February 10, 2022

Utah metro areas had some of the highest home price gains in the country at the end of 2021.

With home prices increasing more than 24% in the fourth quarter, Ogden-Clearfield and Salt Lake City ranked eighth and ninth on a top 10 list of U.S. metros with the highest yearly price gains.

In the Ogden-Clearfield metro area, the median sales price was $444,200 — up 24.7% from the fourth quarter 2020 median of $356,300. In Salt Lake, the median sales price was $505,700 — up 24.4% from $406,500 in 2020.

The data come from a National Association of Realtors report, which studied home price trends in 183 metro areas across the U.S. Of those markets, 67% experienced double-digit price appreciation. Nationally, the single-family median home price rose 14.6%.

“Homebuyers in the last quarter saw little relief as home prices continued to climb, albeit not as fast as earlier in the year,” said Lawrence Yun, NAR chief economist. “The increasing prices are indicative of a seller’s market, with an abundance of eager buyers and very limited supply.”

Metros in the Sunbelt and Mountain states had the highest yearly price gains. Along with Ogden and Salt Lake, neighboring metros of Phoenix (up 25.7%), Las Vegas (up 24.7%) and Boise (up 24.3%) were also on the top 10 list.

“The strength of price gains are associated with the strength of the local job market, but the escalating prices took a toll on home shoppers, compelling many to come up with extra cash, and forcing others to delay making a purchase altogether,” Yun said. “A number of families, especially would-be first-time buyers, are increasingly being forced out of the market, and this is why supply is critical to expanding homeownership opportunity.”

The rapidly rising prices are underscoring the need for more homes and greater affordability. According to the report, local families would need the following incomes to qualify for the median-priced home:

  • Ogden-Clearfield
    • 5% down payment: $87,572
    • 10% down payment: $82,963
    • 20% down payment: $73,745
  • Salt Lake City
    • 5% down payment: $99,696
    • 10% down payment: $94,449
    • 20% down payment $83,955

A separate report from the National Association of Home Builders also looked at current affordability trends, attributing a 10-year low on supply-chain bottlenecks and rising interest rates.

“Supply chain disruptions stemming from labor shortages to lumber to home appliances and other building materials are delaying construction times and contributing to higher home prices,” said NAHB Chairman Chuck Fowke. “Policymakers must focus on addressing these issues to help ease rising construction costs that are contributing to housing affordability headwinds.”

In Utah, the most affordable metro area is Ogden-Clearfield, according to the NAHB report. Based on incomes, housing prices and interest rates, 58.2% of homes sold in Ogden-Clearfield were considered affordable in the fourth quarter.

Here’s how affordability looked throughout Utah:

  • Ogden-Clearfield: 2% of homes sold were affordable to families earning the median income of $90,900.
  • Provo-Orem: 5% of homes sold were affordable to families earning the median income of $83,700.
  • Salt Lake City:3% of homes sold were affordable to families earning the median income of $92,900.
  • George: 27.2% of homes sold were affordable to families earning the median income of $69,600.

While the market continues to be challenging for home buyers, there is some hope on the horizon.

“The good news is that home prices should begin to normalize later in 2022 as more homes come on the market,” Yun said.

To learn more about housing prices and conditions in your area, contact a local Realtor.

2021 marks second-best year for Utah home sales

January 20, 2022

Even though buyers struggled to secure homes amid inventory shortages, 2021 was the second-best year on record for Utah home sales. Utah Realtors sold more than 55,000 homes in 2021 — second only to the nearly 60,000 transactions that took place in 2020.

The numbers come from the Utah Association of Realtors 2021 annual home sales report, which was released this week.

“There was a significant surge in first-time buyers at the end of the year,” said Lawrence Yun, chief economist of the National Association of Realtors, referring to U.S. existing-home sales. “With mortgage rates expected to rise in 2022, it’s likely that a portion of December buyers were intent on avoiding the inevitable rate increases.”

Along with sales, home prices hit record-breaking territory in 2021. The Utah median home price soared to a new high in December, reaching $475,000 for the first time on UAR records dating back to 2003. That’s 117th consecutive months of year-over-year increases. Nationally, the streak of 118 straight months is the longest running on record.

For 2021, the Utah median sales price was $442,200 — up nearly 25% from the median of $355,000 in 2020. Along with Idaho, Utah has had some of the highest price increases in the nation.

The time a home stays on the market also hit a record low, averaging 22 days statewide in 2021.

The soaring prices and fast sales are the result of strong demand and not enough supply. In fact, the number of houses for sale hit a record low in December with only 3,049 active listings for the entire state.

That’s down nearly 27% from the 4,165 in 2020 and down a whopping 69% from the 9,852 listings in December 2019. It’s important to note that even in 2019 with more than 9,000 active listings, there wasn’t enough housing inventory.

With just over 3,000 listings, Utah unsold inventory sits at a 0.7 month-supply at the present sales pace. This is down from 0.8 months in December 2020 and ties the record low set in first quarter 2021.

Nationally, the situation was similar — although less severe — with 1.8-months of supply.

“We saw inventory numbers hit an all-time low in December,” Yun said. “Home builders have already made strides in 2022 to increase supply, but reversing gaps like the ones we’ve seen recently will take years to correct.”

In Utah, experts estimate a housing supply gap of about 44,000 units. While builders pulled a record 35,000 residential construction permits last year, it’s still not enough to make up the gap and address ongoing construction needs.

The supply constraints are affecting affordability. In 2021, Utah housing affordability fell about 18%. At the end of December, a Utah family making the median income only had 96% of what was needed to buy the median-priced home.

Rising interest rates and prices will continue to impact affordability, but Yun expects rates to remain below 4% and for wages to hold firm due to the tight labor market.

“This year, consumers should prepare to endure some increases in mortgage rates,” Yun cautioned. “I also expect home prices to grow more moderately by 3% to 5% in 2022, and then similarly in 2023 as more supply reaches the market.”

Local experts predict the increase in Utah home prices to be higher than that predicted nationally. Jim Wood, Ivory-Boyer senior fellow at the Kem C. Gardner Policy Institute, told Realtors last week that he expects Salt Lake home prices to rise 10-12% in 2022.

To learn more about housing market conditions and trends in your area, contact a local Realtor.

 

March sets records for sales, prices, inventory

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.