UTAH HOUSING MARKET

WRITTEN BY: UTAH ASSOCIATION OF REALTORS

Not even a pandemic could slow down Utah’s hot housing market. Despite the economic shutdowns that disrupted the spring 2020 buying season, the Beehive State was still on track, as of the end of October 2020, to beat the 2019 record for the most homes sold in Utah during a single year. Year-to-date sales were up 8%, and the median sales price increased 10% to $350,000, according to the Utah Association of Realtors. As of October 2020, homes were selling at one of the fastest paces on record as buyers fought for scarce inventory. Experts say the strong housing market is expected to continue in 2021 — especially in Utah. Here’s a closer look at what they’re saying:

NATIONAL RECOGNITIONS

Utah’s housing market has been so impressive during the pandemic that several national organizations have recognized its resilience. For example, Bankrate named Utah No. 1 on its Housing Heat Index for third quarter 2020. The state received high marks for strong job growth, rising home prices and a low tax burden. Another national recognition came with ProvoOrem’s placement on the National Association of Realtors’ list of the Top 10 Markets During and in a Post-COVID-19 Environment. The organization expects real estate in the ProvoOrem metro to perform well over the next two years because of low unemployment, strong migration to the area and an environment conducive to work-from-home arrangements. A second report from the National Association of Realtors said Salt Lake was one of the best markets for millennials during the pandemic. Additionally, a separate report from Lending Tree said Salt Lake was the most popular metro for Generation Z buyers. Finally, Utah ranked No. 4 among states for home price appreciation in the third quarter with a 10.7% increase over the past year, according to the Federal Housing Finance Agency (FHFA). Among local areas, all five Utah metros ranked in the top 50 markets in the U.S., according to FHFA’s alltransactions index.

2021 OUTLOOK

Powering Utah’s housing demand is strong population growth — including people moving to the state for jobs, lifestyle reasons and more affordable housing — as well as household formations from Utah’s young population of millennials and Generation Z. The National Association of Realtors also predicts the increase in people working from home will continue to affect the market in 2021. As people stay at home during the first part of 2021 and as employers offer flexibility, people are likely to re-evaluate their housing situation. Buyers will look for houses that better match their lifestyle and work-fromhome needs. With one of the most resilient economies in the country, Utah’s job situation will support home-buying activity. In October 2020, Utah had the second-best job growth in the country, only falling below Idaho. Along with the state’s efforts to keep businesses open, Utah’s diversified industries and favorable business climate have helped boost the state’s job creation during the pandemic. Along with Utah’s strong economic conditions, low mortgage rates will support Utah home buyers in 2021. A consensus forecast from more than 20 economic experts says interest rates will average 3% in 2021 and 3.25% in 2022, according to the National Association of Realtors. The consensus forecast also expects an 8% increase in U.S. home prices and lists Salt Lake City as one of the top prospective markets in 2021. Should mortgage forbearance programs end, any rise in foreclosures is likely to be offset by the lack of homes for sale. The pandemic exacerbated an already-existing housing shortage, which is expected to continue into 2021. As of October 2020, the number of Utah houses for sale was at a record low, according to Utah Association of Realtors records that date back to 2003. In summary, Utah’s housing market is wellpositioned for future growth. 2021 looks to be another year with strong real estate sales, home price increases and lots of competition for buyers. To learn more about the unique conditions in your area and for help navigating the competitive real estate landscape, contact a local Realtor. Find a directory of Utah Realtors at UtahRealtors.com.