A lack of houses for sale is pushing Utah home prices to new highs.
The Utah Association of Realtors released its June Monthly Market Indicators report on Wednesday showing the median price of Utah homes sold increased more than 30% in June to a new record high of $450,000.
That’s an increase of $105,000 from the June 2020 median of $345,000. It is also the 111th consecutive month of year-over-year median sales price increases.
Among counties with at least 50 sales, home prices increased the most in Summit County (up 70%), Weber County (up 37%) and Cache County (up 36%).
“The reason for the skyrocketing home prices is not having enough homes for sale,” said Caro Norton, president of the Utah Association of Realtors. “The number of active listings remains significantly below what is needed to keep up with buyer demand and protect housing affordability.”
In fact, the number of homes for sale was down about 53% compared to last June. The 5,369 homes for sale at the end of the month was a record low for the time of year and represents a supply of 1.1 months statewide. A market that is balanced between buyers and sellers typically has about six months of inventory.
Counties with at least 50 sales that lost the most inventory were Wasatch County (down 65%), Summit County (down 62%) and Uintah County (down 61%).
Areas with the most competitive markets were Davis County (0.8 months of supply), Salt Lake County (0.9 months of supply) and Tooele, Washington, Weber, Box Elder and Cache counties (1.0 months of supply).
The inventory shortage means the average home seller is getting more than their asking price. According to the data, sellers are receiving an average of 103.5% of their original list price.
With high demand, the time it takes to sell a home has declined. The average days a Utah home is for sale is down 54% and has tied the record low set last month of 18 days.
The fast-moving market and increasing home prices have hurt housing affordability, which declined 22%. In June, a Utah family making the median household income only had 85% of the income needed to purchase the median-priced home at prevailing interest rates.
Nevertheless, even with the challenges of a highly competitive market, buyers can still find success. Start by working with a local Realtor to develop a strategy and learn more about current market conditions in your neighborhood. Home-buying tips include:
- Submitting a pre-approval letter with your offer.
- Being ready to visit new listings as soon as they go on the market.
- Quickly submitting your offer.
- Keeping deadlines as short as possible.
- Increasing your earnest money beyond what is customary.
Some buyers will choose to use even more aggressive strategies than those listed above. However, you’ll want to make sure you understand the advantages, risks and pitfalls if you decide to use any of these strategies:
- Paying for the home in cash.
- Making your earnest money non-refundable.
- Paying above appraised value.
- Waiving contingencies for inspections, appraisal or financing.
- Using an escalation clause.
To learn more about the intricacies of the current real estate environment, contact a local Realtor. Find a directory of Utah Realtors at UtahRealtors.com.