This last year has seen seismic changes in inventory, price and buyer expectations in the Greater Salt Lake area. Seasoned real-estate veterans will tell you the 2021 Greater Salt Lake housing market is the most competitive they’ve ever seen. But don’t despair, here is a brief explanation of what’s happening and 8 tips for Wasatch Front home buyers and why you should stay positive.
WHY THE MARKET IS SO HOT
In 2020, the Greater Salt Lake area became one of the country’s Top-10 most favorable areas to relocate. Prices are soaring as home inventory faces new-build shortages and an influx of Millennial and Gen-Z buyers. Home inventory in Utah is down as much as 57% from last year. As such, Utah home prices have risen 15.4% in the last year, with some highly-sought after Greater Salt Lake neighborhoods showing 20-40% home-price gains. Demand from the existing population, out-of-state investors and newcomers will continue to impact availability and price.
HOW DOES THIS AFFECT YOU AS A BUYER
Buying a home along the Wasatch Front has never been more competitive. The Greater Salt Lake area is ranking #1 in the nation for multiple offers with 29% of sale transactions in cash. Typically homes under $550,000 are receiving 15-20 offers shortly after listing. Homes between this amount and $850,000 are receiving 5-10 offers. And homes over $850,000 are sitting on the market a bit longer but still seeing 1-2 offers within one to two weeks.
While buyers shouldn’t be discouraged from looking for a new home, they should set some expectations and have some tools in their belt.
8 TIPS FOR WASATCH FRONT BUYERS
#1 Set Realistic Expectations
Gone are the days where it takes 1-2 months from start to finish to begin looking at and close on a home. Expect to spend 3-6 months touring and making multiple offers before securing a contract.
#2 Find Cash (If You Can)
It is no secret that sellers like a cash offer, and right now pre-approved buyers are being beat out by competitors with cash. If you have resources for cash, now is the time to call in on that.
#3 Get a Fully Underwritten Mortgage Pre-Approval
When faced with multiple offers, sellers will choose their best and safest option. Aside from a cash offer, a fully-vetted pre-approval letter is the next-best thing. Having a fully-vetted pre-approval makes your offer more competitive. It assures the seller that they won’t run into any issues during escrow.
#4 Know How Far You Will Go
Right now we are seeing buyers wave significant safety nets to get their offer taken seriously. Some people are waiving due diligence, financing and appraisal contingencies. Many are making part or all of their earnest money non-refundable. We are also seeing appraisals coming in below contract price with buyers making up that difference in cash. We have our opinions on the risks that you should and shouldn’t take and advise our clients as such. But you need to figure out beforehand how far you are willing to go to secure the contract.
#5 Schedule Home Tours ASAP
Top listings are getting offers before the open house and often sign unseen. Secure a home tour as soon as a listing hits the market. Even if you are not 100% sure you want to tour the home, it’s better to reserve an appointment just in case.
#6 Don’t Be Afraid to Tour a Second-Pick Listing
If you are already in a geographic area touring a home and there is another listing nearby, make an appointment to see it. In fact, go ahead and tour any second-pick listing you are on the fence about. You never know when a listing is going to surprise you.
#7 Ask Questions Before Signing a New-Build Contract
If you are considering purchasing a new build in 2021, it is a wise investment. Home owners closing on their homes this year are expected to have already earned over $100,000 in equity. Prices are going up that fast! But if this is the route you are taking, know that game rules have changed. First, many new-build contracts have up to a 2-year waiting period. Second, many builders are turning their new build into a bidding war. Third, with supply chain disruptions and construction backlogs, new-build prices are going up. Check with your builder to see what conditions they have for construction deposits and price increases. Make sure you ask the right questions before signing your contract and hire a Realtor to represent you!
#8 Hire a Realtor
Finally, don’t make the mistake of buying, or building, a home alone. If ever there was a time for a competent Realtor, it is now. At Niche Homes, we offer representation that will protect you financially and advocate for your best interests. You can rely on our grit and relationships with industry players to help you secure your dream home. Our colleagues trust us and know they can take our clients’ offers seriously. Within a stack of 25 home offers, we stand out! Contact us for a no-pressure conversation about buying a home in 2021 and how we can help you.