Salt Lake County’s housing market has been on fire in recent years. It continues to be a topic of great interest for both sellers and buyers as inventory tries to match demand and home prices experience a slight increase compared to the previous quarter.
Let’s explore the key highlights and most recent insights, including the median sales price, median Days on Market, mortgage rates, and number of homes sold that shaped the real estate landscape of Salt Lake during the second quarter of 2023.
Number of Homes Sold
In this year’s Q2, 2,207 homes were sold, a 24.55% increase to the homes sold in Q1. This increase can be seen as a seasonal boost, so don’t mistake it as clear evidence of a market that is rebounding. Ongoing market trends–which we will describe below–contributed to a 25.06% decline in sales from the same quarter last year.
Low inventory is one of the major contributors to the decrease in sales. Builders are still trying to catch up with the area’s strong demand for new housing and less resale homes are entering the market.
Another factor is the impact of higher interest rates. Potential sellers, who are benefiting from low interest rates (around 3-4%) in recent years, may be hesitant to make a move. This reluctance stems from the prospect of replacing their next home and mortgage rate with a significantly higher interest rate of around 6-7%.
As a result, most homeowners are more likely to hold onto the current low-rate mortgages and not move unless they encounter a circumstance that deems it necessary. Consequently, the shortage in the supply of homes that have entered the market and the demand from buyers who want to own has resulted in reduced Days on Market and increased prices.
Median Sales Price
In Salt Lake, the median price of a home sold in Q2 2023 was $595,000, an increase of 6.11% from the Q1 of this year. However, this represents a 6.56% decrease compared to the same quarter last year (which recorded the highest median sales price over the past five years).
Historically, let’s take a look at what has happened to the median sales price over the last five years in Salt Lake. In 2018, the median sales price was $354,999. By 2022, the median sales price had soared to $600,385… an incredible increase of 69.12%.
Median Days on Market
In comparison with the first quarter, the median Days on Market for Q2 was 15, representing a 64.41% decrease from Q1 of 2023. However, this is an increase of 150% from the same quarter last year.
The low inventory of homes and the urgency for some buyers to enter the market and enjoy the benefits of homeownership may be contributing factors to this decline. This is something that we will continue to monitor.
Mortgage rates have been rising in recent months, and this has a significant impact on the housing market. As of the time of writing, the 30-year fixed mortgage average reached 6.96% and the 15-year fixed mortgage average hit 6.30%.
Higher mortgage rates in Salt Lake has had a massive affect on affordability and demand for homes in the area. It may be discourage potential buyers from entering the market, leading to a slowdown in demand and which also impacts home prices. There are ways to obtain a lower interest rate, such as a seller paid 2/1 buy down or seller financing… please contact me directly if you would like more details.
Traditionally, Q2 is recognized as the busiest quarter of the year for real estate. Salt Lake’s housing market is anticipated to remain active in Q3 2023.
Understanding the changing dynamics and identifying trends is crucial for navigating the market and staying ahead of the curve. It is more important than ever for sellers and buyers to seek guidance from professionals who closely monitor the trends. As we move forward, please don’t hesitate to reach out to discuss the best approach for you in this ever-changing housing market.