In 2022, Redfin itself went through two rounds of layoffs. However, they expect the market to enter a correction that will persist into 2023 thanks to the Federal Reserves aggressive rate hikes to combat inflation. Like many other housing markets around the country, the Utah housing market has reached new heights during the pandemic as a result of a perfect storm of low inventory, high demand, and interest rates near historic lows. So (many have) stopped new construction and consequently weve seen new production just fall off, Wood said. As the demand for housing decreases as buyers find themselves priced out of the market by the increasing cost of borrowing money or postpone their homebuying plans to preserve their buying power, we can expect Utah housing prices to stabilize or diminish. Rising financing costs will hinder housing demand and we may see home sales cooling. This trend continued through the pandemic resulting in record-high home prices and rental rate growth. Utah will see minor year-over-year price declines in the first and second quarter of 2023, but prices will begin to stabilize by the third and fourth quarter, he said. 1 housing market in the nation for 2022. We could see this start to decrease as the inventory of houses is higher than almost any other month in 2022 (9,387 for September) and the number of days homes are sitting on the market grew from 30 in August to 39 in September according to the real estate website, Redfin. Even during the 2008 Recession, Utah felt the pain but, comparatively speaking, suffered a less deep economic hit. The ones who are truly making money in real estate in Utah are the investors. We hope that by publishing this Utah housing market forecast 2022 edition, we have shed some light and provided insight into some of the questions and concerns prospective investors and buyers may have. With the market starting to change, weve seen a decrease of 25.3% in sales in the Utah housing market, and 49% of homes had price drops. Lake Powell can drop your jaw around every bend of the gorgeous reservoir with 200-foot cliffs. The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. Matthew has over 30 years of professional experience both in the U.S. and U.K. The latest migration analysis is based on a sample of about two Boating in Utah can be an unmatched experience. Major Utah cities covered in this report: These Utah real estate reports, data, forecasts, and market trends are provided for informational use. This was down 45% compared to the same period the previous year and down 27.8% compared to the third quarter of 2022. Home sales: 3,219 - 26.7% less than a year ago. 2023 will be tough for sales. Search and compare real estate agents near you. Here's your Official 2022 Utah housing Market Forecast in Salt Lake City. Will it pop or deflate?, disagree over how much home prices will decline, Why two housing experts disagree on how much Utah home prices will drop in 2023, Housing market is correcting but Utahs affordability crisis isnt going away. However, as the Federal Reserve Bank started using its economic power to fight back against inflation, which has reached a forty-year high, by increasing interest rates, the Utah housing market is beginning to show signs of a significant slowing down. On average, the number of homes sold was down 34.7% year over year and there were 1,769 homes sold in January this year, down 2,712 homes sold in January last year. At the very least, folks can expect some sort of moderation over the next few years but not a decline. However, the spike in listing prices, mortgage rates, and rents will somehow be offset as income is also expected to rise. Families flourish in Utah. It would be a huge understatement to say that it has upended the way we do things in the real estate industry and has caused some major disruptions and setbacks in many peoples plans. Nationally, a growing number of experts and firms are predicting U.S. home prices will fall, some expecting slight, single-digit drops, while others expect prices to fall by double digits, perhaps even over 20%. After the next seven months, the median price. Utah Housing Market at a Glance September 2022 Even this far into 2022 with the mortgage rate hikes, Utah remains one of the hottest markets. The number of newly listed homes was 1,954 and up 1.4% year over year. TREC:Info About Brokerage Services,Consumer Protection Notice. But high mortgage rates, some weeks hovering over 7%, did trigger a type of collapse in demand and sales. While neither Wood nor Eskic are predicting a catastrophic, 2007-like crash, they do expect 2023 to be a challenging year, especially for homebuilders that leaned hard into speculative building in 2021. #UPDATE firms predicting that U.S. home prices will continue to fall in 2023:@FannieMae@Zondahome@JBREC Zelman & Associates@KPMG@GoldmanSachs@MorganStanley@WellsFargo@MoodysAnalyticsTD Bank@CapEconomics@PantheonMacroAmherstING@RedfinYieldstreet. Please note that while we have included updated and accurate Airbnb data from Mashvisor, each city and county have different rules and regulations about short-term rentals. Terms . Instead, he was actually looking at a mortgage payment of up to $4,200 a month, depending on the days rate. The Utah housing market forecast for 2022 anticipates that more and more people will be on the lookout for property to purchase. In January 2023, 17.5% of homes in Utah sold below list price, down 27.8 points year. can also indicate whether homes are lingering on the market or being sold faster than sellers are listing them. Like many other housing markets in the United States, the Utah housing market follows seasonal trends. In 2021 the average interest rate was 2.96%, the lowest interest rate that FreddieMac measured since 1971. To be included in this dataset, a Redfin.com user For this reason, despite the high median property price, investors in rental properties are most likely to enjoy very good returns. High-cost areas like San Francisco, he said, will see a 15% price decline. By Eskics calculations, 79% of Utah households couldnt afford the states median priced home as of the third quarter of 2022. The Utah housing market is amid a major shift. If youre looking to buy or sell real estate in Utah, you want to ensure youre working with a real estate agent who can help you navigate the rapidly changing conditions of the local housing markets. Copyright 2023 Deseret News Publishing Company. In addition, inflation and the looming specter of a recession are also taking a toll on Utah residents buying power. How could I possibly give an objective opinion? Utah Housing Market Forecast, What To Look For In 2022 The housing market in 2021 made the "American dream" feel more and more out of reach for a lot of people. It took an average of 55 days to sell a home during the fourth quarter. Hes predicting Utah home prices will drop 9% year over year in 2023. The surge in home prices across the country resulted in many thinking homes were sold for more than theyre worth. of $518,200. Thats when buyers found their affordability ceiling. All Rights Reserved, Why two housing experts disagree on how much Utah home prices will drop in 2023, priced some two-thirds of Utahns out of affording the median priced home, Housing market is correcting but Utahs affordability crisis isnt going away. He expects buyers and sellers will step back and wait for the dust to settle, many of them locked in at low, 3% mortgage rates that helped send the nations housing market into a frenzy in 2020 and 2021. Thats the story of 2022. Utah Home Sales In the final quarter of 2022, 5,145 homes sold in the areas covered by this report. Thats a good thing, because they were overpriced anyway, right? Perry said. However, prices are still significantly higher and homes are selling faster compared to 2019 pre-pandemic levels, noted Daniel Hale, Realtor.coms chief economist. In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics. Given the Utah housing market forecast 2022, here are the top real estate markets any wise investor can add to their real estate portfolio. price indicates that the housing market is competitive and bidding wars are becoming more common. Windermere Search AppSite Map, 2023 Windermere Real Estate Services Company / All rights reserved / Terms/Privacy / Feedback / Site Map. Overall, Yun has predicted U.S. home sales to fall by 6.8% in 2023 compared to 2022, and he expects home prices to increase only 0.3%, or essentially flatline. Agents receive this question at least 10 to 15 times per week. The average annual profit of property investment was: 10.098% in 2018; . , The direction and pace at which housing supply changes indicate whether the options for buyers are increasing or decreasing. While interest rates remain high, the coming year will likely see continued cooling of the housing market in Utah; however, lack of supply will buffer most markets. Their goal is mainly to make a profit from investing in real estate but each of them has different approaches and strategies to achieve their goals. Both bearded men chuckled, along with laughs and applause from the audience. That said, listing prices were higher in Morgan, Wasatch, and Summit counties compared to the prior quarter. Moodys Analytics expects a peak-to-trough U.S. home price decline of 10% or a 15% to 20% decline if a recession hits. Thats where it gets tough. NerdWallet reports that 2022 will see a low end of 3,4% according to Fannie Mae and will reach 4% by the end of the year as predicted by the Mortgage Bankers Association. But what about the increase in interest rates? Additionally. As mortgage rates are at record highs in 20 years by 7.08%. Peak-to-trough, with the peak being May 2022, he expects prices to decline by a percentage somewhere in the teens, depending on what happens with interest rates over coming months. These factors positioned Utah in the top spot on the Bankrate Housing Heat Index. All areas saw average market time rise compared to the third quarter of 2022 as well as the fourth quarter of 2021. Sellers could no longer do whatever they wanted, Perry said, and suddenly buyers had more options at least those who could still afford to buy. 2020 further increased that number to almost 73% as median home sales prices reached $380,000. By April, mortgage rates had begun shooting up. With the rise of interest rates, a significant economic shift is occurring and we will likely see Utah home sales temper buyer demand. However, during the Great Recession, prices declined for years before accelerating again. Heres why, The Wests sharp housing market correction: Heres how fast home prices have fallen in 4 months, Home sales are crashing down to reality in the West, What state lawmakers are doing to address Utahs housing crisis, Department of Labor reports that child labor has increased by nearly 70% since 2018, Feds hardwire child care benefits to $39 billion in CHIPS Act funding, Grit and circumstance: Bestselling author Angela Duckworth brings her wisdom to BYU, The starter home in Utah is extinct: How first-time homebuyers could get 20K for new homes, How a new service aims to help teens remove explicit internet images. 30-year mortgage rate: 5.59000%. Realtor.com anticipates Salt Lake City metro home-price growth will be at 8.5% and home-sales growth at 15.2% in 2022. Park City Data The latest housing data shows the median priced home in Utah's most populated county increased to $550,000 in the third quarter of 2021. Since the pandemic began, housing prices in the Beehive State have skyrocketed to the point that more than 50% of households can no longer afford to buy median-priced properties in the state. The median sale price was up 5.6% in September 2022 Y-O-Y, but the number of homes sold dropped 26.7%. Homes sold fastest in Salt Lake County and slowest in Summit County. The rental market is not affordable and is experiencing high rental prices. The slate of speakers all sought to help bring clarity to a market that they said has largely been fraught with volatility and uncertainty as mortgage rates, some days hovering around 7%, have squeezed buyers and have brought a rapid end to what had been over two years of a blazing hot market. All rights reserved. 27.7% of homes sold above the asking price. The Utah housing market has experienced consistent growth in real estate throughout the past five years, but it started to take off in mid-2020. Housing prices are deemed overvalued when their local incomes, job market, and economy do not support the sale prices. Utah has seen a significant increase in population over the past decade, which will likely help with the influx of home listings once everyone gets used to the new lending rates. 2.1 months of housing inventory. If they hadnt been so aggressive in 2020 and 2021, wed be talking about unemployment now rather than inflation. He also noted it was really Congress that juiced the economy with so much one-time stimulus money, not the Fed. The 2021 Utah housing market will be long remembered for its record-breaking price increases. Scotty Fletcher, left, and his partner Joseph Branca hang out in their living room in the apartment they rent in Salt Lake City on Thursday, Dec. 29, 2022. While they both agree the market is in the midst of a price correction after two years of runaway demand amid the pandemic housing frenzy, they have differing outlooks for just how deep that price correction will run next year. Several people claim that hedge funds, investors, and cash buyers are to blame for this lopsidedness. Its important to keep a tab on the housing market and current trends. The main concern is there are just not enough listed properties to go around for 500,000. Forecast for 2022 High prices, likely interest rates increases, listing . Months supply of inventory: 3 up from 1 in September 2021. While overvalued does not necessarily mean that a housing market will crash, these markets are at a higher risk of a sharper correction when economic conditions change. Half a million people from one state alone. between 2021-12-31 and 2022-12-31. Right now, its close to 5. If you divided your housing price by your annual income, it was 2.6. The Utah housing market is following many of the same patterns observed nationwide. Windermere Living If you would like to buy a house in this dynamic state, the best time to house hunt is in the early spring (April) when inventory is at its highest in preparation for the hot summer real estate market, and Utah house prices are at their lowest. Its falling off faster than we thought it would.. He has a background in sales and marketing and construction as a Project Superintendent. The good news for buyers who are prepared to take on high mortgage rates is that they no longer face the fierce competition of early 2022. Even as mortgage rates in recent weeks have ticked down slightly, economists are expecting higher rates to continue to dampen sales throughout 2023. Year over year, prices rose in four markets but pulled back in the other three. Historical Utah real estate data and trends are included below the latest update. Eskic said it all comes down to affordability. Even before COVID swept across the world, the Utah housing market was already out of reach for 63% of renter households. This speedometer reflects the state of the regions real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I call it the great debate, Ivory said. I have moved the needle accordingly. If you find it useful, please properly attribute this resource with a link. One of the many reasons, and perhaps one of the most important reasons folks are moving to Utah, is because this great state boasts one of the strongest economies and job markets in the Nation. Months supply of inventory: 3 - up from 1 in September 2021. This gives us a 23.7% combined overall growth rate This projected growth puts them ahead of other booming markets like Boise City ID, Spokane WA, and Indianapolis IN. Salt Lake City Real Estate Market Forecast, Salt Lake (Utah state) home price prediction. According to September 2022 data, some of the key market stats for the Utah housing market appear as follows: As in many other places across the country, Utah home prices have increased faster than usual in the aftermath of the COVID-19 outbreak. Join Us There are currently 8,551 residential homes for sale in the United States. Thank you for registering with FastExpert. If you are using a screen reader, or having trouble reading this website, please call Redfin Customer Support for help at 1-844-759-7732. Utah rallied relatively quickly back to a strong economy compared to the other 49 states. Contact Us, Real Estate Blog Median List Price By Bedroom Count Median List Price Compared To Nearby Cities This is the MOST ACCURATE UTAH Housing Market Forecast for 2022. Median home price: $533,500 a 5.6% Y.o.Y. A high or growing percentage of homes selling above listprice indicates that the housing market is competitive and bidding wars are becoming more common. Peak-to-trough, with the peak being May 2022 , he expects prices to decline by a percentage somewhere in the. The researchers Jim Wood and Dejan Eskic, both from the University of Utahs Kem C. Gardner Institute had a friendly debate Friday during Ivory Homes annual private gathering of hundreds of homebuilders and other industry partners from across the state. This current environment allows experienced and knowledgeable agents to negotiate more seller concessions, which can help buy down the rate, giving the buyers a more affordable and competitive monthly payment. The median days on the market was 70 days, up 47 year over year., The direction and pace at which home prices are changing are indicators of the strength of the housing market andwhether homes are becoming more or less affordable. The Utah housing market does not yet significantly favor home buyers but, given the data discussed in this report, it has certainly shifted away from sellers and into neutral territory. Is the Utah housing market going to crash in 2023? The strong demand and limited supply of home inventory will push against price declines and keep home prices relatively stable over time. In January 2023, home prices in Utah were down 3.0% compared to last year, selling for a median price. The question is, how far will that correction run and what will it mean for home prices in 2023? Sales fell across the board compared to both the fourth quarter of 2021 and the third quarter of 2022. So unless we have a real serious recession, I think prices have some support given our economy., Wood also said even if home prices dropped 10%, they wouldnt set off a wave of foreclosures, unlike what happened in 2008, which just pulled prices down. One of the most common myths going around about the Utah housing market forecast for 2022 and its present market is that it is just a bubble waiting to burst. However, this increase in inventory is not due to newly listed homes but properties staying on the market longer, as only 3,764 homes were listed in September 2022, 20% less than the year before. This data does not reflect actual moves. Real estate investors number by the thousands in the US. But by the end of the year, well stabilize and well be flat, Wood said. Significantly higher inventory levels gave buyers a lot more options than they have become accustomed to. 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