Q3 2022 Utah Real Estate Market Update

The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

Utah’s economy continues to add jobs. The 53,600 jobs created statewide over the past year represent a growth rate of 3.3%. The counties covered by this report added more than 40,000 new jobs over the past year, which is a growth rate of 3%. The state’s unemployment rate in August was 2%, which is marginally above the all-time low of 1.9% reported in April of this year. The labor force continues to expand, suggesting that the region expects economic growth to remain strong. Even though the state has seen a modest decline in the pace of job growth, the numbers are still very impressive.

Utah Home Sales

In the third quarter, 7,134 homes sold. This was 31.6% fewer sales than a year ago and down 16.1% compared to the second quarter of this year.

Year over year, sales fell across the board. Sales in all markets covered by this report were lower than in the second quarter of 2022 as well.

Inventory levels continue to grow, with the average number of homes for sale in the quarter 149% higher than a year ago and up 79% from the second quarter of this year.

Buyers, who seemed to ignore rising mortgage rates in the second quarter, are now feeling the impact of higher financing costs and have taken a pause.

Utah Home Prices

The average home sale price in the third quarter was up 5.9% from a year ago to $627,503. However, prices fell 5.7% compared to the second quarter of this year.

Median listing prices in the third quarter were down across the board. Sellers appear to be coming to terms with the fact that the remarkably buoyant market we’ve experienced since the start of the pandemic has now ended.

All areas contained in this report except Morgan County had higher sale prices than a year ago. Compared to the second quarter of this year, only Wasatch County had higher sale prices.

Although the data suggests that a market correction has started, I don’t find this terribly troubling. Homeowners have seen a remarkable run-up in home values over the past couple of years. It was only a matter of time before the market reverted back to a more sustainable pace of price growth.

A map showing the real estate home prices percentage changes for various counties in Utah. Different colors correspond to different tiers of percentage change. Morgan County is in the -10.6% to -6.1% range. Weber, Davis, Salt Lake, and Wasatch County have a percentage change in the 3.2% to 7.7% range, and Utah and Summit are in the 7.8%+ range.

A bar graph showing the annual change in home sale prices for various counties in Utah from Q3 2021 to Q3 2022. Utah County tops the list at 12.3%, followed by Summit at 9.1%, Salt Lake at 7.5%, Weber at 6.7%, Davis at 5.8%, Wasatch at 4%, and Morgan at -10.3%.

Mortgage Rates

This remains an uncertain period for mortgage rates. When the Federal Reserve slowed bond purchases in 2013, investors were accused of having a “taper tantrum,” and we are seeing a similar reaction today. The Fed appears to be content to watch the housing market go through a period of pain as they throw all their tools at reducing inflation.

As a result, mortgage rates are out of sync with treasury yields, which not only continues to push rates much higher, but also creates violent swings in both directions. My current forecast calls for rates to peak in the fourth quarter of this year before starting to slowly pull back. That said, they will remain in the 6% range until the end of 2023.

A bar graph showing the mortgage rates from 2020 to the present, as well as Matthew Gardner's forecasted mortgage rates through Q4 2023. After the 5.62% figure in Q3 2022, he forecasts mortgage rates continuing to climb to 6.7% in Q4 2022, 6.55% in Q1 2023, 6.35% in Q2 2023, 6.15% in Q3 2023, and 5.60% in Q4 2023.

Utah Days on Market

The average number of days it took to sell a home in the counties covered by this report rose ten days compared to the same period a year ago.

Though homes sold fastest in Salt Lake County, average market time rose in all counties covered by this report year over year. Days on market was also higher in every county compared to the second quarter of this year.

During the quarter, it took an average of 33 days to sell a home in the region. Market time rose 15 days compared to the second quarter of 2022.

Rapidly rising inventory levels and mortgage rates have put the brakes on the Utah housing market.

A bar graph showing the average days on market for homes in various counties in Utah for Q3 2022. Salt Lake County has the lowest DOM at 27, followed by Davis at 28, Utah at 30, Weber at 31, Morgan at 34, Wasatch at 37, and Summit at 41.

Conclusions

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Although Utah’s economy remains strong, the housing market is now feeling the effects of mortgage rates that were 2.7% higher than in the third quarter of 2021. With rates expected to rise even more in the fourth quarter before hopefully levelling off in early 2023, I anticipate that prices will decline further from their current levels. While this may seem like a dire situation to some, homeowners have seen their equity leap since the pandemic started. Though the expected drop in home values may be disconcerting for owners, it’s necessary for the market to return to more realistic conditions. I expect that some would-be sellers will decide to wait until the market stabilizes before listing their homes, while others will decide not to sell at all. This will limit how far inventory levels will rise. As such, I don’t see the market reaching saturation.

A speedometer graph indicating a balanced market, leaning toward a seller's market in Utah in Q3 2022.

The Utah housing market is in a period of reversion that will bring it back to balance, which is actually positive for the long-term health of the market. Buyers have more choice, but many will wait until financing costs and the market start to stabilize before they resume their search for a home. We still aren’t in a buyer’s market, but we are certainly getting closer to balance. As such, I have moved the needle far closer to the middle.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

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.

The post Q3 2022 Utah Real Estate Market Update appeared first on Windermere Real Estate.

Q2 2022 Utah Real Estate Market Update

The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

The Utah economy remains buoyant. Although the pace of job growth has tapered somewhat from 2021, jobs continue to be added faster than the long-term average. Over the past 12 months, the state has added 55,400 jobs, representing a growth rate of 3.4%. The counties covered in this report added almost 53,000 new jobs over the past year, representing a growth rate of 4%. The state’s unemployment rate in May was 2%, which is marginally above the all-time low of 1.9% in April of this year. The labor force continues to expand, suggesting that the region expects economic growth to remain strong. All in all, a very impressive situation.

Utah Home Sales

In the second quarter of 2022, 8,501 homes sold, which was a drop of 14.4% year over year. Sales were 30.9% higher than in first quarter of the year.

Year over year, sales rose in the small Morgan County area but fell in the rest of the markets included in this report. Conversely, sales rose across the board compared to the first quarter, with impressive growth in Morgan, Davis, Utah, and Salt Lake counties.

Inventory levels, which had been remarkably low, rose 206.2% from the first quarter of the year. This clearly had a positive effect on the market as more choice for buyers led to more sales.

Buyers appeared to shrug off the fact that mortgage rates rose more than 1.5% in the quarter, which suggests they still believe owning a home is a solid investment.

Utah Home Prices

Even with more homes on the market, prices continued to rise. Home prices rose 15.4% year over year to an average of $665,697, and they were 4.2% higher than in the first quarter of 2021.

I have started watching list prices, as they will be a leading indicator of whether the market is starting to feel the impacts of declining affordability due to rising financing costs. In the second quarter, the median list price in the region dropped 2.2%, but it rose in Morgan, Davis, and Salt Lake counties.

All areas contained in the report except for Wasatch County saw sale prices increase by double digits compared to a year ago. Compared to the first quarter of this year, prices were higher in every county other than Summit.

Higher financing costs combined with declining affordability may have started to slow the rapid pace of appreciation we’ve seen over the past two years. This is nothing to be concerned about; rather it suggests that the market is starting to return to some sense of normalcy.

A map showing the real estate home prices percentage changes for various counties in Utah. Different colors correspond to different tiers of percentage change. Wasatch County is the the only county with a percentage change in the 6.5% to 9.4% range, while Weber, Davis, Salt Lake, Utah, and Summit are in the 15.5% to 18.4% change range. Morgan County is the only county in the 18.5% + change range.

A bar graph showing the annual change in home sale prices for various counties in Utah from Q2 2021 to Q2 2022. Morgna County tops the list at 18.7%, followed by Weber at 18.4%, Salt Lake at 18%, Utah at 16.8%, Davis at 16.4%, Summit at 16%, and Wasatch at 6.7%.

Mortgage Rates

Although mortgage rates did drop in June, the quarterly trend was still moving higher. Inflation—the bane of bonds and, therefore, mortgage rates—has yet to slow, which is putting upward pressure on financing costs.

That said, there are some signs that inflation is starting to soften and if this starts to show in upcoming Consumer Price Index numbers then rates will likely find a ceiling. I am hopeful this will be the case at some point in the third quarter, which is reflected in my forecast.

A bar graph showing the mortgage rates from 2020 to the present, as well as Matthew Gardner's forecasted mortgage rates through Q2 2023. He forecasts mortgage rates continuing to climb to 5.9% in Q4 2022, then tapering off to 5.58% in Q1 2023 and 5.53% in Q2 2023.

Utah Days on Market

The average time it took to sell a home in the counties covered by this report dropped two days compared to the same period a year ago.

Homes again sold fastest in Davis County, and every county except Summit and Wasatch saw average time on market rise compared to a year ago. The greatest drop in market time was in Summit County, where it took 19 fewer days to sell a home.

During the second quarter, it took an average of 17 days to sell a home in the region. Not only did market time fall year over year, but it took 8 fewer days for homes to sell compared to first quarter.

The market remains very competitive and, as mentioned earlier, appears to not yet be impacted by higher mortgage rates.

A bar graph showing the average days on market for homes in various counties in Utah for Q2 2022. Davis County has the lowest DOM at 11, followed by Salt Lake at 12, Utah and Weber at 14, Morgan at 22, Summit at 23, and Wasatch at 25.

Conclusions

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

The number of homes for sale in Utah has risen significantly and buyers are absorbing the additional supply. That said, higher inventory levels are forcing sellers to be a little more competitive than they were, as demonstrated by declining median list prices in several areas. I would contend that the market is not headed for any sort of correction; rather it has started to trend back to some sense of normalcy. This may be concerning to those who have become accustomed to the frenetic pace the market has experienced since the start of the pandemic, but it really is nothing to worry about.

A speedometer graph indicating a medium seller's market in Utah for Q2 2022.

Sellers still have the upper hand and well-positioned, appropriately-priced homes continue to attract significant interest from buyers. Given all the data discussed in this report, I have left the needle in the same position as the last quarter. Although the market still favors sellers, a shift may be on the way that would lead us toward a more balanced market.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

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.

The post Q2 2022 Utah Real Estate Market Update appeared first on Windermere Real Estate.

Q1 2022 Utah Real Estate Market Update

The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

The Utah economy continues to impress, with total employment up 3.8% year over year. Of greater significance: current employment levels are now 78,600 higher than the pre-pandemic peak. The counties covered by this report added almost over 48,400 new jobs over the past year, representing a growth rate of 3.7%. Thanks to the state’s robust economy, the unemployment rate dropped to 2%, which is the lowest level recorded since the Labor Department started keeping records in 1976. Moreover, this remarkably low level of unemployment comes while the labor force rose above the 1.7 million mark—a level never before seen.

Utah Home Sales

In the first quarter of 2022, 6,493 homes were sold, which is a drop of 7.5% year over year. There were 29.1% fewer sales than in the fourth quarter of 2021.

Year over year, sales rose in four of the seven counties contained in this report, but fell in the balance of the region.

Inventory levels remain well below the average, which is clearly limiting sales. The number of homes for sale was down 30.9% from the previous quarter, and down 5.6% from the same period a year ago.

Pending sales, which are an indicator of future closings, fell 9.2% from the final quarter of 2021, suggesting that second quarter closings may remain below average.

Utah Home Prices

With more demand than supply, it wasn’t surprising that home prices picked up. Year over year, prices rose 19.5% to an average of $639,131. Prices were 6.1% higher than in the fourth quarter of 2021.

Compared to the final quarter of last year, prices rose in all counties other than Morgan, with Summit County jumping more than 20%.

All areas contained in the report except for Morgan County saw prices increase by double digits. The pullback in Morgan County is not a concern given that it is a very small market.

Mortgage rates increased in the first quarter but, as there is normally a lag between rising financing costs and their impact on sales or prices, it’s too early to tell if the market will experience any slowing. We will have a better idea in the second quarter report.

A map showing the year-over-year real estate market percentage changes in various counties in Utah for Q1 2022.

A bar graph showing the annual change in home sale prices for various counties in Utah from Q1 2021 to Q1 2022.

Mortgage Rates

Average rates for a 30-year conforming mortgage were 3.11% at the end of 2021, but since then have jumped over 1.5%—the largest increase since 1987. The surge in rates is because the market is anticipating a seven- to eight-point increase from the Federal Reserve later this year.

Because the mortgage market has priced this into the rates they are offering today, my forecast suggests that we are getting close to a ceiling in rates, and it is my belief that they will rise modestly in the second quarter before stabilizing for the balance of the year.

A bar graph showing the average rates for a 30-year conforming mortgage, plus Matthew Gardner's mortgage rate forecasts for Q2 2022 through Q1 2023.

Utah Days on Market

The average time it took to sell a home in the counties covered by this report dropped eight days compared to the first quarter of 2021.

Homes again sold fastest in Davis County, and market time dropped in all but three counties compared to a year ago. The greatest decline in market time was in Summit County, where it took 31 fewer days to sell a home.

During first quarter, it took an average of 24 days to sell a home in the region. Market time fell year over year. It also took 4 fewer days for a home to sell than in the final quarter of last year.

With days on market dropping across the board compared to the prior quarter, it’s clear that there is significant demand for the few homes that are available.

A bar graph showing the average days on market for homes in various counties in Utah during Q1 2022.

Conclusions

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

In last quarter’s Gardner Report, I suggested that home prices would continue to rise in 2022 but at a modestly slower pace than in 2021. Although it would be easy to assume that the jump in mortgage rates will cause price growth to slow more significantly, I am not sure whether that will be the case. As tight as the labor market is, rising incomes will likely offset most of the potential pain from higher mortgage payments. The region clearly heavily favors sellers, and I don’t expect this to change this year. While the full impact of rising mortgage rates has yet to be felt, I don’t believe it will be overly burdensome for buyers.

A speedometer graph indicating a seller's market in Utah during Q1 2022.

Given all of this, I have left the needle in the same position as last quarter. Though the data points to another very solid year for housing, I am waiting for the spring figures to determine if rising mortgage rates will cause any slowing to this supply-starved market.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

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.

The post Q1 2022 Utah Real Estate Market Update appeared first on Windermere Real Estate.

Q4 2021 Utah Real Estate Market Update

The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

Utah closed 2021 strongly with solid employment gains and an annual growth rate of 4.7%. It has been almost a year since the state recovered all the jobs lost due to the pandemic—a remarkable statistic. Even more impressive is that the employment level is now more than 61,000 jobs higher than before COVID-19 hit. The counties covered by this report have added almost 50,000 new jobs over the past year, representing a growth rate of 3.8%. Such robust growth has driven the unemployment rate down to just 2.1%, a level not seen since the Labor Department started keeping records back in 1976. Utah’s economic growth continues to impress. I believe it could be even better if the number of people in the workforce was rising significantly, which isn’t the case. But all in all, the employment picture is extremely positive.

utah Home Sales

❱ In the final quarter of 2021, 9,158 homes sold, representing a 13.2% drop from a year ago and 11.6% lower than in the third quarter.

❱ Year-over-year, sales dropped in all areas except for Morgan County. Sales slowed in all counties other than Weber compared to the third quarter of 2021.

❱ The drop in sales between the third and fourth quarters doesn’t concern me and can be attributed to seasonal factors. Lower sales compared to a year ago may be due to the number of homes for sale, which was 11.2% lower than in the same quarter of 2020.

❱ Pending sales, which are an indicator of future closings, were down 4% relative to the third quarter, suggesting that sales in the first quarter of 2022 may not rise significantly.

utah Home Prices

A map showing the real estate market percentage changes in various counties in Utah during the fourth quarter of 2021.

❱ Given Utah’s strong economy, it’s not surprising that home prices continue to rise significantly. Year over year, prices rose 17.3% to an average of $602,369. Prices were also .3% higher than in the third quarter of 2021.

❱ Compared to the third quarter, prices rose in Salt Lake, Utah, and Summit counties, but were down in the balance of the market areas.

❱ All areas contained in the report except for Summit and Wasatch counties saw prices rise by double digits. Morgan County’s rise was particularly impressive.

❱ The pace of price growth has slowed, but only very modestly. Whether this was a function of mortgage rates, which started rising in the quarter, is unclear. I expect rates to continue rising as we move through the year, which may have a compressing effect on price growth.

A bar graph showing the annual change in home sale prices for various counties in Utah during the fourth quarter of 2021.

Days on Market

❱ The average amount of time it took to sell a home in the counties covered by this report dropped five days compared to the final quarter of 2020.

❱ Homes sold fastest in Davis County, with all but two counties seeing average time on market drop. Relative to a year ago, the greatest decline in market time was in Summit County, where it took 29 fewer days to sell a home.

❱ During the quarter, it took an average of 28 days to sell a home in the region. Although this is lower than a year ago, it was up 6 days compared to the third quarter of the year.

❱ The modest increase in market time is not very surprising given the frenetic market in 2020. The question is whether the pace of sales will increase as we move into the spring selling season.

A bar graph showing the average days on market for homes in various counties in Utah during the fourth quarter of 2021.

Conclusions

A speedometer graph indicating a seller's market in Utah during the fourth quarter of 2021.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Utah’s rock-solid economy has been a major boost to the housing market. Prices continue to increase at a very impressive pace, but we will have to wait and see if this is sustainable given that mortgage rates are expected to continue rising in the coming months.

My current 2022 forecast suggests that, despite a very modest decrease in the pace of price growth compared to 2021, prices will rise by more than 10% in all the counties in this report. A few may even rise by close to 20%.

To say that it is a seller’s market in Utah would be an understatement. In the coming year, I don’t expect the housing supply to satisfy demand, which will cause prices to rise higher even in the face of rising mortgage rates. As such, I have moved the needle a little more toward sellers.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

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.

The post Q4 2021 Utah Real Estate Market Update appeared first on Windermere Real Estate.

Q3 2021 Utah Real Estate Market Update

The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

The summer months saw continued growth in Utah’s labor market, which had already recovered all of the jobs lost to COVID-19 earlier this spring. The latest data available (August 2021) showed non-agricultural employment 48,100 jobs higher than the pre-pandemic peak. With the healthy growth in jobs, the unemployment rate currently stands at 2.6%, a level that has not been seen since before the pandemic hit. As impressive as the current jobless rate is, it is also worth noting that unemployment continued to fall even as the labor force expanded to a point never seen in the state before. Utah’s economy is currently in great shape, and short of any unforeseeable events, I see no reason why anything would derail the impressive growth the area has experienced.

utah Home Sales

❱ In the third quarter of 2021, 10,356 homes were sold, representing an 18.3% drop from a year ago. This is not really a concern given that during third quarter last year the area was in the midst of a COVID-induced housing boom, which is skewing the numbers. What is more informative was that sales rose 6.9% from the previous quarter.

❱ Year-over-year, sales dropped across the board. However, compared to the prior quarter they rose in all counties other than Salt Lake and Morgan—though the drop in both counties was only seven sales.

❱ The increase in sales compared to the previous quarter was aided by a significant increase in the number of listings in the counties contained in this report, which jumped more than 36% from the second quarter of this year.

❱ Pending sales, an indicator of future closings, were up in all markets other than Salt Lake. The 2.8% increase from the second quarter suggests that sales in the final quarter of the year may continue to show improvement.

utah Home Prices

A map showing the real estate market percentage changes in various counties in Utah during the third quarter of 2021.

❱ With the economy performing extremely well, and mortgage rates holding close to their historic lows, it was not surprising to see sale prices continue to trend higher. Compared to a year ago, prices were up 23.8% to an average of $600,715. Prices also came in 3.8% higher than in the second quarter of this year.

❱ Although Summit County appears to be underperforming, it is worth noting that it is the most expensive county in this report, with an average price in the third quarter of $1.58 million. I am not particularly concerned at the decline since it is likely to be short-lived.

❱ All counties contained in the report except Summit saw prices increase by double-digits relative to a year ago. All counties but Summit also saw impressive gains compared to the previous quarter.

❱ In the second quarter Gardner Report, I suggested that the annual change in home prices was going to soften, which proved accurate. Although price growth remains well above the long-term average, I expect to see the pace of growth continue to slow as we close out the year.

A bar graph showing the annual change in home sale prices for various counties in Utah during the third quarter of 2021.

Days on Market

❱ The average number of days it took to sell a home in the counties covered by this report dropped 21 days compared to the third quarter of 2020.

❱ Homes again sold fastest in Davis County, which was one of only two counties with average sale time below two weeks. Relative to a year ago, the greatest drop in market time was in Summit County, where it took 41 fewer days to sell a home.

❱ During the quarter, it took an average of 22 days to sell a home in the region. Although this is lower than a year ago, it was up 3 days compared to the second quarter of this year.

❱ Rising inventory levels led to more choice in the market, which put slight upward pressure on market time. This is not a concern, and though it might please home buyers, we are still far from a balanced housing market.

A bar graph showing the average days on market for homes in various counties in Utah during the third quarter of 2021.

Conclusions

A speedometer graph indicating a seller's market in Utah during the third quarter of 2021.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Utah’s economy stands on very solid ground. A stable economy and historically low mortgage rates are very stimulative to home buyers. Even though we have seen inventory levels grow and market time rise modestly—both of which favor home buyers—the data in aggregate is still heavily in favor of home sellers. As such, I have moved the needle a little more in their favor.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

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.

The post Q3 2021 Utah Real Estate Market Update appeared first on Windermere Real Estate.

Q2 2021 Utah Real Estate Market Update

The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

Utah’s impressive post-COVID job recovery continues unabated. In the first quarter Gardner Report, I reported that the state had not only recovered all the jobs that were lost due to the pandemic, but employment was continuing to rise. This trend has continued. With 96,400 jobs added over the past year and 14,500 over the past quarter, total employment is now 26,900 jobs higher than the pre-pandemic peak. The only other state in the country that has recovered all the jobs lost due to COVID is Idaho. With a full recovery in the job market, it’s no surprise the jobless rate dropped further to 2.7% in June—its lowest level since March 2020 and the second-lowest rate in the nation; only Nebraska is lower at 2.5%.

utah Home Sales

❱ In the second quarter of 2021, 9,689 homes sold, representing a modest 1.2% increase year over year, and a very significant 42% increase compared to the first quarter of the year.

❱ Sales activity rose in four counties but dropped in three. Summit County saw a massive increase in sales. Wasatch County also saw impressive gains. Sales dropped most in Morgan County, but because this is a very small market I’m not concerned.

❱ What aided the jump in sales from the first quarter was an increase in listing activity. Inventory of available homes rose more than 50% compared to the first quarter. Although this is good news, listing activity is still down more than 55% from this time a year ago.

❱ Pending sales rose across the board compared to the first quarter, with significant increases in Utah, Davis, Salt Lake, and Wasatch counties. With pending sales up more than 30% from the prior quarter, there will likely be solid growth in closed sales in the upcoming quarter.

utah Home Prices

A map showing the real estate market percentage changes for various counties in Utah.

❱ A rock-solid economy and low mortgage rates had buyers out in force. That said, even with supply levels improving, demand is still outpacing supply, which has led to significant price gains. Year over year, the average home price in the region rose 41.8% to $578,648. Prices were 8% higher than in the first quarter of 2021.

❱ Although the data shows remarkable home price growth, the pandemic had a significant impact on housing during the second quarter of last year. As such, I anticipate the yearly change in prices will soften in the third quarter but remain well above the long-term average.

❱ Home price growth was led by Wasatch County, but rose by very significant rates across all the counties contained in this report. Of note is that Summit and Wasatch counties saw average sale prices above the $1 million level in the second quarter.

❱ The takeaway here is that, while the number of homes on the market did improve relative to the previous quarter, there continues to be a shortfall in inventory, which has led prices to rise at a significant pace.

A bar graph showing the annual change in home sale prices for various counties in Utah.

Days on Market

❱ The average number of days it took to sell a home in the counties covered by this report dropped 28 days compared to the second quarter of 2020.

❱ Homes sold fastest in Davis County, with sales occurring in less than two weeks in an additional four counties. The greatest drop in market time was in Summit County, where it took 63 fewer days to sell a home than it did a year ago.

❱ During the second quarter, it took an average of only 19 days to sell a home in the region, which is down 14 days compared to the first quarter of this year.

❱ Days-on-market data provided further proof of the supply/demand imbalance mentioned throughout this report. Unfortunately, I do not see any signs of supply levels rising enough to meet buyer demand.

A bar graph showing the average days on market for homes in various counties in Utah.

Conclusions

A speedometer graph indicating a seller's market in Utah.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Strong economic growth—in concert with persistently low mortgage rates—continues to drive housing demand. Even with the increase in listings in the second quarter, many buyers are frustrated by the level of competition for the homes that are for sale.

It remains, undeniably, a seller’s market, and I have therefore moved the needle a little more in their favor.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

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.

The post Q2 2021 Utah Real Estate Market Update appeared first on Windermere Real Estate.

Q1 2021 Utah Real Estate Market Update

The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

Much like the rest of the nation, COVID-19 had a very significant impact on employment levels in Utah; the state shed 140,000 jobs in only two months. However, I am delighted to report that—as of the end of the first quarter—the region has not only recovered all of the jobs that were lost, but employment levels are now 11,300 jobs higher than the pre-pandemic peak in February 2020. With the recovery complete, at least for the time being, the unemployment rate continues to drop and is currently only 2.9%. At this level, Utah—along with Nebraska, South Dakota, and Vermont—now has the lowest jobless rates of any states in the Union.

utah Home Sales

❱ In the opening quarter of 2021, 6,822 home sales occurred, representing a drop of 4.6% compared to the same period in 2020 and 33.4% lower than the fourth quarter of last year.

❱ Total sales activity rose in Summit, Wasatch, and Salt Lake counties, but fell across the balance of the market covered in this report.

❱ I am not concerned about the lower level of home sales as the cause is directly linked to a shortage of inventory. The average number of listings in the quarter was down 66.8% compared to a year ago and down 35.1% compared to the fourth quarter of 2020.

❱ With such low levels of inventory, it wasn’t surprising that pending sales were down 8.8% compared to the fourth quarter of 2020. This suggests that, unless we see a significant number of homes come online as the spring ends, closings in the second quarter may also be lower.

utah Home Prices

A map showing the real estate market percentage changes in various counties in Utah.

❱ With far more demand than supply, it wasn’t surprising that home prices continued to trend significantly higher. Year over year, the average home price in the region was up 32.6% to $536,024. Home prices were also 4.5% higher than in the fourth quarter of 2020.

❱ When compared to the fourth quarter of last year every county, other than Wasatch (+.7%), experienced very solid price growth.

❱ Price growth was influenced by very significant gains in Morgan and Summit counties, but double-digit increases were seen across the board.

❱ The economics of supply and demand are clearly impacting home values in the region. The question will be how long this pace of growth can continue. The market needs more supply; without it, affordability will continue to drop.

A bar graph showing the annual change in home sale prices for various counties in Utah.

Days on Market

❱ The average number of days it took to sell a home in the counties covered by this report dropped 27 days compared to the first quarter of 2020.

❱ Homes sold fastest in Davis, Utah, and Weber counties. The longest time it took to sell a home was again in Summit County. Unsurprisingly, it took less time to sell a home in all markets than it did a year ago.

❱ During first quarter, it took an average of 33 days to sell a home in the region, down 1 day compared to the fourth quarter of last year.

❱ As suggested earlier in this report, the market is in a state of imbalance, with far more buyers than sellers. As frustrating for buyers as this is, I am afraid that I do not see it changing in the near-term.

A bar graph showing the average days on market for homes in various counties in Utah.

Conclusions

A speedometer graph indicating a seller's market in Utah.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

An economy that has recovered from the COVID-19- induced decline, combined with historically low levels of inventory, have provided a “perfect storm” that continues to benefit sellers.

I was hoping that the spring would see more sellers put their homes on the market, but that has not yet happened. Concerns about listing before everyone is vaccinated, as well as sellers who are likely waiting until they find a home to buy, are keeping many of them sidelined. This has certainly benefitted those who did decide to sell, and it remains a market that heavily favors sellers. As such, I am moving the needle a little more in their favor.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

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.

The post Q1 2021 Utah Real Estate Market Update appeared first on Windermere Real Estate.

Q4 2020 Utah Real Estate Market Update

The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

 

Regional Economic Overview

The recovery in employment following the very significant job losses in Utah from COVID-19 continues to impress. Of the over 144,000 jobs that were lost in the state, all but 7,800 have returned. With the recovery clearly in place, the unemployment rate, which peaked at 10.4% in April, has dropped as jobs have been recovered and now stands at a very respectable 4.3%. In the third quarter Gardner Report, I mentioned I was a little concerned that rising COVID-19 infection rates might curtail the economic recovery, but the impact thus far has been minimal. I am pleased to see new infection rates starting to drop again and hope this trend will continue.

utah Home Sales

❱ In the final quarter of 2020, 10,237 homes changed hands, representing a solid increase of 14.4% compared to the same period in 2019—a great way to close out this unusual year.

❱ Total sales activity rose in all counties covered by this report other than Morgan. The small counties of Summit and Wasatch saw significant gains.

❱ The number of homes for sale in the quarter was 62.8% lower than during the same period a year ago, which likely frustrated buyers.

❱ Pending sales in the fourth quarter were down 26.3% compared to the third quarter. This is due to a lack of homes for sale and seasonality, so I am not concerned.

utah Home Prices

A map showing the real estate market percentage changes in various Utah counties.

❱ The average home price in the region continued to rise in the fourth quarter, with a year-over-year increase of a very impressive 27.6% to $512,894. Home prices were also 18.5% higher than in the third quarter of 2020.

❱ Price growth was again influenced by very significant gains in Wasatch County, where average prices jumped from $681,000 to $1.027 million.

❱ Outside of Wasatch County, every county covered by this report saw double-digit price appreciation compared to the same period a year ago.

❱ Home prices are still rising at very significant rates as the economy recovers, supply limitations persist, and mortgage rates remain attractive.

A bar graph showing the annual change in home sale prices for various counties in Utah.

Days on Market

❱ The average number of days it took to sell a home in the counties covered by this report dropped 24 days compared to the final quarter of 2019.

❱ Homes sold fastest in Davis and Morgan counties. The longest time it took to sell a home was in Summit County. It took less time to sell a home in all markets than it did in the fourth quarter of 2019.

❱ During the fourth quarter, it took an average of 34 days to sell a home in the region, down 6 days compared to the third quarter of 2020.

❱ Market time declined due to growing demand and limited supply. I do not see it dropping by much more, as I hope listing inventory will rise in the spring. However, that is far from certain.

A bar graph showing the average days on market for homes in various Utah counties.

Conclusions

A speedometer graph indicating a seller's market in Utah.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

The region’s housing market continues to perform very well, with substantial demand for the limited number of available homes. This has led to significant increases in home prices. Although this has been a boon for home sellers, affordability issues are increasing.

I believe we will see the number of listings increase in the spring of 2021, which, in concert with modestly rising mortgage rates, should take some of the heat off the market. For now, though, it remains a staunchly seller’s market. As such, I am moving the needle a little more in their favor.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

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.

The post Q4 2020 Utah Real Estate Market Update appeared first on Windermere Real Estate.