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.