essentially be no change nationally in home prices in 2023, said the National Association of Realtors chief economist Lawrence Yun. In January 2023, 17.5% of homes in Utah sold below list price, down 27.8 points year. From peak-to-trough, with the peak being May 2022, he expects prices to decline by a percentage somewhere in the mid to low teens, depending on what happens with interest rates over coming months. Utah rallied relatively quickly back to a strong economy compared to the other 49 states. 36 days on the market. 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. But Wood is more bullish than Eskic. All of this, of course, depends on how local markets fair. Like many other housing markets in the United States, the Utah housing market follows seasonal trends. The flood of new residents that started in 2020 has not slowed due to low unemployment rates, low taxes, and affordable housing. It is likely that home buyers are waiting for asking prices to fall further and hoping that mortgage rates do the same. FastExpert partner and Utah real estate agent, Preston Hicks, shares his professional perspective on the Utah housing market. However, prices are still significantly higher and homes are selling faster compared to 2019 pre-pandemic levels, noted Daniel Hale, Realtor.coms chief economist. Even before COVID swept across the world, the Utah housing market was already out of reach for 63% of renter households. Homes in Big Willow Creek Estates are under construction in Draper on Friday, Nov. 11, 2022. Branca, 30, knew he wanted to buy somewhere in Salt Lake County so hed have a reasonable commute to work. It seemed like the housing market was running away from buyers, who struggled to get offers accepted due to shockingly low inventory levels. Branca said if someone like him is struggling to buy, he cant imagine what its like for people living on lower incomes. We go back to the 70s, for example, Eskic said. A realty sign at a property in the Salt Lake City on Friday, Jan. 6, 2023. The competition has been made even tougher since the pandemic started, with people from California and Colorado making their exodus to the Beehive State in search of more affordable housing along with a good educational system and a lower cost of living. 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%. Even with todays rising mortgage rates, it will continue to be the time to buy a house in Utah. We always have deceleration in the rate of increases as the cycle plays itself out. How is the real estate market in Utah? One of the most common myths going around about the Utah housing market forecast for 2022 and its present market is that it is just a bubble waiting to burst. Average income: 74197. In many respects it will be an uphill journey given. However, there is no denying that the rapid increase in interest rates, with more likely in the work before inflation reaches a targeted rate of 2%, has significantly affected it. All Rights Reserved, What will 2023 bring to the housing market? 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. With uncertainty in the economy, predictions for Utahs housing market vary greatly. 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. Despite the expensive prices, the inventory cannot keep up with the growth pace. The client gave a slightly crooked smile to suggest that I am not only biased but also a Realtor who makes a living by selling properties in Utah. By comparison, interest rates 20 years ago averaged between 6%-7%, and 1981 experienced interest rates of 16%. Why is it taking two weeks, a month, six weeks?. While the market in Utah is feeling a correction similar to the rest of the Nation, it weathered the 2008 recession relatively well and is expected to maintain a strong housing market. Do not sell or share my personal information. The 2021 Utah housing market will be long remembered for its record-breaking price increases. Sign up now for a free 7-day trial and get 15% off on your subscription. Historically speaking, real estate only becomes more expensive over time. Then the rates hit and they were left holding the bag, Eskic said. 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. These factors positioned Utah in the top spot on the Bankrate Housing Heat Index. The market was suddenly plunged into ice cold water when the Federal Reserves war with record levels of inflation sent mortgage rates skyward, and the mask that helped drive home prices so high suddenly lifted. In his report for Utah, Wood wrote its very unlikely that the recent price run-up represents a housing bubble, though he added, We dont know if a bubble exists until after it bursts. He cited Alan Greenspan, an economist and past chairman of the Federal Reserve, who defined a housing bubble as a prolonged period of housing price declines. He has a natural inclination to the arts and creatives. 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. However, they expect the market to enter a correction that will persist into 2023 thanks to the Federal Reserves aggressive rate hikes to combat inflation. Market time rose 22 days from the third quarter of 2022. The number of days on the market had also increased sharply at 39 median D.o.M., compared to 15 the previous year, further indicating that the days when properties were being snatched off the market as soon as they were listed are long gone. Eskic, however, is predicting Utah home prices will drop 9% year over year in 2023. 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. Nevertheless, at the time of the writing, the Utah housing market remains a sellers market due to the lack of inventory. Buyers finally have market power. The fi read more, Click here to browse our Real Estate Agent Directory and contact top-rated agents in your area! The average rate for 2022, based on the forecasts of seven organization . 2.1 months of housing inventory. Property prices still remain high. Site Map | FastExpert, inc. 2021. 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But now, those days of wild buyer demand and a frenzy of seller activity is over, and real estate agents outnumber active listings. Then everything changed. Median listing prices were 3.6% lower than in the third quarter, suggesting that higher financing costs may have created a price ceiling. Search for a realtor or service professional, Already have a FastExpert account? The direction and pace at which housing supply changes indicate whether the options for buyers are increasing or decreasing. Preston was born in Provo, Utah, and raised in Spanish Fork, Utah. Realtor.com anticipates Salt Lake City metro home-price growth will be at 8.5% and home-sales growth at 15.2% in 2022. Mashvisors Utah housing market forecast 2022 and pretty much all other real estate forecasts for the year have identified Salt Lake City metro area as the countrys hottest housing market-beating other burgeoning areas like Boise ID and Spokane WA. Are there enough homes for sale to meet buyer demand? It has been one of if not the most competitive markets in the US in 2021. 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. A home is listed for sale in West Jordan on Wednesday, Dec. 21, 2022. Browse through the largest marketplace of Real Estate professionals, We have an in-house team that will guide you through the process. It was the year that put homeownership far out of reach. Utahs housing experts disagree over how much home prices will decline, though they remain confident that 2023 will not bring a full blown, 2007-like crash, and that Utahs strong job economy will still largely insulate it from any negative impacts of a recession. This would place . Sales fell across the board compared to both the fourth quarter of 2021 and the third quarter of 2022. Nationwide, an increasing number of firms have downgraded their forecasts and predict U.S. home prices will continue to fall in 2023, Fortune has reported. Significantly higher inventory levels gave buyers a lot more options than they have become accustomed to. And to Branca, that meant home ownership became completely inaccessible.. For September of 2022 Utah saw the median sale price remain flat compared to August and is still up almost 6% from 2021. When you look around at those who are not in as comfortable of a position, well, what options do they have at all?. Hes predicting Utah home prices will drop 9% year over year in 2023. With the market starting to change, weve seen a decrease of 25.3% in sales in the Utah housing market, and 49% of homes had price drops. It would slow, but it wouldnt be stopped like it is now.. Therefore, the Utah housing market is to be expected to slow down. However, in the wake of the Feds aggressive monetary policy, the price growth is not sustainable. While home prices have decreased about 3% month over month, home prices are up nearly 9% year over year in August. It completely snowballed out of control., That $4,200 monthly payment would have been for a home on the very upper end of his budget, Branca said, and never one that I was actually considering, but certainly one that I should have been able to consider. Utah faces a shortage of 31,000 homes. Check! To ensure a good return on investment, we encourage real estate investors to perform their due diligence and seek out the help of local Utah real estate professionals. must have viewed at least 10 homes in a three month period. In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics. In addition, inflation and the looming specter of a recession are also taking a toll on Utah residents buying power. Find an experienced, trusted local real estate agent with FastExpert. Once the market rebounds, buyers can be in an even more powerful position when the market shifts back to a more lopsided sellers market. While home prices will only experience minor blips that will guide you through the largest of! The fi read more, Click here to browse our real estate only becomes expensive... Across the world, the Utah housing market remains a sellers market due shockingly! 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