Utah’s Housing Market Is Looking Iffy In 2023

Utah’s Housing Market Is Looking Iffy In 2023

With housing markets throughout america thrown into an odd limbo as a consequence of rising rates of interest, dampening demand, however sticky unaffordability, it’s necessary to try to determine what precisely is happening on-the-ground. Whereas in previous articles we centered on metropolis housing markets, such because the Denver housing market in 2023, right here we’re specializing in the Utah housing market, each on the state stage and the housing markets of its 20 largest cities.

Learn on to learn the way the Utah housing market is shaping up in 2023.

The Utah Housing Market in 2023

Utilizing knowledge sourced from Redfin
RDFN
, we analyzed the Utah housing market and the housing markets of the state’s 20 largest cities, throughout a spread of necessary housing metrics, together with: Median sale worth, the variety of month-to-month dwelling gross sales, the variety of new listings monthly, obtainable stock, the months of provide of properties, the median variety of days on market a house on the market spends, the gross sales to record worth ratio, and the share of lively listings with worth drops in a given month.

In keeping with the newest knowledge, as of March 2023, the median sale worth for a house in Utah general is $525,900. That’s down by 5.8% from the earlier yr, when the median sale worth was $558,200 in March 2022. Contemplating how sizzling housing markets had been by means of the primary half of 2022, the year-over-year decline from 2022 to 2023 isn’t too unhealthy in comparison with many different states. Nonetheless, for the three earlier year-over-year intervals — March 2019 to 2020, March 2020 to 2021, and March 2021 to 2022 — the change in Utah’s median sale worth displayed double-digit development: 10.7%, 27.7%, and 23.7%, respectively.

Alternatively, within the pre-pandemic years, development in Utah dwelling costs was extra modest. From March 2017 to March 2018, the median sale worth grew by 8.7%, from $280,300 to $304,600; and from March 2018 to March 2019, Utah’s median sale worth grew by 4.8%, from $304,600 to $319,200. Thus, the pandemic-induced excessive demand in homebuying throughout 2021 and the primary half of 2022 actually pressed the gasoline pedal on dwelling worth will increase.

The moderation in Utah’s housing market exercise will be seen in a few of the different housing metrics we compiled and analyzed. As an illustration, obtainable for-sale stock has modified dramatically yr to yr from 2017 to 2023. From March 2020 to March 2021, regardless of (or, due to) the affect of the pandemic, Utah’s statewide obtainable stock fell by greater than half (-51.7%): From 6,749 obtainable properties, down to three,258 properties on the market. Within the subsequent year-over-year interval, March 2021 to March 2022, stock once more declined, however solely barely, by 5.5%.

Nonetheless, from March 2022 to March 2023, housing stock in Utah shot again up, by 86.8%: From 3,079 obtainable properties on the market, as much as 5,752 properties. Regardless of this dramatic year-over-year development in housing stock, the variety of obtainable properties on the market in March 2023 is definitely down considerably from a notable excessive of 8,215 properties on the market in September 2022 — the latter determine being the most important inventory of housing stock since September 2015, when Utah had 8,289 obtainable properties on the market.

Beneath you’ll discover a desk that particulars the important thing housing metrics we used for the statewide Utah housing market general:

Utah Housing Market 2023: High 20 Largest Cities

Based mostly on inhabitants, we compiled housing knowledge on the 20 largest cities within the state of Utah. The most important metropolis is the state capital, Salt Lake Metropolis. To a considerable diploma, the housing markets of those 20 cities intently comply with the tendencies for the statewide Utah housing market general. Though, there are after all exceptions.

Of Utah’s 20 largest cities, Draper posted the very best median sale worth in March 2023, at $679,200. That determine is down a substantial quantity since final yr: From a median sale worth of $820,000 in March 2022, Draper dwelling costs plunged by 17.2% in only one yr to $679,200. Certainly, Draper skilled the most important drop in median sale worth year-over-year behind solely town of Lehi, which skilled a lower of 19%, from $566,500 in March 2022, all the way down to $458,995 in March 2023. In actual fact, 18 out of Utah’s 20 largest cities skilled year-over-year declines of their median sale costs from March 2022 to 2023.

The 2 exceptions had been Herriman and Saratoga Springs, the place dwelling costs rose by 2% and 4.6% respectively. In any other case, the one-year interval from March 2022 to March 2023 noticed across-the-board drops in dwelling costs in Utah’s foremost housing markets.

Take a look at the desk under for particulars on these 20 cities and their median sale costs:

The cities of Lehi, Draper, and Sandy all ranked among the many high 5 cities which have skilled the best one-year decline in median sale worth. These three cities, not coincidentally, additionally ranked among the many high 5 cities the place the sale-to-list worth ratio — the imply ratio of every dwelling’s sale worth divided by their record worth masking all properties — has additionally declined dramatically. When properties promote for above their record worth, they’ve a sale-to-list ratio of over 100%, and the upper the sale-to-list ratio, then it’s implied that demand is robust, and costs are being pushed up. Nonetheless, having a sale-to-list ratio of lower than 100% signifies that the ultimate sale worth was decrease than the unique listed worth and will replicate a slowing in homebuying exercise and decrease demand.

For instance, in Lehi, the sale-to-list worth ratio in March 2022 was 103.2%, so properties had been promoting for greater than they had been initially listed. By March 2023, Lehi’s sale-to-list ratio had decreased by 6.6%, all the way down to 96.4%, which means that the typical dwelling in Lehi is promoting for lower than its unique itemizing worth. Beneath is a desk detailing the most important 20 cities in Utah and their sale-to-list ratio metrics:

Utah’s Homes Are Spending Extra Time on the Market

One other helpful metric for gauging the extent of exercise in a sure housing market is the median variety of days a house on the market spends available on the market earlier than being purchased up. A small variety of days on market would replicate excessive ranges of exercise, excessive demand, and homebuying. A lot of days on market, then again, would counsel a slowdown in homebuying as properties on the market are actually sitting available on the market longer as a result of there’s much less demand.

Statewide, Utah’s median days on market is 46 days, as of March 2023. That’s a few month and a half. A yr in the past, nonetheless, the Utah housing market had a median days on market of simply 9 days. Which means there was a 411.1% year-over-year improve for this metric, or it elevated greater than five-fold in a single yr. And that’s on the state stage; lots of Utah’s largest cities displayed even greater year-over-year elevated:

With all 20 of Utah’s greatest cities witnessing their properties on the market sitting available on the market for considerably longer than final yr, it shouldn’t come as a shock that obtainable stock can be up year-over-year in these cities. As already talked about, statewide, Utah’s obtainable stock elevated by 86.8% from March 2022 to March 2023. Beneath the Utah housing markets with the best year-over-year improve in housing stock:

  1. St. George: 378.3%
  2. Logan: 82.1%
  3. Eagle Mountain: 58.5%
  4. Provo: 52.6%
  5. Layton: 37.7%

A associated metric to stock is month of provide: The variety of months it could take provide to be purchased up if no new properties got here available on the market. Contemplating obtainable stock in Logan is up by greater than 80% year-over-year, it is sensible that its months of provide has elevated by 187.5%: From simply 0.8 months in March 2022 to 2.3 months in March 2023. However St. George, which witnessed an virtually four-fold improve in its housing stock, skilled a year-over-year improve in months of provide of 280%: From 2 months in March 2022 to 7.6 months in March 2023. The state of Utah general skilled a comparable improve, with its months of provide rising by 150%, from 0.8 months to 2 months.

The Backside Line on the Utah Housing Marketplace for 2023

Taking collectively all the varied housing metrics deployed in our evaluation, each on the state stage and metropolis stage, it looks like the Utah housing market is clearly slowing down when it comes to exercise and, with the financial horizon trying stormy, there’s a great probability that the slowdown will persist.

To this point, the Utah housing market has been going by means of a interval of correction after the heady days of 2021 to 2022, when homebuying reached a frenzied stage. Rising mortgage charges and rising prices of residing (non-housing) have impacted housing market exercise throughout the US currently, and in Utah particularly. From March 2013 by means of August 2020, the median sale worth for a house in Utah by no means exceeded $400,000. Then, in September 2020, it crossed the road, reaching a median sale worth of $421,700. Throughout the homebuying fever of the 2021-2022, Utah’s median sale worth soared to a peak of $575,900 in Might 2022. It’s now all the way down to $525,900, which, nonetheless, is way greater than the pre-pandemic common. Subsequently, an outright collapse within the Utah housing market appears unlikely in 2023. However a continued slowing of exercise and weak-to-moderate demand, if not worse, appears possible.

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