A sizzling hot housing market is pushing Utah home sales to new records. That’s according to a new report that says Utah Realtors sold the most homes ever during the month of May.
The records, which date back to 2003, show a 6 percent increase in statewide sales, according to the Utah Association of Realtors. That’s up from an exceptional month last year. This May, Utah Realtors sold nearly 5,000 properties, an increase of about 300 sales from 2015.
The hot real estate market extended to Northern Utah, especially as buyers looked for more housing choices close to Salt Lake.
In Weber County, where buyers sought more affordable homes, real estate sales rose 10 percent. Davis County boasted a 4 percent gain. In Morgan County, sales increased from nine to 14 transactions.
Weber County stood out as one of the top performers statewide. Among counties with more than 50 sales, Weber County was No. 3 for sales increases. Tooele and Box Elder counties, which ranked first and second, also presented affordable housing choices.
The chief economist of the National Association of Realtors credits low mortgage rates and rising equity as reasons for the strong housing demand. Nationally, sales increased 4.5 percent from May 2015.
“This spring’s sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they’ve accumulated in recent years and finally deciding to trade-up or downsize,” said Lawrence Yun in a statement.
Part of that equity increase is coming from rising home prices. Statewide, the median sales price of homes sold in May increased 8 percent to $249,000. That’s the 50th consecutive month of year-over-year price increases.
In Morgan and Davis counties, prices spiked, rising a whopping 17 and 16 percent to $397,000 and $260,000 respectively. While Weber County prices also increased, homes remained more in reach. The median sales price rose 7 percent to $191,000, making the county one of the most affordable areas in the state.
One of the biggest problems for would-be buyers is lack of housing choices. Throughout Utah and the U.S., the number of homes for sale is extremely low. Statewide, the inventory of homes for sale fell 25 percent from last year. The trend was the same in Northern Utah where the number of available houses was down about 40 percent for Davis, Morgan and Weber counties.
“Existing inventory remains subdued throughout much of the country and continues to lag even last year’s deficient amount,” Yun said. “While new home construction has thankfully crept higher so far this year, there’s still a glaring need for even more, to help alleviate the supply pressures that are severely limiting choices and pushing prices out of reach for plenty of prospective first-time buyers.”
This is also true in Northern Utah where competition is incredibly high. Contracts to buy homes are up and demand continues to outpace supply.
In fact, homes are selling in near-record time. Across Utah, it takes an average of 45 days to get a home under contract. That’s down from about two months last year.
Along the Wasatch Front, homes sell even faster. In Davis County, the average time a home is on the market is 33 days. Similarly, Weber County averages 40 days. However, it’s important to know that these figures are just averages. Depending on the price and location, some homes are selling in just a few days.
Although transactions will naturally decline in the fall as part of the seasonal real estate cycle, sales will likely maintain good momentum historically as buyers look to take advantage of ultra-low mortgage rates.
“Barring further deceleration in job growth that could ultimately temper demand …, sales have the potential to mostly maintain their current pace through the summer,” Yun said.
For the best chance of success in this fast-paced market, would-be buyers can learn more about purchasing a home by contacting a local Realtor. A directory of Realtors specializing in Northern Utah is available at NWAOR.com.
Jed Nilson
2016 President, Northern Wasatch Association of REALTORS