Clients and Friends ask me all the time, “Hey Lewis, how’s the market?”
The real answer is complex but the key components are: Supply, Demand, Interest Rates, Jobs and the Economy. Below is an Executive Summary for you:

In residential real estate, a “Balanced Market” is about a 6 months supply of homes for sale. Less than 5 months supply is a “Seller’s Market” and more than a 7 month supply would be a “Buyer’s Market”.Because there were very few homes being built during the 2007 – 2011 recession, there was a shortage of homes and for the last decade we’ve been in a Seller’s market. Covid, supply chain constraints and low interest rates created a ginormous housing demand with very little supply which hyper accelerated the market and drove housing costs up dramatically.  In June of 2022, interest rates rose rapidly and peaked in October of 2023 around 8% and have been hovering around 7% since then but just within the last week or so rates have dropped to 5.75%. Lower rates are great news for home buyers today!

SUPPLY
These higher than what we were used to interest rates cooled the market considerably and we’ve seen our listing inventory creep up over the last 2 years.  In the state of Utah in August 2023 there were 11,583 homes for sale which equals a 3.7 months supply of homes. In August 2024 there were 13,324 homes for sale which is a solid 15% increase but it’s still only a 4 months supply of homes.

DEMAND
Home sales have stayed pretty constant. Year to date, in August 2023 in Utah we sold 39,487 homes and year to date in August 2024 we sold 39,904 which is a 1.1% increase.These statistics show that our housing inventory is still low, demand for homes is solid and we’re still in a seller’s market however our listing to sales ratio is normalizing which is good and moving towards a balanced market.

INTEREST RATES
are trending down! Currently mortgage interest rates are below 6% which is the lowest they’ve been for 1.5 years. With the lower interest rates and additional seller concessions we have seen an uptick in home sales and more movement in the market. Lenders have seen a dramatic uptick in loan applications and loan pre approvals. These new buyers are starting to house shop now.

EXPERTS PREDICT
that the US will see positive 2.7% home price appreciation in 2025 and Utah is poised to fare better than the rest of the nation thanks to a strong and diversified economy. For example, Utah’s unemployment rate is low at about 3.3% whereas the US unemployment rate is about 4.3%. Plus Utah has the highest birth rate in the nation which means continued demand and growth.

As a side note In August 2024 the average Days on Market for residential homes was 34 days which is great. This means the good homes sell quickly and the other homes sit on the market for a while until the sellers lower the price. There is more activity in our local real estate market right now than before and home sales are picking up.

I love real estate, talking about real estate, showing real estate and especially selling real estate! If you or someone you know has real estate questions or are thinking about buying or selling a home, please call me and I promise to take great care of them.

Sincerely, Lewis