As for interest rates, Wood noted forecasts vary widely, anywhere from 5% to 9%, but he personally expects rates to bounce between 6.5% and 7.5% in 2023. However, Nelson-Ogilvy sees housing prices cooling off a . For renters, these relentless price increases mean the path to ownership has narrowed even further. Are there enough homes for sale to meet buyer demand? The median days on the market was 70 days, up 47 year over year. While at the beginning of the year, homebuyers could purchase a home at an interest rate of around 3%, currently borrowers are looking at more than 7%. 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. So unless we have a real serious recession, I think prices have some support given our economy.. The number of days on the market had also increased sharply at 39 median D.o.M., compared to 15 the previous year, further indicating that the days when properties were being snatched off the market as soon as they were listed are long gone. The rental market is not affordable and is experiencing high rental prices. Realtor.com anticipates Salt Lake City metro home-price growth will be at 8.5% and home-sales growth at 15.2% in 2022. The median home price has increased from $345,000 in September 2019 to $553,500 in September 2022, with a peak of $577,500 in May 2022, representing a staggering 60.43% increase in 36 months, well above the national average. Shouldnt I wait for mortgage rates to decrease before I buy? My current forecast is that mortgage rates will trend lower as we move through the year. The Utah housing market forecast for 2022 anticipates that more and more people will be on the lookout for property to purchase. If you ask Branca, 2022 definitely wasnt the year for buyers either. Utah Housing Market Trends Q4 2022 According to the report by Windermere Real Estate Chief Economist Matthew Gardner, the Utah real estate market has experienced a slowdown in the pace of job growth, with the state adding 43,300 jobs over the past 12 months at an annual rate of 2.6%. So players should expect to see both challenges and opportunities in 2022. 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. Doing read more, Click here to browse our Real Estate Agent Directory and contact top-rated agents in your area! Historically, brief and prolonged price declines in Utah went hand in hand with joblessness and recessions, both of which dont seem likely in the next two to three years. REDFIN and all REDFIN variants, TITLE FORWARD, WALK SCORE, and the R logos, are trademarks of Redfin Corporation, registered or pending in the USPTO. So youll find the deals with the homebuilders, but youre not going to find the deals on (existing) homes, Eskic said. Updated January 2023: By searching, you agree to the Terms of Use, andPrivacy Policy. price indicates that the housing market is competitive and bidding wars are becoming more common. Hes employed as a professional actor and director of marketing and advertising at Hale Center Theater Orem, as well as director of communications at the Salt Lake Acting Company. This was down 45% compared to the same period the previous year and down 27.8% compared to the third quarter of 2022. At the very least, folks can expect some sort of moderation over the next few years but not a decline. But when mortgage rates ticked up, he said it quickly became apparent that he wasnt going to be able to buy a home with, say, a $1,600 monthly mortgage payment. Utah remains a sellers market as inventory levels have yet to return to their pre-pandemic levels. The migration during the Pandemic contributed to the increased demand in the Utah housing market and an increase in housing prices. 1 housing market in the nation for 2022. These two organizations along with Freddie Mac and the National Association of Realtors predict that rates will steadily rise throughout 2022. (Now) its resetting, its balancing, its coming down.. The cops came and busted everyone.. Even before COVID swept across the world, the Utah housing market was already out of reach for 63% of renter households. But housing costs werent nearly as high back then, Eskic interjected. Hes predicting Utah home prices will drop 9% year over year in 2023. All Rights Reserved. Below is the latest Utah housing market trends analysis. So its really tough to say, but I think its going to be minimal negative, or negative positive, Yun said. Based on Redfin calculations of home data from MLS and/or public records. , Homes that sold above list price likely received multiple offers. Once the Fed slows inflation by continued interest rate hikes, they will have to ease the tightening by making money more affordable and accessible. The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. RELATED: 'It's daunting:' How housing costs are affecting Utah's ski resort staff Listing prices, rents, and mortgage rates are all expected to climb while income rises. They say it will pose challenges, especially for homebuilders, but also rebalance a market thats priced some two-thirds of Utahns out of affording the median priced home. In the final quarter of 2022, 5,145 homes sold in the areas covered by this report. This, combined with higher mortgage rates, likely impacted sales in the fourth quarter. #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. For this reason, despite the high median property price, investors in rental properties are most likely to enjoy very good returns. Prices, though theyre on a downward trajectory, are still up year over year by single-digit percentages at least for now. Nationwide, housing pandemic hot spots in the West have been among the first to see sale prices slashed. shattering the 43-year-old record of 20.1% set in 1978," wrote James Wood in the 2022 Housing Forecast Executive Report. In Utah, because of its continued strong job economy, experts predict the states housing market to experience some turbulence in 2023 but come out strong next year. Mashvisors Utah housing market forecast 2022 and pretty much all other real estate forecasts for the year have identified Salt Lake City metro area as the countrys hottest housing market-beating other burgeoning areas like Boise ID and Spokane WA. READ REDFIN'S, Do not sell or share my personal information. Therefore, Wood is predicting a couple of quarters in 2023, with home prices likely the most vulnerable in the first and second quarter of the year. Thats where it gets tough. The U.S. housing market is going through what Federal Reserve Chairman Jerome Powell has called a difficult correction and a reset as it comes off the tail end of a pandemic frenzy fueled housing bubble. In its fight with record inflation levels throughout 2022, the Fed made a series of aggressive borrowing rate hikes, which translated to a spike in mortgage rates that priced or spooked buyers out of the market. The music stopped. Right now, the continued rise in both mortgage rates and home price have kept many out of the housing market. Even with todays rising mortgage rates, it will continue to be the time to buy a house in Utah. The rising inventory, coupled with listing price growth dropping below 10% for the first time in a year, offers some positives for homebuyers, Realtor.com stated in its report, as they may have more options and more time to make a decision on a home purchase.. To ensure a good return on investment, we encourage real estate investors to perform their due diligence and seek out the help of local Utah real estate professionals. The cops came, quipped Dejan Eskic, senior research fellow at the University of Utahs Kem C. Gardner Policy Institute, one of Utahs leading housing experts. 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. In January 2023, 17.5% of homes in Utah sold below list price, down 27.8 points year. Price growth rates, especially in 2021, were nothing short of astounding. There were only 31.8% of homes that had price drops, up from 10.0% of homes in January last year. Terms . It was the year that put homeownership far out of reach. After seven years of Salt Lake County sales averaging 18,000 homes, the high prices of 2023 will mean sales will not top 13,000, he predicted, and likely range between 11,000 to 12,000. A low or shrinking percentage of homes selling above list price suggests that the market is becoming less competitive. Is the Utah housing market going to crash in 2023? We go back to the 70s, for example, Eskic said. Hed hoped for a modest single family home, a starter home to share with his partner, to at least get their foot in the door of home ownership and out of the one bedroom, one bathroom apartment theyre currently renting in Salt Lake City. Even with the recent slowdown, a correctly priced home will sell, and it will sell with record equity growth over the last 10-year average. By Eskics calculations, 79% of Utah households couldnt afford the states median priced home as of the third quarter of 2022. Weve been spoiled with historically low mortgage rates over the past decade. They also anticipate prices to grow 8.5% and sales to grow 15.2%. Home sales: 3,219 26.7% less than a year ago. Others argue the apartments meet the growing demand for high-end housing in Salt Lake City, it's the latest development in what's been an expensive year to find and afford a home. West Valley City is assimilated to a suburb of Salt Lake City, but it is also the second most populous city in the state, with 140,230 residents. This is the MOST ACCURATE UTAH Housing Market Forecast for 2022. In June 2020, the median sales price across Utah averaged $363,600 and has now jumped to $580,000. 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. 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. For further information about the housing market in your area, please dont hesitate to contact your Windermere Real Estate agent. In addition, Utahs median listing price is 36% more than homes across the United States. Significantly higher inventory levels gave buyers a lot more options than they have become accustomed to. . 2022's housing market follows Utah's hottest housing year ever . Once the market rebounds, buyers can be in an even more powerful position when the market shifts back to a more lopsided sellers market. 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. Nationwide, an increasing number of firms have downgraded their forecasts and predict U.S. home prices will continue to fall in 2023, Fortune has reported. Cache County Housing Market Trends. Wood, the Ivory-Boyer Senior Fellow at the University of Utahs Kem C. Gardner Policy Institute, detailed his forecast report commissioned by the Salt Lake Board of Realtors, explaining why he still feels optimistic for real estate even if 2023 wont be a year of celebration.. 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. Yeah, thats a valid point, Wood replied, drawing laughs from the crowd. It is equally impressive to see that the unemployment rate remained at a very low level even as the state added over 52,400 people to the workforce. Several people claim that hedge funds, investors, and cash buyers are to blame for this lopsidedness. The time to purchase your primary residence is today and has almost always been today. The median sale price for a house in West Valley City was $436,500 in September 2022, representing a 2.9% increase in year-over-year comparisons. Still seemed achievable. The pandemic housing frenzy was still very much alive fueled by low, 3% interest rates, short housing supply, and fear of missing out driving both sellers and buyers to the market. Economists, consulting firms and other experts all have varying forecasts when it comes to the degree to which home prices will constrict. Heres what volatile mortgage rates are doing to your purchasing power, Stuck between rent hikes and high home prices, this family is scraping by to afford a home, still cant afford to buy something at a significantly lower quality, How the housing market is making boomers richer and millennials poorer, how many other Utahns the market has priced out, 79% of Utah households couldnt afford the states median priced home, Why two housing experts disagree on how much Utah home prices will drop in 2023, National Association of Realtors chief economist Lawrence Yun, 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. Therefore, although Utah home prices may decline in the coming months, the Utah housing market should remain relatively strong and correct itself for more sustainable growth. The direction and pace at which home prices are changing are indicators of the strength of the housing market and whether homes are becoming more or less affordable. There were only 31.8% of homes that had price drops, up from 10.0% of homes in January last year. According to Realtor.com data, the current median days listed in Utah is 52, the highest since the onset of the pandemic, but still a ways away from pre-pandemic figures. The median price of a home in the United States is currently $518,200. Half of the country may experience small price gains, while the other half may see slight price declines., Copyright 2023 Deseret News Publishing Company. We dont have that.. The number of newly listed homes was 1,954 and up 1.4% year over year. The Midwest, he said, will likely see minimal price increases.. Next came Sacramento, Las Vegas, Phoenix, and Tampa. Thank you for registering with FastExpert. Additionally. 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. This trend continued through the pandemic resulting in record-high home prices and rental rate growth. After the next seven months, the median price. 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%. of $518,200. Gone are the days of brutal competition. The demand is causing local buyers to cut corners by foregoing home inspections and appraisal contingencies just to beat the competition. Windermere Foundation However, because of the growing number of migrants in the state, Utah is now faced with what experts say is a severe imbalance in its housing market. Matthew has over 30 years of professional experience both in the U.S. and U.K. Areas of Utah State are also referred to as Northern Utah, SLC, Wasatch Range, and Park City. Property values will likely decline over the next 6 to 12 months and then flatten in the Utah housing market. Oakland Real Estate Market: To Invest or Not to Invest? Should You Invest in the Phoenix Housing Market in 2020? So, while Utahs real estate market is experiencing home prices falling similar to the Nation over this past month, the trend in Utah for housing prices has been an increase. The latest migration analysis is based on a sample of about two Given that interest rates more than doubled in less than a year, its impossible for there not to be an impact on the housing market. I like the word contraction better than collapse, said Jim Wood, director of research and science and the Ivory-Boyer senior fellow at the Kem C. Gardner Institute. It has been one of if not the most competitive markets in the US in 2021. From peak-to-trough, he expects prices to decline by a percentage somewhere in the mid to low teens, depending on interest rates. Windermere Search AppSite Map, 2023 Windermere Real Estate Services Company / All rights reserved / Terms/Privacy / Feedback / Site Map. When he thinks about what his parents life was like in the same window of time in their lives, he said it blows his mind. The market was suddenly plunged into ice cold water when the Federal Reserves war with record levels of inflation sent mortgage rates skyward, and the mask that helped drive home prices so high suddenly lifted. However, despite the increased inventory in the past months, there were only three months of housing supply available in September 2022, still a long shot away from the five to six months required for a balanced market. He has a natural inclination to the arts and creatives. Sellers are reducing prices as homes stay on the market longer. The bull market that has been in place for quite some time appears to have lost its momentum. High-cost areas like San Francisco, he said, will see a 15% price decline. Thats a good thing, because they were overpriced anyway, right? Perry said. Comparatively speaking, I make more money than my parents combined income at my age and still cant afford to buy something at a significantly lower quality than what they were able to purchase at that same age, Branca said. Of all the major U.S. metros, Miami was the most searched for destination among homebuyers looking to relocate between Nov '22 - Jan '23. The lights shut off. 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. Forecasted home price change: +8.5%. The best way to describe it, he said, is an abrupt contraction thats had a dramatic effect on all aspects of the market, but especially on homebuilding, which he and Eskic worry will exacerbate Utahs housing shortage long term. Its falling off faster than we thought it would.. And creatives and contact top-rated agents in your area, please dont hesitate to contact Windermere. Likely to enjoy very good returns this report my personal information said, will likely over! The pandemic resulting in record-high home prices will drop 9 % year over year causing! Hes predicting Utah home prices and rental rate growth have kept many out of reach of predict! 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