Imbalanced Market Pushes Utah Home Prices To Record High

SANDY, Utah – Buyer demand, coupled with a lack of available homes on the market, pushed home prices to a new record high in May, according to a new report from the Utah Association of Realtors.

The median home sales price in Utah increased by $100,000 in just the last year to $435,000. That calculates to a nearly 30% increase from May 2020, when the median sales price was $334,974.

In May 2019, the median sales price in Utah was $321,277.

“Robust buyer demand, fueled by low mortgage rates, continues to outpace supply, which remains near historic lows,” the report said.

The number of active properties available for sale in May of this year was nearly 62% lower than in May of 2020. There were 4,773 homes for sale, compared to 12,486 homes for sale in 2020 and 14,156 homes for sale in 2019.

“With such limited supply of existing homes to purchase, all eyes are on home builders to provide a much-needed boost of inventory to the market to help meet buyer demand,” the association’s May 2021 Monthly Indicators report said. “However, increasing material and labor costs, along with supply chain challenges, have contributed to significantly higher construction costs, with builders passing these costs on to homebuyers.”

Utah has less than a one-month’s supply of housing inventory. The association said the state needs a six-month supply of homes for sale in order to reach a balanced market between buyers and sellers.

“Summer is usually our busiest time of the year here in Utah,” said Caro Norton, who owns New Star Real Estate in Vernal and Roosevelt. “We’re definitely seeing things ramping up.”

Norton said that Utah’s housing market is in unprecedented territory. Since becoming an agent in 2004, she said this is the first time that nearly all of her listings are consistently under contract and that she rarely has active listings.

“If you put your home on the market on a Thursday, you’re looking at meeting with your realtor on Monday to sift through probably 30, 50 or more offers — and good offers and good people — but you can’t sell one house to that many people,” said Norton, who is also the current president of the Utah Association of Realtors.

Norton said there is a lot of concern about housing affordability. The May report indicates that families making the median income in Utah only has 88% of the income necessary to qualify for the current median-priced home.