Many markets tend to cool off during the end of the fourth quarter and into the first quarter. However, Salt Lake County had a brisk start to the year, seeing a rise in house prices with competition being more fierce over what remains.
A Promising Start to 2022 for Salt Lake County
The first quarter can be a time where things are slow to resume. Many are not looking to get a new home right at the beginning of the new year, with many focusing on buckling down and reigning in spending after the loose wallets of the holiday season. All of this combined usually makes January and February slow months for sales, with some markets seeing a dip in home values. This was not the case for Salt Lake County.
Salt Lake County saw brisk business being done, with many people competing fiercely over the homes on the market. Unlike markets in the Midwest and Northeast, where snow and gloomy weather can drive away buyers, the colder climate hasn’t seemed to deter potential homebuyers in Salt Lake City. Instead, it seems to be thriving, and is even projected to be the leading housing market for 2022. Here are some numbers to compare previous years to the current, so you can best predict how the year will go and how to go about your real estate business.
The Median Sold Price
Salt Lake County experienced what nearly every market across the U.S. did, which is a serious rise in house prices. This is great news for those selling homes, as even a delayed listing simply means a higher price as months go on. The real ramp up can be seen by comparing the prices of the first quarter over the last three years. Q1 of 2020 saw the median sold price at about $425,000.
This amount rose to $499,900 in the first months of 2021, right in the midst of the COVID Pandemic. However, the biggest jump is between Q1 2021 and Q1 2022, where the median sold price was up to a shocking $610,000. This is a growth of nearly 23 percent. Even compared to Q4 of 2021 the median sales price rose by almost 9% in one quarter. With this, it’s quite safe to say that the demand for homes in Salt Lake County has been higher than ever.
The Total Number of Homes Sold
There is always a decrease in the number of homes sold between Q4 and Q1 of the following year. Q4 of 2021 saw 3,186 homes sold in Salt Lake City. Q1 of 2022 only sold 2,141 homes by comparison. However, comparing that to the 2,468 homes sold in Q1 of 2020 and 2,460 homes sold in Q1 of 2021, it is only a slight decline.
Some might be nervous that demand could be petering out, but it is important to remember, when making this comparison, that only 5.7 million homes have been built in the entire US from 2009-2019. That number is miniscule compared to the 20 million homes built each year from 1950-2009. People have to live somewhere, and as long as home ownership is the expectation in the US, people will continue to compete for homes.
The Median Days on the Market
The median number of days on the market for Q1 of 2022 is around six days. This is actually a sharp decline from the 10 days of Q4 2021. This indicates the strong demand for homes is still present and that there are still plenty of driven buyers. These numbers indicate an especially demanding market compared to the 26 days on market for Q1 2020.
The Mortgage Rates
The mortgage rates in Salt Lake County are around 4.41% for a fixed 30-year loan. This is a rise from early rates of 3-4%. Mortgage rates are still historically low in comparison to previous years, and as long as buyers know that, they will seek to take advantage of them. What this means for sellers is that buyers will likely be prodded on by the possibility of further rises to mortgage rates. In turn, they will be more willing to settle to lock in those really beneficial rates before they’re gone for good.
The Overall Future of the Market
Q2 for 2022 will likely continue to have fierce competition in Salt Lake County. Many are still looking for housing solutions, and with rent on the rise in many areas, a mortgage payment on a home you own seems like the logical solution. Spring and summer typically see more houses coming on the market, but since the people who live in these homes have to move somewhere, it is likely just going to be a rotating basis of who is buying what kind of homes. Some homeowners will be expanding for growing families, while older homeowners may be downsizing from those large homes to ranches or other simple living options.
Sellers will continue to have a large control of the market. There are no current indicators that home values will start to drop, and until they do, sellers can have their pick from the cream of the buyer crop. As a buyer, it is important to know that you are competing against other very motivated buyers and that the timeline for settlement is much shorter than in previous years.
What this means for buyers is that it is vital that buyers and sellers discuss the market conditions prior to moving forward with a move. Buyers need to have a clear understanding of how to prepare and then what a winning offer looks like in this market. Sellers need to ask their agent about their options, especially if they need the funds from the sale of their current home.
Contingencies are rarely accepted, so what are the other options for a seller who wants to buy? There are some bridge loan-type products as well as rent backs and other options. Again, call me to discuss the details of this market and how to make it work in your favor.