Historic real estate market

If you have been actively searching for a home in the Sale Lake Valley, you know well that it is nearly impossible to find something to buy. Should you have the fortune of finding your dream, it won't be long until you discover you are merely one of many buyers bidding against one another for the opportunity to purchase.

Salt Lake leads all metropolitan areas in having competitive offers on newly listed homes. Nearly eight of ten buyers learn they will have to pay over the list price to secure a purchase contract. Many of those winning bids have committed to pay more than the appraised value and initiate their contract by offering non-refundable earnest money.

As of this writing, there are five hundred and thirty-two active listings for sale. While the number of active buyers isn't known, the evidence points to the fact that demand far exceeds the supply on any given day in 2021. There were twenty-seven percent more homes for sale in the last month than in the same month in 2017—a record-setting year. Imagine the stress created when a housing market enters unknown territory with numbers never believed possible.

The demand for housing has dropped the average number of days a home is on the market from thirty-two to six. That is nearly an eighty-two percent decrease! I will tell you the six days is artificially high because many sellers are waiting at least a few days to let offers build-up, expecting the buyers to bid against one another. For a buyer to find a home, they need to be agile enough to act quickly on what is typically a more comfortable purchase decision.

Prices were already reaching unattainable levels for many buyers before what we see today. The average price of a home compared to last year is up to twenty-two percent. Five-hundred and ninety buyers are priced out of a home for every one thousand dollar increase. When buyers bid up homes to fifty thousand dollars over list price, nearly thirty thousand buyers are pushed aside.

That home sale then becomes a comparable for the next appraisal used on future sales. In a red hot market, like we see today, this seems like a never-ending story. No wonder buyers get discouraged, and those dreaming of owning one day feel their opportunity may be lost. It affects sellers as well. Many fear an ability to find their replacement home and stay in place.

An economist would tell you this is basic supply and demand market forces at play. There either needs to be a lessening of demand or an increase in supply. All the predictions are that the demand will continue as Salt Lake maintains its national economies' lead. That leaves us with the supply side.

The best way to grow housing inventory is for local, state, and national elected officials to work with our Home Builder Associations in finding solutions that allow for our growth. When a market effectively meets demand, we preserve the intrinsic values of homeownership. These values create vibrant communities, and why so many others are desiring to call Utah home.