Even though homes are pricier in Utah than nearly anywhere else in the country, buyers do have some advantages, said Jeremy Holmgren, mortgage manager for Zions Bank. More available homes, longer …
Even though homes are pricier in Utah than nearly anywhere else in the country, buyers do have some advantages, said Jeremy Holmgren, mortgage manager for Zions Bank.
More available homes, longer times on the market and more moderate increases in housing prices, Holmgren explained, are giving homebuyers more power in the market.
There’s a lot of motivation for sellers to offer buyers concessions, he said, often in the realm of $10,000 to $15,000 they can use to pay closing costs or buy down their interest rate.
“Most of the contracts we see have some sort of a seller concession,” Holmgren said.
He clarified the market hasn’t fully shifted toward buyers, and is “still, in some ways, a seller’s market,” but recommended people buy now if they can while competition is low.
Here are three reasons Holmgren said the market is shifting and how buyers can use that knowledge to act.
More inventory
As of February, there were 14,084 homes on the market in Utah, according to data from Redfin, an online real estate brokerage that posts data from multiple listing services.
That’s 1,898 more homes than were on the market statewide last February and almost double the number of homes available three years ago.
Inventory is crucial as Utah faces a shortage, but the increase also means more options for buyers and less competition.
New construction permits are also down, Holmgren said, and that could point to “maybe a little bit less appetite to buy a new build.”
That means builders and owners who are selling are having to give concessions, he said, and builders are sitting on a lot of inventory.
More days on market
When Utah’s growth was still close to its peak three years ago, homes typically stayed on the market for less than two weeks, based on Redfin data.
The median days homes stayed on the market in Feb. 2022 was 14, and that dropped to nine in April 22.
Homes now stay on the market about 4 1/2 times as long. The median days on market in February was 64.
How long a home stays on the market indicates how competitive the market is, according to the brokerage service.
The quicker homes go under contract, the more competitive the market is, and the faster buyers need to act in order to compete. The longer homes spend on the market, the more time and control buyers have.
Sellers are incentivized to get homes off the market the longer they stay on, Holmgren said, and more likely to offer concessions.
More moderate price increases
Though housing prices are still high, the growth in cost has slowed since the pandemic-driven boom.
Between February of 2020 and May of 2022, the median housing price increased 64% – an average of about $8,500 a month.
Utah’s typical — or median — home price dropped to around $500,000 two years ago and has mostly stayed steady since.
Statewide, the median home price was $547,700 in February, a 2.3% increase compared to last year at that time.
Previous years saw price jumps as large as 29%.
And fewer homes are selling for more than the listing price – about 21% of homes last month compared to more than half of homes in February 2022 and 22% of homes last February.
Holmgren said less demand from buyers amid higher mortgage rates and economic uncertainties has led to a slower inflation rate for housing prices.
How to take advantage
Though people likely are waiting for interest rates, values or purchase prices to come down, there’s “no reason to wait,” Holmgren said.
“Homes are continuing to go up in value over time, and you don’t want to be in a competitive situation where you may not get the home,” he said.
He always encourages people to buy and start getting equity now rather than face the risks of waiting. People who have the down payment and the needed income can always refinance later, he said.
“You date the rate, and you marry the home,” Holmgren said.
He encouraged people to learn about home-buying programs like down payment assistance and to spend time figuring out what it takes to qualify. They may be able to adjust their debt and get a game plan, he said.
“It’s just education,” he said. “A lot of times, it’s easier than you may think.”
Megan Banta is The Salt Lake Tribune’s data enterprise reporter, a philanthropically supported position. The Tribune retains control over all editorial decisions.
Source: Utah News