The Laws of Supply and Demand Always Apply
Reports about the uncertainty of the housing market are pervasive. Are we headed for a crash? Is home ownership no longer an option for the average American? We’d like to assure you–the sky is not falling.
Utah is often an outlier with national housing trends. Our state’s robust economy, steady job growth, and migration from other states all work as protective factors. Home values have accelerated rapidly over the past few years and are expected to hold steady. While there has been a slight dip in sales following rate increases, there is no need to panic about an impending crash.
According to Realtor.com, between 2012 and June 2021 12.3 million households were formed in the United States and only 7 million single-family homes were built. These numbers clearly illustrate the supply shortage that our nation has faced over the past decade. These issues were further exacerbated over the past two and a half years by the labor shortage and supply chain problems resulting from the pandemic. The crunch has been even more intense in the West, where people have migrated for larger homes and lots as remote work has become more common.
While limited supply is an important part of the equation, the prevailing factor working favorably for Utah homeowners and their home values is consistent demand. As previously stated, demand for homes in the intermountain region has grown exponentially as remote work has gained traction. In April 2022, The Wall Street Journal listed Salt Lake City as having “the hottest job market in the U.S.”.
While recent increases in mortgage loan rates certainly dampen demand, the long term shortage in supply, coupled with Utah’s strong economy, are expected to protect home prices in the state from falling.
This is all good news. The housing market has been a wild ride over the past few years, with many long standing cautionary tenets being thrown to the wind. Buyers are finding themselves in a stronger position to negotiate. The pressure to make exorbitant offers and waive contingencies is starting to fade. Re-establishing a healthy equilibrium will benefit everyone in the long run.
Each neighborhood along the Wasatch Front has its own nuanced experience with market adjustments. The Niche Homes team understands how these dynamics impact our transactions. We have professional relationships with knowledgeable lenders and reliable title companies to ensure that our clients have the best home buying options.
We strive to give you relevant data that guides informed real estate decision making. If you’re considering buying or selling a home, please give us the opportunity to tell you more about our top-dollar strategies, industry connections, and impressive negotiation skills.