April 21, 2022

Even with sharp increases in mortgage rates, Utah home prices keep going up as properties continue to sell at a rapid pace.

In fact, the median price of Utah homes sold set a record in March, hitting a median of $525,000 for the first time. The median is 29% higher than it was at the same time last year, according to March data from the Utah Association of Realtors.

That equates to a price increase of $119,000 and marks the 120th consecutive month of statewide year-over-year price gains.

The county with the highest median price is Summit at $1,295,000 followed by Wasatch and Grand at $955,000 and $700,000 respectively. The most affordable counties in Utah are Daggett at $70,000, Carbon at $178,000 and Emery at $186,500.

Nationally, the median sales price is $375,300, marking 121 consecutive months of year-over-year increases. This is the longest-running streak on record.

Counties in Utah with the highest price increases were Cache (up 46.9%), Box Elder (up 41.2%) and Washington (up 31.9%). (Only counties with at least 50 sales were ranked.)

“Home prices have consistently moved upward as supply remains tight,” said Lawrence Yun, chief economist of the National Association of Realtors. “However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside,” he said.

In Utah, the time it took to sell a house remained low in March, taking an average of 21 days, down from 27 days last year. Homes in the $300,001-to-$500,000 category sold the fastest at 17 days on average.

While homes sold quickly, there were fewer sales than last year due to higher prices, rising interest rates and the continued inadequacy of housing inventory.

Utah Realtors sold 4,054 properties during March, down 10.5% or 475 houses from last year at the same time. Pending sales were down about 11%. Pending sales are properties that are under contract but are not yet finalized.

But not all areas saw a sales decline. Counties with the greatest sales increases were Wasatch (up 13.3%), Iron (up 11.2%) and Cache (up 7.6%).

“The housing market is starting to feel the impact of sharply rising mortgage rates and higher inflation taking a hit on purchasing power,” Yun said. “Still, homes are selling rapidly, and home price gains remain in the double-digits.”

In Utah, affordability fell about 21% from last year. A typical Utah family makes about 81% of what it needs to afford the median-priced home.

Yet, even with the affordability challenges, the low supply and high demand are keeping competition high. Buyers are also using cash to cope with the situation.

“With rising mortgage rates, cash sales made up a larger fraction of transactions, climbing to the highest share since 2014,” Yun said.

The number of homes for sale in Utah remained at near-record lows in March. There were 3,731 properties in active status at the end of the month, which is about the same as March 2021. If no new inventory came on the market, it would take 0.8 months to sell all the homes, which represents a seller’s market.

Moving into the months ahead, the National Association of Realtors expects U.S. sales to decline 10% while price growth slows to 5%.

To learn more about real estate conditions in your own area, contact a Utah Realtor.

Study says April is the best time to list a home

April 7, 2022

If you’re thinking about selling your home, now may be the perfect time. In fact, a new study says the ideal time to list a home is only a few days away.

The week of April 10-16 will be the best time to list a home in 2022, says Realtor.com, which has named the week “Listapalooza.” The company, which analyzed recent market conditions across the U.S., says sellers who list during this week will take advantage of strong demand, high asking prices, quick home sales, less competition from other sellers and fewer price reductions.

“Every year, to help sellers better navigate the spring buying season, we take a look at recent market conditions to determine the optimal week to put a home on the market,” said Realtor.com Chief Economist Danielle Hale in a press release about the report. “And that perfect moment is just [days] away for 2022 sellers, with data indicating that home prices and demand are rising earlier than in a typical year.”

 The Realtor.com team looked at seasonal trends in 2018, 2019 and 2021 data, and scored each week based on favorability toward sellers. (2020 was excluded from the analysis because of the pandemic.) They looked at competition from other sellers, listing prices, days on market, likelihood of price reductions and homebuyer demand based on Realtor.com property views.

The researchers say they expect 2022 to behave similarly to the market in 2021; however, the effect of rising mortgage rates and increased supply from builders could cause sellers to lose some leverage later in the year.

“Preparation is especially important this year, since market dynamics could shift quickly along with factors like rising mortgage rates, inflation and the ongoing conflict in Ukraine,” Hale said.

 Here are some of the benefits of listing April 10-16:

  • Above-average demand: In 2021, this week got 29% more views per listing than the average week in 2021 and 18.6% more interest than the average home listed in 2018-2021.
  • Above-average prices: Historically, homes reached prices 1.4% (+$5,000) higher than the average week throughout the year and 10.9% (+$39,000) higher than the start of the year.
  • Faster market pace: Because of the above-average demand, homes sell more quickly. Historically, homes sold this week sell 13.2% faster than the average week. In 2021, homes sold six days faster than the year’s average.
  • Fewer sellers: In 2021, there were 12.9% fewer sellers with houses on the market compared to the average week in 2021.
  • Fewer price reductions: Typically, there are 13.8% fewer price reductions during this week compared to the average week.

Later this year, there may also be some shifting market dynamics, including rising interest rates. With the increased cost to borrow, buyers may have less flexibility to afford the higher home prices and may leave the market, leading to a slower rate of price increases.

As builders help fill the housing gap with newly constructed homes, buyers may have more housing choices later in the year, and consequently, sellers will have more competition — although supply is still expected to remain low relative to demand.

Even though conditions are favorable to sellers right now, Realtor.com warns that it still takes work to sell a home.

“We all know that homes are selling lightning-fast right now. But that doesn’t necessarily mean your house will sell itself,” said Rachel Stults, managing editor at Realtor.com. “Before you list your home this spring — or any other time this year — make sure you’ve taken steps to get ready, including cleaning and decluttering, getting cost estimates on repairs you might need to make, and talking to agents to see who would be a good fit for your needs. No matter when you decide to list, whipping your home into shape beforehand will help you sell faster and for more money.”

Find a local Realtor who can help you stage your home, analyze market conditions and help you through the process.

Utah median sales price tops $500,000 in February

March 17, 2022

Record-low housing inventory has pushed Utah home prices to a new high. That’s according to the latest housing report from the Utah Association of Realtors, which examines market conditions as of February 2022.

The statewide median sales price hit a record high of $501,000 in February — up nearly 30% from 2021. That equates to a price increase of nearly $115,000 in one year. It also marks the 119th consecutive month of year-over-year price gains.

The average home price — which tends to be more volatile based on the mix of houses sold — rose nearly 25% to $633,968.

The rising prices are the result of not having enough houses for sale. At the end of February, there were fewer than 3,000 homes on the market statewide. That’s in contrast to more than 9,000 properties two years ago when there was also a housing shortage.

In Utah, there should be between 15,000 and 20,000 houses for sale to achieve balance between buyers and sellers. Right now — with just over half a month of inventory — the market highly favors sellers. In fact, conditions in January and February were the best conditions for sellers on record, according to UAR data going back to 2003.

As further evidence of the seller’s market, buyers are often paying more than the home’s asking price. On average, sellers get about 102% of their original list price — an increase from 101% last year.

“With inventory at an all-time low, buyers are still having a difficult time finding a home,” said Lawrence Yun, chief economist of the National Association of Realtors in a press release about pending home sales.

Nevertheless, even with the challenges, many buyers are still finding homes and purchasing them. Utah Realtors sold 3,219 homes during the month, making it the fourth-best February on record.

Sales fell about 8% from last year as they were held back because of low-inventory conditions. Had more homes been on the market, there likely would have been even more transactions.

In counties with at least 50 sales, Cache, Wasatch, Summit and Tooele counties had the highest gains with sales up 39%, 21%, 20% and 13% respectively.

The most affordable counties were Carbon, Emery, Daggett and Uintah with median sales prices of $159,150, $183,500, $205,000 and $232,450 respectively.

The most expensive counties were Summit, Wasatch, Grand and Morgan with median sales prices of $1,475,000, $890,650, $710,000 and $689,197.

Rising home prices along the anticipation of higher interest rates are adding to buyers’ sense of urgency. Pending sales were about even with last year with 3,821 buyers signing contracts to purchase homes.

Moving forward, buyers will be on the lookout for higher rates as the Federal Reserve concludes its asset purchase program and fights inflation.

“The 30-year fixed-rate mortgage exceeded four percent for the first time since May of 2019,” said Sam Khater, Freddie Mac’s chief economist in a March 17 press release. “The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year.”

Nevertheless, it’s important for buyers to remember that even at 4%, rates remain historically low.

“There’s also the possibility that investors may flee toward safer U.S. Treasury bonds, which may result in temporary short-term relief to interest rates,” Yun said.

Even though buyers face some headwinds, it’s important to remember that it’s still possible to get a home. Buyers looking for the best chance of success should work with a local Realtor to analyze market conditions and strategize.