During the first quarter of 2021, the housing and real estate market continues to have high demand for houses in every state. With countless properties being sold in a shorter period of time, it is clear that most homebuyers (both local and out of state) are now taking full advantage of the low interest rates and practical mortgage payments.
In fact, the Salt Lake Tribune stated that Utah is one of the toughest places right now to house hunt and possibly buy a home. That’s because each and every property is always embroiled in bidding wars.
Here are three key housing statistics that affect the real estate market in Salt Lake City and an analysis of how those stats have changed in Q1 of 2021.
Median Sold Price
If you are not familiar with median price, it is the “middle point” for a local market’s price bracket. It’s not the average price, but it functions as a more accurate indicator of the true “average” price of a home.
Based on the data gathered from the first quarter of 2021, the median sold price stands at $415,000, which is a 14.36% increase from Q1 2020’s median sold price of $362,000. For the median asking price, it was at $432,250, which is a tad bit higher than last year’s asking price of $375,000.
So why is the median price higher in Q1 2021, compared to Q1 2020?
Here are a few reasons why. First, there is a high demand for new and existing properties ranging from single-family homes, townhouses, condominiums, etc. happening around Salt Lake. However, there is a low supply of affordable housing options for homebuyers. This means more people are bidding for fewer homes, causing the price to go up.
Second and lastly, there are a lot of people from other states (such as California, Washington, and Texas to name a few) who are looking for a new home to settle in. Utah is a great state with a lot of land to buy or build a home. It is also a popular destination due to its mountain slopes, which are perfect for skiing. This, too, is increasing the number of bidders for the low inventory already available.
According to a recent article about the real estate market in Logan (but applicable to the state as a whole), most of the buyers from the past 12 months have been looking to buy a property in Utah because of these key factors:
- Larger Property
- Affordable Market Price
- Great Scenery and Outdoor Activities
If the real estate market continues a huge demand from clients, then the median price will continue to soar by eight to 10 percent until the end of 2021, according to an ABC4 news article.
Number of Homes Sold
Let’s make a quick comparison as to how many properties were sold during the first quarter of 2020 and 2021, respectively.
According to the Wasatch Front Regional MLS statistics, there were around 3,523 properties sold during the first quarter of 2021. When we compare it to the first quarter of 2020, the number of houses sold reached an estimate of 3,471.
That’s an increase of 1.50%, compared to the first quarter of 2020. Is that good or bad?
For any homeowner who is planning to sell their existing property, it’s a good thing to look forward to this year. According to ABC4 News, there are around 500 houses that are currently listed in the Salt Lake City area. With each property, there are dozens of offers coming from first-time, local, and out-of-state homebuyers.
But for homebuyers who are still looking for their dream home, this poses a challenge for them. Because of the tight competition and low housing supply, it will take some time for them to find a property that fits both their demand and budget and whose bid they will win.
The market in Salt Lake City is going strong this year, but with the high demand and growing number of homebuyers, the market will continue to have a limited amount of houses available for selling.
Additionally, almost all builders in Utah may not be able to keep up with the high demand for new homes, as building schedules are still being plotted even though we’re already in the second quarter of the year.
Median Days on Market
When we talk about CDOM (Cumulative Days on the Market), it refers to the number of days a home is on the market, from the first day of a home being listed for sale to the last day when it is sold to the new owner.
During the first quarter of 2021, the median days on market for a property in Salt Lake was six days. The time frame this year is shorter when we compare it with last year, which was 24 days.
When you think about it, this reflects the urgency of most homebuyers to claim a new home in a more affordable market, such as Salt Lake.
Aside from the practical rates and spacious homes in Utah, most of the homebuyers are trying to move out of high-cost areas. The pandemic has shifted the new normal from working in an office to working remotely or at home.
With the flexibility of their work and much higher home prices in their previous area, these homebuyers are more than willing to move to Utah.
Conclusion
If the trend continues this year, then there is no doubt that the Utah real estate market will continue to take the number one spot across the nation. But it also comes with a risk for local homebuyers who might be unable to afford the rising mortgage payments and rents in the future.
With the growing number of homebuyers and low housing inventory, it is up to Realtors® and builders to make it possible for everyone to have an affordable home in Salt Lake.
Important Note
All of the data in this article was gathered from multiple sources and may change over time. It is only used to present and inform about the current real estate market in Salt Lake County as of April 2021.
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