The Utah housing market is currently experiencing a shift towards a buyer’s market. The data reveals a decrease in closed sales both in the month of November and year-to-date. This suggests a higher inventory of homes available for buyers, providing them with more options and potentially giving them stronger negotiating power.
While the median sales price has seen a slight increase in November 2023 compared to the same month last year, the year-to-date data shows a decrease. The median sales price has dropped by 4.9%, indicating a potential decline in home values over the course of the year. However, it’s essential to consider other factors such as market demand, interest rates, and economic conditions influencing these price trends.
The current data does not suggest an imminent housing market crash. While there has been a decline in closed sales and a slight reduction in median sales prices, it’s important to monitor these trends over a more extended period. External factors like economic stability, interest rates, and job markets can significantly impact the housing market’s overall health.
How is the Utah housing market doing currently?
Here is the data for November provided by the Utah Association of REALTORS®.
November 2022 vs. November 2023:
- Closed Sales: 2,708 vs. 2,588 (-4.4%)
- Median Sales Price: $484,900 vs. $490,000 (+1.1%)
Year-to-Date 2022 vs. Year-to-Date 2023:
- Closed Sales: 42,218 vs. 35,792 (-15.2%)
- Median Sales Price: $510,000 vs. $485,000 (-4.9%)
Considering the shift towards a buyer’s market and a slight decrease in median sales prices, now could be a favorable time for buyers to enter the Utah housing market. The increased inventory provides more choices, and the relatively lower median sales prices may present opportunities for those looking to make a purchase. However, individuals should conduct thorough research, assess personal financial situations, and stay informed about market developments before making any decisions.
Utah Real Estate Market Report by UtahRealEstate
Here’s how the housing market performed, according to UtahRealEstate.com.
- In October 2023, around 2788 homes were sold on MLS, up 3.4% from last year.
- No. of single-family homes sold was 2060.
- No. of multi-family homes sold was 728.
- The median days on market were 34, up from 31 days last month.
- The median selling price was $540,000 for single-family homes, up 1.5% year-over-year.
- The median selling price was $410,000 for multi-family homes, up 1.2% year-over-year.
Utah Real Estate Market Trends for Q3 2023
According to the report by Windermere Real Estate Chief Economist Matthew Gardner, after a promising second quarter, year-over-year employment growth has experienced a slight setback. Utah added 39,000 jobs over the past 12 months, representing an annual growth rate of 2.3%. Notably, the Salt Lake City metro area led job growth with a rise of 2.7%, followed by Ogden and Provo metro areas with 2.4% and 1.7%, respectively.
Despite the positive job growth, Utah’s unemployment rate edged up to 2.5% in August, a 0.1% increase year over year. The county-level analysis reveals the lowest jobless rate in Morgan County (2.5%) and the highest in Weber County, where 3.1% of the workforce faced unemployment. Overall, the unemployment rate within the counties covered in this report averaged 3%.
Utah Home Sales
In the third quarter of 2023, 6,675 homes were sold in the analyzed areas, marking a 9.5% decrease compared to the same period in 2022. Although total sales volumes dropped, Wasatch, Summit, and Morgan counties experienced growth in both the third quarter of 2022 and the second quarter of this year.
Listing activity surged by 28.7% in comparison to the second quarter of 2023, indicating increased market choices. However, pending sales fell by 8.9%, suggesting potential lackluster closings in the fourth quarter.
Utah Home Prices
The average sale price in Utah grew by 4% from 2022 to $651,913. Regionally, median list prices remained flat in the third quarter compared to the second quarter of the year. However, Morgan County saw a significant price increase due to its smaller market size.
Price growth has been slowing, influenced by a substantial rise in mortgage rates. With the anticipation of limited price growth for the remainder of the year, market dynamics are impacted by both higher financing costs and increased market choices.
Mortgage Rates
Mortgage rates continued their upward trend in the third quarter of 2023, reaching levels not seen since the fall of 2000. Tied to the interest rate on 10-year treasuries, mortgage rates are influenced by economic factors. Despite a positive economy, mortgage rates are expected to remain elevated, with forecasts suggesting a potential downtrend in the spring of next year.
Utah Days on Market
The average time to sell a home in the analyzed counties increased by 17 days compared to the same period in 2022. Notably, Salt Lake County witnessed the fastest sales, while Wasatch County had the slowest. Despite the rise in market time, the third quarter saw a modest 3-day reduction compared to the second quarter of 2023.
Utah Housing Market Forecast for 2024
Zillow’s data indicates a slight decrease in the average home value over the past year. However, the market’s quick pace, with homes going pending in approximately 27 days, suggests continued demand. The sizable inventory of homes for sale (11,962) and a steady stream of new listings (3,088) offer a diverse range of options for potential buyers.
The median sale to list ratio of 0.995 suggests that homes are generally selling close to their list prices. This can be advantageous for both buyers and sellers as it indicates a balanced market where realistic pricing is key. The median sale price of $481,703 and median list price of $556,633 provide insights into the pricing dynamics within the market.
The percentages of sales over and under list price (26.1% and 53.0%, respectively) reflect a mixed landscape, indicating opportunities for negotiation and varying seller strategies.
The Utah housing market continues to exhibit dynamic trends, with Zillow reporting key statistics for November 2023.
- Average Home Value: $502,647
- Yearly Change: -1.2%
- Days to Pending: 27 days
Inventory and Listings
- For Sale Inventory (November 30, 2023): 11,962
- New Listings (November 30, 2023): 3,088
Sale and List Prices
- Median Sale to List Ratio (October 31, 2023): 0.995
- Median Sale Price (October 31, 2023): $481,703
- Median List Price (November 30, 2023): $556,633
Market Dynamics
- Percent of Sales Over List Price (October 31, 2023): 26.1%
- Percent of Sales Under List Price (October 31, 2023): 53.0%
Utah Areas Projected for Home Price Growth in 2024
According to the data on areas within Utah, there are distinct expectations for home price movements in 2024. The regions of Vernal, Price, Heber, Logan, and Ogden show varying trends in their anticipated home price changes.
Vernal, UT
In Vernal, Utah, a metropolitan statistical area (MSA), the housing market is poised for substantial growth. Based on data analysis, the median home prices are expected to experience a steady rise, projecting an increase from 0.9% on 29th February 2024 to an impressive 3.4% by 30th November 2024. This positive trajectory indicates a robust and flourishing real estate market in Vernal.
Price, UT
Similarly, Price, Utah, another MSA in the state, is anticipated to witness a notable surge in home prices throughout 2024. Despite a marginal decrease of -0.1% on 31st December 2023, the market is projected to rebound, showing a substantial increase of 2.9% by the end of November 2024. This resurgence signifies a resilient housing market in Price.
Heber, UT
Heber, Utah, is also on the radar for potential home price growth in 2024. While there might be a slight decline of -0.5% on 29th February 2024, the market is expected to recover, with a projected increase of 2% by 30th November 2024. This indicates a positive outlook for homeowners and investors in Heber.
Logan, UT
Lastly, Logan, Utah, is another region showcasing favorable prospects in the real estate landscape. Despite a minor dip of -0.5% on 29th February 2024, the market is forecasted to rebound, with an expected rise of 1.7% by 30th November 2024. Logan’s real estate market appears resilient, offering potential opportunities for those involved in property transactions.
Ogden, UT
In Ogden, Utah, part of the metropolitan statistical areas (MSA) in the state, the real estate market exhibits resilience and potential for growth in 2024. The data suggests a modest increase of 0.2% on 31st December 2023, followed by a slight decrease of -0.1% on 29th February 2024. However, the market is expected to bounce back, projecting a notable increase of 1.3% by 30th November 2024. This indicates a steady and positive trajectory for the housing market in Ogden.
Provo, UT
Provo, Utah, is another MSA where real estate is anticipated to experience positive trends in 2024. With a steady increase of 0.2% on 31st December 2023 and a marginal growth of 0.1% on 29th February 2024, the market is expected to maintain its upward momentum, projecting an overall rise of 0.8% by 30th November 2024. Provo’s housing market demonstrates stability and potential for appreciation.
Cedar City, UT
Cedar City, Utah, is also included in the areas where home prices are expected to rise in 2024. Despite a slight decline of -0.1% on 31st December 2023 and a more substantial decrease of -0.5% on 29th February 2024, the market is projected to recover, showing a notable increase of 0.8% by 30th November 2024. This suggests a resilient real estate market in Cedar City.
Salt Lake City, UT
Salt Lake City, a major metropolitan area in Utah, is poised for a moderate increase in home prices in 2024. While the market experiences a stability with no change on 31st December 2023 and a slight decrease of -0.4% on 29th February 2024, it is expected to rebound, projecting a modest increase of 0.3% by 30th November 2024. Salt Lake City’s real estate market remains a promising arena for potential appreciation.
St. George, UT
St. George, Utah, is a region where the real estate market is expected to recover from a decline in 2024. Despite a decrease of -0.3% on 31st December 2023 and a more significant drop of -1.2% on 29th February 2024, the market is projected to stabilize, showing a slight increase of 0.1% by 30th November 2024. St. George’s housing market demonstrates resilience and potential for a rebound.
Are Home Prices Dropping in Utah?
The overall data indicates mixed trends, with some areas anticipating price increases and others expecting declines. While Vernal, Ogden, and Provo show positive forecasts, regions like St. George and Cedar City project slight decreases. This dynamic suggests that while certain areas may experience price drops, the market as a whole is characterized by a level of volatility and heterogeneity in price movements.
The forecasted price changes do not necessarily imply an imminent housing market crash. Instead, the variations in projections across different regions highlight the complexity and localized nature of the real estate market. It is essential to consider additional factors, such as economic stability and national trends, to make a comprehensive assessment of the market’s health and potential risks.
Why Are Home Prices So High in Utah?
Utah boasts the nation’s strongest pace of job growth, along with rock-bottom unemployment, ultra-low mortgage rates, few mortgage delinquencies, and low state and local taxes. All those factors pushed Utah into first place in Bankrate’s Housing Heat Index for the fourth quarter of 2020. Utah’s home values increased by 15.39% in the 12-month period that ended Dec. 31, third-best among U.S. states, according to the Federal Housing Finance Agency.
Since 1991 Q1, HPI for Utah has increased by 414.95%. Idaho ranked #1 in FHFA State House Price Indexes. The HPI is a broad measure of the movement of single-family house prices. It is measured by reviewing mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac. According to a Bankrate analysis of Labor Department data, Utah also posted the second-strongest job growth in the nation from December 2019 to December 2020.
Even if inventory is significantly higher than it has been in the previous two years, it still does not address what has been a problem in Utah for years. There are still not enough houses. Even though homebuilding soared in Utah in 2021, putting the state on the national map for its housing boom. It made a decent dent in Utah’s housing shortage, but not enough to erase it.
Rapid population growth and job growth are the two most important drivers of housing demand in Utah right now. According to local real estate agents, there aren’t enough single-family homes to meet the rising housing demand. A balanced market has roughly a six-month supply of houses, which means that if we stopped listing new properties, we’d still have about six months before we ran out. And right now, Utah is down to about four weeks of supply of homes.
As a result, finding a dream house in this market is challenging for buyers, making it extremely competitive. Utah’s employment landscape is also one of the most impressive in the country. It has had the most rapidly growing job market in the country for the past decade. Utah’s population grew by 18.4% over the past decade, making it the fastest-growing state. It’s now the 30th most populated state, with nearly 3.28 million people, according to U.S. Census Bureau data.
A large number of Californians are relocating to Utah, putting extra pressure on the supply side. In-migration to the Salt Lake metropolitan area is still at an all-time high. The issue is that demand is so strong that inventory can’t reach a level that indicates a sufficient supply. People are also coming from New York, Boston, Vermont, Austin, Texas, and other cities, according to local real estate agents. They also think that people who are first-time homebuyers in Utah will be priced out of the market by people moving in from other states.
References:
- https://utahrealtors.com/
- https://www.zillow.com/home-values/55/ut/
- https://www.fhfa.gov/DataTools/Tools/Pages/House-Price-Index-(HPI).aspx
