During the second quarter of this year, it looked as though the beginning of the end of the COVID-19 pandemic was in sight. While that still may be true, the emergence of variants like Delta means much uncertainty remains. While many businesses have reopened, there is a lot of fear about what the future may bring even as the economy continues to recover from the shutdown.
The good news is that interest rates continue to remain low which has prompted many people in Salt Lake to look for new homes. Some key numbers in home sales continue to be promising. We’ll take a look at a few of those for the third quarter such as the number of housing units sold, days on the markets, and the median sales price as well as the current numbers on new listings. We’ll also let you know about some other things to look for in the current Salt Lake real estate market.
Median Sold Price
When we look at the currently available statistics on median sold prices in Salt Lake, we see some promise. The median sold price for the third quarter is $479,000 which is a 24.42 percent increase over the Q3 price for last year of $385,000. That’s an impressive jump. Keep in mind that the median sold price is a more accurate number than the average sales price (which includes the lowest and highest sales prices) which can muddy the waters a bit. That said, the median sales price provides a better indicator of what homes are actually selling for in the Salt Lake area. What’s clear from the median sold price is that the real estate market in Salt Lake continues to be healthy.
Number of Homes Sold
Another sign of market health is the number of homes sold in Salt Lake. Looking at the numbers from the third quarter of 2021, we see that the total number of units sold in Salt Lake was 4,773. That’s a drop of nearly 25% over the 5,946 units sold in the third quarter of 2020, but only a slight drop from the 4,791 total units in the second quarter of this year. Not a huge difference, but a downward trend nonetheless. This means that while homes are commanding higher price tags, there are fewer of them available. This could potentially lead to a housing shortage which would keep renters stuck where they are instead of becoming homeowners.
Median Days on Market
Taking a look at the Days on Market or DOM, we see a drop of 36.35%, from eleven days on the market down to seven and that’s a positive sign. It shows that people are still actively looking for housing and are willing to move quickly to do so. However, it’s not quite as dramatic as the 50% drop the Salt Lake market saw from the third quarter of 2020 from the third quarter of 2019 and it’s an increase from the five-day median number from the previous quarter of this year.
New Listings for Q3
New listings for the third quarter of 2021 decreased slightly from the third quarter of the previous year. The number of new listings for Q3 this year is 5,626 which is an 8.95 percent drop from the 6,179 of 2020.
Current Mortgage Rates
The economic uncertainty and shutdowns of the past 18 months have kept interest rates low. At the time of this writing, the average rate on a 30-year fixed-rate mortgage is slightly over 3 percent while the rate on a 20-year fixed-rate mortgage is 2.633 percent. A 15-year fixed-rate mortgage is 2.115 percent while a 10-year fixed rate sits at 2.052 percent. As people in the Salt Lake area, and across the country, have reassessed their work/live spaces in the pandemic many are eager to take advantage of these low rates.
How long rates will stay this low isn’t entirely clear. That said, they will likely stay that way well into the next year. What other challenges pop up over the next 12 months, or even four months is equally difficult to gauge. We advise buyers to be patient, however, and sellers to take advantage of the market while it remains strong.
What Do These Housing Factors Mean for Salt Lake
The pandemic has wreaked havoc on the U.S. economy as it has across the world, not to mention the thousands of lives lost. Many businesses that were forced to shut down during the pandemic will struggle to regain their footing and some will remain closed forever. That said, Utah still has a very low unemployment rate. As of August 2021, that number was 2.6 percent which is lower than the 2.7 percent the state showed back in May of this year. That, together with the low interest on home mortgages and our low state taxes, should keep the housing market healthy—at least in the short term, if not longer.
It’s a good time for current homeowners to upgrade or downsize and for first-time buyers to shop for their dream home in Salt Lake. Our population growth in Utah has increased the demand for housing to be sure. Utah was the fastest-growing state in the union between 2010 and 2020 which outpaced the national rate of 7.4 percent. Supply needs to keep up with demand and so far that’s been tricky. This means it’s a seller’s market with homeowners getting many times over the asking price for their homes. That said, a housing shortage can put a strain on an economy and would prevent people from moving here from out of state. Lower-income and wage earners have few options for affordable housing in Utah which could present opportunities for developers and inverters, but there’s also a shortage of skilled workers as such electricians, plumbers, roofers, and framers.
The information in this article was obtained from several sources and is subject to change over time. It is presented here only as a snapshot of the current real estate market in Salt Lake as of September 2021.