The housing market for homes priced between $400,000-$800,000 in northern Utah is showing signs of softening due to high inventory levels. We are not going through a correction or a decline, simply a slowing. The Salt Lake Tribune today reports that homes priced over $500,000 are being hit the hardest, which I can confirm. I listed a home for $509,900 two days ago and when I pulled comps there were hundreds of active homes in the area, in the price range that we need to compete against.
The media likes to play up anything they can, including a shifting housing market, but things aren’t usually nearly as dramatic as the media makes them out to be. The media is chicken little, running around screaming about anything they can, while I’m out in the field everyday seeing what’s actually happening.
(Searching between $500-$700k on BlueRoof.com in the south end of valley returns almost 500 homes for sale)
In the lower price ranges homes are still flying off the market in days, many still getting multiple offers. Three of the homes I have listed under $250,000 in the last couple weeks sold within the first couple days at full price or more.
Some areas of town are seeing this more than others. The south end of the Salt lake Valley and the northern part of Utah county are seeing the most inventory in the $500,000 price range, making it difficult to sell in those areas. Even in Sugarhouse, where homes usually sell very quaickly, are sitting longer. I have two listing around $400,000 in Sugarhouse that have been on the market for more than a month. Our team just put one under contract for over $500K in Sugarhouse, but it was priced very well.
Looking at data from the MLS the number of active listings in Salt lake County has risen each week for the past two months and has increased from 5212 active listings on June 1st to 6984 on August 17th, representing an increase of 1772 homes, or a 35% increase in the last two months. That’s a lot of inventory coming on the market, and a lot of that is in the south end of the valley.
The average days on market has risen, but not by much (from 27 days in August 2006 to 33 days this year), showing that homes that are priced well are still selling fairly quickly.
Another sign of the softening market is that less people are trying to sell For Sale By Owner (FSBO), seeing their homes sit on the market longer and getting less activity. We’ve been having quite a few FSBO sellers contact us recently to ask about listing their properties, many have been trying to sell for months and are now realizing they may need a good Realtor now that the market isn’t a seller’s market like it was last year.
One listing I have at $1,250,000 in the south end of the valley has seen more activity than some of our homes listed in that mid-price level around $500k, even though there are more homes over $1Million on the market this year than last.
The market continues to stay strong overall because of the nation-leading job growth and people moving into the area. And the area is still experiencing appreciation (probably 6-8% this year), with some area prices rising by more than 15% for the year, especially in the under $250k price ranges. The Deseret news has an article from yesterday saying the local market is still rosy.
Overall, it’s a good time to buy in the Salt Lake area because there is such a great inventory, prices are steady and sellers that need to sell are pricing their homes accordingly, and with the job growth and influx of people moving into the area we should see a good, healthy growth and appreciation over the next few years. It is still very easy to qualify for a loan and first time home buyers would be wise to buy now and have their money work for them instead of throwing it away on rent.
For the latest area stats see chart.