Utah’s Housing Market Is Wanting Iffy In 2023

With housing markets throughout the USA thrown into an odd limbo as a consequence of rising rates of interest, dampening demand, however sticky unaffordability, it’s essential to try to work out what precisely is occurring on-the-ground. Whereas in previous articles we targeted 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 degree and the housing markets of its 20 largest cities.

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

The Utah Housing Market in 2023

Utilizing knowledge sourced from Redfin
, we analyzed the Utah housing market and the housing markets of the state’s 20 largest cities, throughout a spread of essential housing metrics, together with: Median sale value, the variety of month-to-month residence 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 checklist value ratio, and the proportion of energetic listings with value drops in a given month.

In accordance with the newest knowledge, as of March 2023, the median sale value for a house in Utah total is $525,900. That’s down by 5.8% from the earlier 12 months, when the median sale value was $558,200 in March 2022. Contemplating how scorching housing markets had been by the primary half of 2022, the year-over-year decline from 2022 to 2023 isn’t too dangerous 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 value displayed double-digit development: 10.7%, 27.7%, and 23.7%, respectively.

Alternatively, within the pre-pandemic years, development in Utah residence costs was extra modest. From March 2017 to March 2018, the median sale value grew by 8.7%, from $280,300 to $304,600; and from March 2018 to March 2019, Utah’s median sale value 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 fuel pedal on residence value will increase.

The moderation in Utah’s housing market exercise will be seen in a number of the different housing metrics we compiled and analyzed. As an example, obtainable for-sale stock has modified dramatically 12 months to 12 months from 2017 to 2023. From March 2020 to March 2021, regardless of (or, due to) the impression 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 biggest 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 total:

Utah Housing Market 2023: Prime 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 carefully observe the traits for the statewide Utah housing market total. Though, there are after all exceptions.

Of Utah’s 20 largest cities, Draper posted the best median sale value in March 2023, at $679,200. That determine is down a substantial quantity since final 12 months: From a median sale value of $820,000 in March 2022, Draper residence costs plunged by 17.2% in only one 12 months to $679,200. Certainly, Draper skilled the largest drop in median sale value year-over-year behind solely the town of Lehi, which skilled a lower of 19%, from $566,500 in March 2022, right down to $458,995 in March 2023. In reality, 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 residence 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 residence costs in Utah’s essential housing markets.

Take a look at the desk beneath 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 value. These three cities, not coincidentally, additionally ranked among the many high 5 cities the place the sale-to-list value ratio — the imply ratio of every residence’s sale value divided by their checklist value overlaying all properties — has additionally declined dramatically. When properties promote for above their checklist value, 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 powerful, and costs are being pushed up. Nonetheless, having a sale-to-list ratio of lower than 100% signifies that the ultimate sale value was decrease than the unique listed value and will mirror a slowing in homebuying exercise and decrease demand.

For instance, in Lehi, the sale-to-list value 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%, right down to 96.4%, which means that the typical residence in Lehi is promoting for lower than its authentic itemizing value. Beneath is a desk detailing the biggest 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 in the marketplace earlier than being purchased up. A small variety of days on market would mirror excessive ranges of exercise, excessive demand, and homebuying. A lot of days on market, however, would recommend a slowdown in homebuying as properties on the market are actually sitting in the marketplace longer as a result of there may be much less demand.

Statewide, Utah’s median days on market is 46 days, as of March 2023. That’s a couple of month and a half. A 12 months 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 12 months. And that’s on the state degree; lots of Utah’s largest cities displayed even greater year-over-year elevated:

With all 20 of Utah’s largest cities witnessing their properties on the market sitting in the marketplace for considerably longer than final 12 months, it shouldn’t come as a shock that obtainable stock can also 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 will take provide to be purchased up if no new properties got here in the marketplace. Contemplating obtainable stock in Logan is up by greater than 80% year-over-year, it is smart 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 total 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 assorted housing metrics deployed in our evaluation, each on the state degree and metropolis degree, it looks as if the Utah housing market is clearly slowing down by way of exercise and, with the financial horizon trying stormy, there’s likelihood that the slowdown will persist.

To this point, the Utah housing market has been going by a interval of correction after the heady days of 2021 to 2022, when homebuying reached a frenzied degree. Rising mortgage charges and rising prices of dwelling (non-housing) have impacted housing market exercise throughout the US currently, and in Utah particularly. From March 2013 by August 2020, the median sale value for a house in Utah by no means exceeded $400,000. Then, in September 2020, it crossed the road, reaching a median sale value of $421,700. Throughout the homebuying fever of the 2021-2022, Utah’s median sale value soared to a peak of $575,900 in Might 2022. It’s now right down to $525,900, which, nonetheless, is far greater than the pre-pandemic common. Due to this fact, 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.