Utah is one of the fastest-growing states in the nation. While that’s great news, it also means it’s a challenge for the supply of homes to keep up with the demand. There’s a housing shortage, and affordability is a big concern for those wanting to buy.
A recent Associated Press study analyzed five years of data and found there’s a growing shortage of affordable housing in the Beehive State. Utah has reached the 3 million population mark and has one of the best economies in the nation, yet that growth has pushed up prices and limited the number of homes for sale.
There was a five-year decline in housing inventory between 2012 and 2017. In Salt Lake City, the drop was particularly acute with a nearly 70 percent decrease.
Housing expert James Wood, with the University of Utah’s Kem Gardner Policy Institute, discussed the shortage with Realtors earlier this year. He said for the first time in 40 years the number of new households is exceeding the number of new housing starts. Utah added 109,321 households but only 81,656 housing units.
Wood also said Utah was once considered a starter-home market, but now some first-time buyers are choosing to stay in rental units or with family members. They are navigating rising home prices and limited housing choices, especially for properties less than $500,000, which have the most competition.
Realtors call this situation a “seller’s market,” where existing owners have the advantage as buyers outnumber homes for sale. Sellers are securing higher prices, and in some cases, buyers bid up the house beyond the initial asking price. Some say they haven’t seen a real estate market like this in 20 years.
The good news for area buyers is the situation is somewhat better in Northern Utah. The median price of a single-family home on the Wasatch Front is $280,000. Compared to the $300,000 median price in Salt Lake County and $287,000 in Utah County, Weber County’s median home price remains more affordable, coming in at $205,000.
Along with choosing more affordable areas like those in Northern Utah, would-be buyers can take additional steps to increase their chances for success.
One step is to hire a licensed Realtor, someone with access to listings and data who intimately knows the market. Your Realtor can prepare you to act quickly when new listings go up for sale as well as help you identify the ones that are a good value and those that are overpriced. Your Realtor may also know about new listings likely to come on the market.
With their training and experience, Realtors help you avoid costly mistakes, even when you’re acting quickly. Realtors also work together to achieve and maintain high levels of professionalism and ethics.
So hang in there and don’t get discouraged. Professional assistance from your local Realtor will help you 1) find a home, 2) create a strategy for competing with other buyers, 3) identify a reasonable price and terms, 4) write a competitive offer, 5) warn you of inspection pitfalls, 6) provide information on financing and appraisals, and 7) walk you through the process all the way to closing.
The seller may have some market advantages, but you can use a Realtor as one of your competitive advantages. To learn more about housing conditions in your neighborhood, contact a local Realtor. Find one by visiting NWAOR.com.
-Sonya Smithing
2017 President, Northern Wasatch Association of REALTORS®