All Rights Reserved, What will 2023 bring to the housing market? #UPDATE firms predicting that U.S. home prices will continue to fall in 2023:@FannieMae@Zondahome@JBREC Zelman & Associates@KPMG@GoldmanSachs@MorganStanley@WellsFargo@MoodysAnalyticsTD Bank@CapEconomics@PantheonMacroAmherstING@RedfinYieldstreet. My current forecast is that mortgage rates will trend lower as we move through the year. We also observe a lengthening of the time spent on the market and a decrease in both new listings and sales, which points towards a general slowing down of the Utah housing market. While overvalued does not necessarily mean that a housing market will crash, these markets are at a higher risk of a sharper correction when economic conditions change. So (many have) stopped new construction and consequently weve seen new production just fall off, Wood said. Utahs housing market has a tight supply, and while we may see prices decrease somewhat, its not likely to experience a significant decline in housing values. As a result, average days on market have increased, and sellers are becoming more open to negotiation. At the very least, folks can expect some sort of moderation over the next few years but not a decline. We dont have that.. But by the end of the year, well stabilize and well be flat, Wood said. Hes predicting Utah home prices will drop 9% year over year in 2023. whether homes are becoming more or less affordable. 2.1 months of housing inventory. In addition, while year-on-year figures still show growth, monthly data is beginning to tell a different story of dropping prices, a trend that is expected to continue through the rest of 2022 and into 2023. Even this far into 2022 with the mortgage rate hikes, Utah remains one of the hottest markets. Even as the cost of borrowing falls, home prices in expensive markets will probably fall a bit more to compensate for rates that will likely hold above 6% until early summer. Neither Wood nor Eskic are predicting a catastrophic, 2007-like crash that sent the global economy tumbling into the Great Recession. Some buy-and-hold while others enter the rental market for passive income. What is the housing market like right now? As mortgage rates are at record highs in 20 years by 7.08%. . But what about the increase in interest rates? Thank you for registering with FastExpert. In Utah, housing prices have begun to decline, down from their peak in May, when the median sales price of Salt Lake County homes was $565,600. Yes! That was also a time when the national economy and Utah faced a struggling job market, Wood noted. According to Realtor.com data, the current median days listed in Utah is 52, the highest since the onset of the pandemic, but still a ways away from pre-pandemic figures. Get your free online home valuation in only 2 minutes! South Carolina Housing Market 2023 Report, North Carolina Housing Market 2023 Report. It would slow, but it wouldnt be stopped like it is now.. Shouldnt I wait for mortgage rates to decrease before I buy? The discussion between Eskic and Wood was moderated by Clark Ivory, CEO of Ivory Homes, which is Utahs largest homebuilder. After the next seven months, the median price. At the same time, the number of homes sold fell 34.7% and the number of homes for sale rose 81.9%. Utah continues to be a light upon a hill to others throughout the States and even worldwide. Even a two-year period will historically yield an increase in equity in the Utah housing market. Heres why, 2021: The year of the shocking home price, Utah made a dent on its housing shortage in 2021 but is still 31,000 units short, Buying a house? Salt Lake City, Utah Just like Utah peaches Forecast home price change by May 2022: 23.5% Local professional: Dave Robison, broker and owner of goBE Realty, and former president of Utah Association of Realtors and Salt Lake Board of Realtors What makes the Salt Lake City market poised for growth? A good indication of the markets strength and inventory is the average number of days properties stay listed. You can try RealAdvisor home value appraiser, to get the value of your home in Utah. Over the past 12 months, the state added 43,300 jobs. While that remains to be seen, whats clear is that demographic tailwinds will keep the demand for housing robust this decade. Salt Lake City is the capital and most populous city of Utah, with a population of 200,133, Salt Lake City housing market is somewhat competitive, with listed properties receiving three offers per listing and 24.5% of them selling above the asking price. Eskic, however, is predicting Utah home prices will drop 9% year over year in 2023. For the average mortgage, the difference translates into approximately a $1000 difference for a similar home, representing tens of thousands of dollars over the life of the loan. If inflation continues to fall, as I expect it will, rates will continue to drop. Additionally, both Wood and Eskic predict Utahs estimated 31,000-unit housing shortage will continue to keep home prices high, even if the state sees some price drops, so they expect Utahs housing affordability crisis to remain a persistent issue that is pricing out more than 75% of Utahns from affording the states median-priced home. Months supply of inventory: 3 - up from 1 in September 2021. Median sale price: $611,600. This dataset excludes all rentals data. Median listing prices were 3.6% lower than in the third quarter, suggesting that higher financing costs may have created a price ceiling. Year over year, prices rose in four markets but pulled back in the other three. In January 2023, 17.5% of homes in Utah sold below list price, down 27.8 points year. As for interest rates, Wood noted forecasts vary widely, anywhere from 5% to 9%, but he personally expects rates to bounce between 6.5% and 7.5% in 2023. Browse through the largest marketplace of Real Estate professionals, We have an in-house team that will guide you through the process. As the demand for housing decreases as buyers find themselves priced out of the market by the increasing cost of borrowing money or postpone their homebuying plans to preserve their buying power, we can expect Utah housing prices to stabilize or diminish. Its falling off faster than we thought it would.. Utah may be the 13th-largest state in the country by area, but it is also the 11th-least densely populated. If you are investing in real estate properties to rent out as vacation homes, find out the short-term rental laws in the city and county youre considering. We go back to the 70s, for example, Eskic said. Woods research colleague at the Kem C. Gardner Institute , Dejan Eskic, is more bearish, predicting Utah home prices will drop 9% year over year in 2023. Like, they were not outrageous houses or homes that would have been that (price) five or 10 years ago.. 2022's housing market follows Utah's hottest housing year ever . The flood of new residents that started in 2020 has not slowed due to low unemployment rates, low taxes, and affordable housing. Utah has had quite a long history of rapid acceleration where house prices are concerned. The Midwest, he said, will likely see minimal price increases.. A realty sign at a property in the Salt Lake City on Friday, Jan. 6, 2023. Since Utah house prices are higher than the national average, it should come as no surprise that the demand has gone down noticeably since July 2022. So far, Utah home prices are still up year over year, but theyve so far fallen over 9% from their peak in May, according to Eskic. They also anticipate prices to grow 8.5% and sales to grow 15.2%. Therefore, experts expect that Utah home prices will slow down their staggering growth and may decline in some areas. While neither Wood nor Eskic are predicting a catastrophic, 2007-like crash, they do expect 2023 to be a challenging year, especially for homebuilders that leaned hard into speculative building in 2021. So its really tough to say, but I think its going to be minimal negative, or negative positive, Yun said. However, as the level of Utah housing prices outstripped the national average, the demand is bound to decline as salaries are not increasing nearly as fast as property prices. So Branca wasnt expecting to buy his dream home. Price growth rates, especially in 2021, were nothing short of astounding. Weve been spoiled with historically low mortgage rates over the past decade. Login. The rental market is not affordable and is experiencing high rental prices. Nationwide, an increasing number of firms have downgraded their forecasts and predict U.S. home prices will continue to fall in 2023, Fortune has reported. But Wood is more bullish than Eskic. I have moved the needle accordingly. Once the market rebounds, buyers can be in an even more powerful position when the market shifts back to a more lopsided sellers market. The Utah housing market has experienced consistent growth in real estate throughout the past five years, but it started to take off in mid-2020. Branca said if someone like him is struggling to buy, he cant imagine what its like for people living on lower incomes. And while the days of sub-3% rates are gone, they are not expected to go exorbitantly high. million Redfin.com users who searched for homes across more than 100 metro areas. While Utah is below the national average in many areas, home prices have managed to remain strong. However, despite the increased inventory in the past months, there were only three months of housing supply available in September 2022, still a long shot away from the five to six months required for a balanced market. Median home price for Salt Lake residents over the last year was $564,062. The median sale price was up 5.6% in September 2022 Y-O-Y, but the number of homes sold dropped 26.7%. With their buying power significantly diminished, house hunters find themselves priced out of the market or may consider postponing their home-buying plans until interest rates return to a more affordable level. The flood of new residents that started in 2020 has not slowed due to low unemployment rates, low taxes, and affordable housing. Boating in Utah can be an unmatched experience. The Utah housing market has been following similar trends as the ones observed nationwide, including a white-hot real estate market characterized by a low inventory and high demand for housing. The time to purchase your primary residence is today and has almost always been today. It is equally impressive to see that the unemployment rate remained at a very low level even as the state added over 52,400 people to the workforce. One will often find him drawing, doing toy photography, or dabbling in other geeky stuff when he's not helping investors make smarter decisions. For further information about the housing market in your area, please dont hesitate to contact your Windermere Real Estate agent. Affirming this projection, Wood asserts . The average months of supply is 3 months, up 3 year over year. Some investors flip houses, others wholesale them. Its more likely that as mortgage rates continue to decline, the market will find a solid floor in the summer and prices will resume their upward trend as we move into the fall. Site Map | FastExpert, inc. 2021. For September of 2022 Utah saw the median sale price remain flat compared to August and is still up almost 6% from 2021. REDFIN and all REDFIN variants, TITLE FORWARD, WALK SCORE, and the R logos, are trademarks of Redfin Corporation, registered or pending in the USPTO. The following analysis of select counties of the Utah real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. These factors positioned Utah in the top spot on the Bankrate Housing Heat Index. It took an average of 55 days to sell a home during the fourth quarter. Just to give you an idea, Utah Association of Realtors president Dave Robison said that in-migration is hugely impacting Utah real estate. Utah Housing Market at a Glance September 2022 Even this far into 2022 with the mortgage rate hikes, Utah remains one of the hottest markets. Dont wait. This is the MOST ACCURATE UTAH Housing Market Forecast for 2022. In addition, inflation and the looming specter of a recession are also taking a toll on Utah residents buying power. By April, mortgage rates had begun shooting up. He expects buyers and sellers will step back and wait for the dust to settle, many of them locked in at low, 3% mortgage rates that helped send the nations housing market into a frenzy in 2020 and 2021. The median price of a home in the United States is currently $518,200. According to the Utah real estate market predictions from industry experts, there will be an influx of sellers in the state given the present condition of not having enough supply to meet the markets unprecedented growth. Will it pop or deflate?, A U.S. housing bubble is brewing. 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