More buyers than homes creates Utah's hot housing market
Salt Lake City —
(KUTV) The Utah housing market is on fire, even as we head into what is traditionally a slow season in the real-estate market. Third-quarter sales statewide were up 15 percent year over year and prices are steadily rising.
The biggest news is that Utahns whether planning to buy, sell or stay in place are on far more solid ground today than they were this same time last year.
Once a top state for underwater mortgages, Utah is now close to the bottom with equity rising at a fairly rapid rate. The national average for homes severely underwater according to RealtyTrac is about 13 percent. Utahn's still underwater after the great recession is now at about 8 percent, though local realtors who watch the numbers believe it's closer to 4 percent with how quickly home prices are rising
Dave Robison, President of the Salt Lake County Board of Realtors, has seen a massive shift in the housing landscape over the last five years.
"It's awesome! It's the craziest market I've seen in years" he said. Robison believes the Utah housing market "is on solid ground" noting that "we have gone from a median price range of $190,000 and got up $80 - $90,000" The median home price was $250,000 thousand before the crash, $190,000 at the bottom and now sits just shy of $280,00 in the third quarter of 2015.
While the new high is higher than where the slide started, Robison says it's a different kind of high.
"All of our demand right now is actually organic."
In the days leading up to the housing crash, much of the demand was built on investors, not families.
"Our population is growing at a faster rate than our actual housing supply. We have an awesome economy, so it is not like back in 2006" when investors were moving the market artificially.
Right now homes are selling fast on average, 48 days down from 62 days in the third quarter of 2014.
Kale Snyder and her husband have lived in West Jordan for eight years. They started house shopping two weeks ago. They were touring a Candlelight model home in South Jordan Friday morning. They don't have any fears jumping back into the house noting that they "are buying high and selling high" and "It all kind of works out" in the end.
The Snyder's are looking to build a bigger house, looking for "a big area where our family can get together easily without being separated." The Snyder's plan to build in the South Jordan - and they're not alone. The area is booming right now with new builds and homes selling like hotcakes, new or pre-owned.
Not everyone can afford a single-family home in the current market and that's why town homes and condo sales have jumped 36 percent year over year.
Single-family home buyers in Utah are now largely two income households. It's what is needed according to Robison, to keep up with prices and a growing population.
Utah's population has soared along with home prices.
"We have 20 percent more demand than last year we have 20 percent less inventory than last year and we are still expected for next year to be short 2000 households." Botttom line- there are more buyers than homes in Utah right now.
The only downside to buying right now is the uncertainty in the mortgage rate market, there is word the rates could get bumped up in the near future. Robison says a point rise won't effect housing prices but it will change your bottom line if you're buying. A point increase means a $300,000 budget gets bumped down to $260,000 or even $240,000.