April 22, 2021
The temperature of an already hot housing market has gone up even more this spring as home sales increase, prices rise and buyers compete for a limited number of properties for sale.
March data from the Utah Association of Realtors (UAR) shows the median sales price rising nearly 20% from last year while the number of homes for sale has fallen nearly 70%.
The housing shortage has made it tough for buyers to get homes, but even with those challenges, sales still increased nearly 5% compared to March 2020. Utah Realtors sold 4,390 homes, setting a record for the most homes sold during March, according to Utah Association of Realtors data, which dates back to 2003.
Sales increased the most in Uintah County, where they went up 117% from last year.
Utah also set a record for the highest median price on record. At $405,000, this is an all-time high, according to UAR data.
The rising prices, booming market and lack of homes for sale is a similar occurrence in housing markets throughout the country.
The National Association of Realtors (NAR) reported on Thursday that the U.S. median sales price increased 17% in March. The organization said it is a record-breaking annual pace, and $329,100 is a record-high median sales price.
“Consumers are facing much higher home prices, rising mortgage rates, and falling affordability; however, buyers are still actively in the market,” said Lawrence Yun, chief economist of the National Association of Realtors.
The lack of homes for sale is pushing up the prices. With only 3,978 properties for sale in Utah at the end of March, this is a record low, according to UAR data. Previously in balanced markets that favored both buyers and sellers, there were around 20,000 available properties.
Currently, there is less than one month of supply. That’s down 71% from last year and represents an extreme seller’s market. In a balanced market, there’s a supply of about six months.
In some cases, the lack of choices and opportunity to get a home are holding buyers back. Yun says there would be more sales if there were more houses on the market.
In Utah, the most competitive areas are Tooele County, Washington County, Davis County, Cache County, Weber County and Salt Lake County. Each of these counties only has 0.6 months of supply.
“The sales for March would have been measurably higher, had there been more inventory,” Yun said. “Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.”
In Utah, the time it takes to sell a home plummeted. The average days on market fell 44% from last year.
Meanwhile, most sellers are getting more than their asking price. The average percent of asking price for all properties sold was 102%. That’s also a record high.
Along with Utah, the U.S. is also facing a housing supply shortage. U.S. housing inventory is down 28% from a year ago.
“Without an increase in supply, the society wealth division will widen with homeowners enjoying sizable equity gains while renters will struggle to become homeowners,” Yun said.
While the lack of housing supply remains a problem, Yun said there are positive signs for the economy and home-building.
“At least half of the adult population has received a COVID-19 vaccination, according to reports, and recent housing starts and job creation data show encouraging dynamics of more supply and strong demand in the housing sector,” Yun said.
To learn more about the housing conditions in your own area and for help navigating this low-inventory market, contact a local Realtor.