A whirlwind, a roller coaster, a correction. All of these words accurately describe the real estate market in 2022. The unsustainable intensity of 2021 came to an abrupt halt as interest rates climbed between January and October of 2022.
It was, “the sharpest nine-month increase in mortgage rates in over 50 years” according to James Wood, Ivory-Boyer Senior Fellow, Kem C. Gardner Policy Institute, at the University of Utah. Steve Perry, president of the Board of Salt Lake Realtors has called 2022 “the year of the reset”.
Caption: Niche Homes team members (Kerry Harding, Hilary McDonough, Karly Nielsen, and Sara Young) with Lawrence Yun, National Realtor Association Economist, at the Salt Lake Board of Realtors Housing Forecast on January 13, 2023.
We’re pleased to predict that 2023 will be more, well, predictable. Most of the forecasts we’ve read (of which there are many) share this common theme: 2023 will be a return to normalcy with stabilizing mortgage rates and slowing increases to home prices. Inflation is predicted to moderate and Utah’s strong economy will continue to support demand.
After the ups and downs of the past few years, we’ll gladly take stabilization and normalcy.
Buyers can breathe a sigh of relief. Reasonable terms in the Real Estate Purchase Contract have returned. The process of working with buyers, sellers, lenders, and title has gained efficiencies from the intensity we saw over the last two years. Gone are the days of super-competitive showdowns for the only house that suits your needs. Buyers will have more time and more choices in 2023.
In 2023, we advise sellers to focus on making the right first impression. As buyers begin to have more choices, they will begin to be more choosey. Implementing the Niche Homes Way and pricing your home correctly is critical to your success. We do careful market analyses and always advise our clients to start with the right listing price. When representing sellers, we’ve maintained a list-to-close price of 104%, despite the slowing of home sales. The Niche Homes Way continues to add value and is a benefit to our clients, who sell their homes in six days or less, on average.
As you’ve likely noticed on your property taxes and monthly market reports from us, home prices in the Salt Lake area have increased dramatically over the past few years. According to the Federal Housing Finance Agency, the Salt Lake City metropolitan region ranked 13th in terms of year-over-year house price growth among the nation’s top 100 metro areas through the first quarter of 2022. According to Jim Wood of the Kem Gardner Institute, “It is still a strong market. Prices have support given our [optimistic] economy.” We anticipate that home prices in Salt Lake County will continue to increase, but at a more modest rate, throughout 2023.
The overall outlook for the real estate market in 2023 is positive. The deceleration of Consumer Price Inflation and the stabilization of mortgage rates will likely motivate people to “get off the fence” and into the business of moving again. If you or someone you know is considering a move, we would appreciate the opportunity to talk with you about your options.