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Many nature lovers think Salt Lake City, Utah, is the perfect place to live. Actually, it's internationally known for its varied and attractive outdoor recreation opportunities.
The city also has a beautiful and charming mountain climate that attracts many people, especially retirees looking for a relaxing destination to spend their golden years.
Considering all these benefits, many homebuyers and real estate investors wonder if purchasing a property in Salt Lake City is a good idea. However, it's crucial to consider different aspects before making a decision.
Luckily, here's all the information you need to know if this beautiful city is the ideal destination to invest your hard-earned money. Read on to learn about the latest housing market trends, key statistics, experts' predictions, and more.
Salt Lake City Housing Market Trends
According to Redfin, Salt Lake City has remained competitive despite major fluctuations in this year's first quarter.
In April 2023, property values dropped compared to last year's figures. However, the median home price is slightly higher than in 2022.
What does it mean? Is the Salt Lake City housing market likely to crash soon? Is it a good idea to buy a home there? Here are more details on the latest real estate market trends.
Median Sale Price
Redfin's latest reports showed that the median sale price for all home types in Salt Lake City fell by 16.0% from April 2022. Housing units sold for a median price of $500,000 in April of this year.
Compared to March 2023 figures, the median sale price also fell from $539,950. In January and February, the median home price in this city was $517.00 and $514,750, respectively.
Housing Demand
April 2023 reports also showed that the amount buyers pay for housing units in Salt Lake City is often lower than the listing price.
The latest data revealed that around 36.2% of houses sold above the asking price. That's a drop of 35.0% year over year.
Meanwhile, 30.5% of housing units had price drops in April, which means 10.6% more homes sold below the amount that owners set when listing them.
Homes Sold
According to Redfin's latest data, 163 housing units were sold in Salt Lake City in April 2023, which accounts for a 34.8% year-over-year drop. In 2022, 250 homes were sold in this destination.
However, the number of homes sold in April of this year was considerably higher than in January (85), February (126), and March (154).
Housing Inventory
Realtor.com's latest reports say there are 904 homes for sale across 35 neighborhoods in Salt Lake City.
Median Days on the Market
Redfin's reports also showed that it's taking about 17 more days to sell a house in Salt Lake City. The median days on the market reported in April 2023 was 24.
In April of last year, residential properties spent only seven days on the market before going under contract.
However, the latest median days on the market is the lowest since September 2022. In fact, homeowners are selling properties 50 days faster than in February of this year.
Foreclosures
SoFi recently issued a list ranking each state by its foreclosure rate. Utah earned the 28th spot.
This state has 1,133,558 homes but only reported 175 units going into foreclosure in March 2023. As a result, Utah has a foreclosure rate of just one filing for every 6,477 residential properties.
Factors that Could Affect the Salt Lake City Real Estate Market
Housing markets are often affected by various social, governmental, and economic factors, from the city's unemployment rate to local legislation. Find more information about the main ones below.
The City's Economy
In Salt Lake City, healthcare services drive the economy. However, government, transportation, trade, and utility industries also play a key role in this city's development.
According to the US Bureau of Labor Statistics, Salt Lake City had an unemployment rate of 2.5% in March of this year, which is slightly lower than in February.
These factors make the city's economy robust and prosperous, which can also influence the real estate market.
In general, a city, state, or country with a healthy economy usually has a solid housing market, as people with stable jobs and income often invest in real estate properties.
Government Policies
The local government's policies and regulations can also affect the real estate market. Overall, legislation often influences housing demand and prices.
Tax deductions, subsidies, and credits can increase demand for homes in a city, for example.
Demographics
The composition of the city's population also defines housing demand and prices. People's age, race, gender, income, and migration patterns can show different real estate market trends.
As mentioned, Salt Lake City is an attractive destination for retirees. In addition, 0.53% of homebuyers in other US metros wanted to move to this city between February and April of this year.
If more people move to Salt Lake City, the demand for housing increases, which also drives prices up and inventory down.
Mortgage Interest Rate
Interest rates are part of the main factors impacting the real estate market since they make acquiring a loan to buy a property more or less accessible.
A person's ability to buy a home greatly depends on the country's interest rates.
Overall, the lower the mortgage interest rates, the higher the demand for housing units. However, they have reached record highs in recent years.
In May, the mortgage interest rate for a 30-year, fixed-rate loan averaged 6.39%. However, experts believe they'll continue to rise as the Fed struggles to control inflation.
Do Experts Predict a Potential Real Estate Market Crash in Salt Lake City?
Based on the country's latest economic updates, many believe that Utah's housing market could crash soon, which would also affect the real estate sector in Salt Lake City and other destinations.
However, experts are more optimistic, as most believe that the Salt Lake City housing market won't crash but rather experience a slowdown.
In addition, economists with extensive experience in the real estate market have pointed out five reasons why a crash is unlikely to impact the city. These are:
Low Housing Inventory
Throughout the United States, the housing inventory is still too low. Earlier this year, the National Association of Realtors said the country had a 2.9-month supply of homes.
Besides showing that buyers don't have enough power to bid up home prices, this fact also proves that the real estate market won't crash soon, as it often happens when inventory is excessively higher than demand.
More New Buyers
Changes in demographics around the country are also bringing more potential homebuyers to Salt Lake City.
According to experts, the demand remains high in several groups, including millennials in their prime buying years who are looking for the perfect house to live in with their families and migrants who want to purchase their own properties.
Low Supply of Newly Built Homes
There's a lack of supply of newly constructed houses. Even if home builders start building more properties, it won't be enough to meet the current demand. As a result, the inventory will remain low.
Fewer Foreclosures
A few years ago, the national housing market was full of foreclosures. However, most homeowners have more equity in their residential properties and stronger finances, so the number of foreclosure filings has fallen.
Stricter Lending Criteria
In the mid-2000s, borrowers were not asked to meet strict requirements to get a loan. However, the lending criteria have changed.
Now, lenders set stricter criteria, which means people must have an excellent credit score and meet other requirements to get a loan.
In other words, there's no artificial buying power as in 2007. Therefore, housing demand and prices remain unchanged.
Salt Lake City Housing Market Statistics
The following statistics can give you more information about the Salt Lake City housing market to help you make a better investment decision.
- According to Redfin, the sale-to-list price ratio was 100.5% after a 4.3% drop compared to last year's figures.
- Redfin awarded a compete score of 66 to Salt Lake City. That means the local real estate market is somewhat competitive.
- In Salt Lake City, hot homes go pending in less than a week and sell for around 2% above the list price.
- The city's average housing units go pending in 27 days, selling for around the asking price.
- According to Realtor.com, the median listing price for a home in Salt Lake City is $599,000. However, housing units sell for $471,4000 (median sold price).
- SoFi said that Carbon, Tooele, Box Elder, Juab, and Utah had the highest foreclosure filing rate per household in March 2023.
- Realtor.com also showed that the April median listing price per square foot was $355.
- Average home prices range from $38,000 to $17 million across Salt Lake City neighborhoods, Realtor.com said.
- Utah added 43,300 jobs over a year at a 2.6% annual rate, according to a report by Matthew Gardner, Windermere Real Estate Chief Economist.
- Home sales fell by almost 35% in Salt Lake City, UT.
- The average rent in Salt Lake City ranges from $1,300 to nearly $3,000, depending on the type of housing.
Housing Market Predictions by Experts
Do you still have doubts? Do you want to know what experts think about buying a home in Salt Lake City, UT? Here are the most important predictions for the local real estate market.
A Drop in Home Sales
Experts believe home sales will fall across Utah (UT), Salt Lake City included, as mortgage interest rates rise.
Residents and newcomers won't be interested in buying housing units because they'll be less affordable if interest rates rise too much.
Lower Housing Inventory
However, experts think the housing demand is still high enough to keep inventory low.
Highest Mortgage Interest Rates
As mentioned, analysts believe that the Fed will announce another increase in interest rates to face rising inflation, which directly impacts the housing market.
Fall in Home Prices
If higher mortgage interest rates make homes look less affordable, demand will drop. Consequently, housing prices will fall as owners try to find potential buyers.
Salt Lake City Housing Market Forecast
What are experts saying about the Salt Lake City housing market? What's on the horizon?
While Utah's housing market has experienced significant growth in the past two years, a few cities are still experiencing fluctuations.
However, experts believe the Salt Lake City housing market is strong enough to face major changes. Additionally, analysts believe that foreclosures will continue to fall and demand will continue to grow due to the shortage of housing units.
A few experts predict home prices will decline this year, but it greatly depends on interest rates.
Meanwhile, other analysts expect the local real estate market to continue growing. Zillow says the future of the real housing market is positive throughout Utah.
The Final Verdict
Salt Lake City, UT, has attracted many potential homebuyers for years. Most move to the city to enjoy its natural wonders and beautiful mountain climate. However, this destination offers many other benefits.
Although the local housing market has experienced fluctuations, there are still plenty of opportunities for homebuyers and real estate investors.
Frequently Asked Questions
Is Salt Lake City a Buyer's Market or a Seller's Market?
Since housing supply is higher than demand, Salt Lake City is considered a buyer's market. In simple terms, homebuyers have more bargaining power, so they can bid up prices.
Is It Cheap to Buy a Home in Salt Lake City?
While home prices in Salt Lake City are lower than in other destinations, they're higher than the national average home price, which is around $408,000, according to Redfin.
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