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Housing market prices drop Salt Lake County, Utah

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Shocked by rising mortgage rates, the once-hot housing market is taking a toll on Utah’s housing market.

Salt Lake County, Utah’s most populous county, experienced its first year-over-year decline in home prices since 2011. December 2021.

That’s according to new UtahRealEstate.com data released by the Salt Lake Real Estate Association on Tuesday.

Is the housing market collapsing?

It’s important that Salt Lake County real estate prices fell for the first time in over a decade, but it’s worth noting that these year-over-year declines come after nearly two years of wild price gains fueled by pandemic housing. It is also important to The buying frenzy hit the West and states like Utah and Idaho particularly hard.

The surge has pushed the median single-family home price in Salt Lake County up nearly 60% from 2020 to 2022. Last May, the county’s median single-family home price was $650,000. Since then, house prices have fallen 17%.

of housing professionals and economists Utah Expects to Bring Bad Hangovers in 2023 After two years of unprecedented price increases and demand surges, the housing market has plunged, but we don’t expect a crash like that of 2008.

Today, the U.S. housing market is in a slump, according to Federal Reserve Chairman Jerome Powell.hard fix“When”reset“That’s when the frenzied exuberance of the pandemic came to an end.”housing bubble

Experts say Utah’s booming economy and job market have seen widespread unemployment and foreclosures, fueled by risky lending practices and the subprime mortgage crisis after the 2006 housing bubble burst. said it would protect the state from

However, Utah housing experts also Odds on how far Utah home prices will fall in 2023 before it could revert in 2024.

Jim Wood, an Ivory Boyer Senior Fellow at the University of Utah’s Kem C. Gardner Institute for Policy Studies, is more optimistic. weatherUtah expects “a slight year-on-year decline in prices in the first and second quarters of 2023, but prices begin to stabilize by the third and fourth quarters.” Housing forecast Early this month.

But Dejan Eskic, Wood’s fellow researcher at the Kem C. Gardner Institute, is more bearish, predicting Utah home prices will fall 9% year-over-year in 2023. Mid to late teens, depending on interest rates.

Wood and Eskic predict that Utah’s estimated 31,000-unit housing shortage will continue to keep home prices high even if the state sees some price declines, so they anticipate. Utah Home Price Crisis to remain a persistent problem Over 75% off Utah From affording a state median home.

Meanwhile, sales in Utah have fallen off a cliff.

Sales of all home types in Salt Lake County fell to 761 units, down 50% from 1,508 units in December 2021, according to the Salt Lake Realty Association. For all of 2022, Salt Lake County will have 13,087 annual sales, down 26% from 2021.

According to the board, this is “the steepest decline in a year (1997 to present) on record.” “Property sales before 2022 were surprisingly stable at around 18,000 sales for seven years, but he only diverged in 2020, the year of the pandemic when sales surged to 19,000 units. .”

What does this mean for homebuyers?

Home prices are still high compared to just three years ago, but slowing sales and falling home prices could give homebuyers a bit more advantage compared to the hot market of 2020 and 2021. There is a nature.

“Homebuyers have more bargaining power,” Salt Lake Realty Association president Rob Ockee said in a prepared statement. “The good news for sellers is that the majority of homeowners have enough equity in their homes, despite the recent price drop. You can step back and wait for the dust to settle.”

Additionally, Ockey said the price decline is expected to stabilize by the third quarter of 2023.

Meanwhile, Utah housing demand is expected to remain relatively strong given the state’s housing shortage.

“Housing demand is strong due to net immigration and population growth,” Ockee said. “More than a third (38%) of all active listings on UtahRealEstate.com are under contract, indicating that there is still strong buyer demand in our market.”

2023 Mortgage Rates

Mortgage interest rates are also starting to fall. 7% threshold crossed some time last year.

Mortgage rates fell to 6.15% last week, the lowest since September 2022, according to Freddie Mac.

Rates are expected to drop to 5.5% this spring, according to Lawrence Yun, chief economist of the National Association of Realtors.

“The spread between the 10-year Treasury and the 30-year mortgage rate is very wide,” Yun said during a Salt Lake Realty Association forecast during a visit to Salt Lake City earlier this month. “If it had narrowed, or had normal spread terms, today the mortgage rate would be 5.5% for him.”

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