Nationally, three things are happening in the real estate market. First, home sales have fallen below last year’s levels; second, home values are going up at a slower pace; and third, buyer demand is softening.
However, while the future looks good for buyers, we’re not there yet. Many experts believe we won’t see a reversal from a sellers’ market until 2020. And then don’t expect that reversal to include prices.
In Utah County single-family home prices have increased 5 percent over the last 12 months, from an average of $362,360 in October 2017 to an average of $380,677 in September this year, according to the Wasatch Front Multiple Listing System. The average price peaked in August at $395,138. Also in August the average seller received 98 percent of the asking price while in September that dropped a point to 97 percent. The average home measures a bit over 3,000 square feet at $128 a square foot average with four bedrooms and three baths. The average days on the market in September was 48, up slightly from the average of 45 days in August. However, days on the market have been increasing steadily since the beginning of summer.
The Utah County condominium, townhouse and attached home market has a different story to tell with an appreciation rate over the last 12 months of 10.2 percent starting with an average sales price of $222,284 in October 2017 and ending with $244,976 last month. Average prices peaked in August at $250,400 with sellers getting asking price or more most of the year. In this market properties take an average of 26 days to sell.
The average condo, townhouse or attached home measures 1,716 square feet, has three bedrooms and 2.5 baths with an overall average price per square foot of $146.
The website www.KeepingCurrentMatters.com (KCM) quoted several housing economists in a recent article saying sellers have at least 18 more months of holding the upper hand.
“These seller challenges don’t indicate we’re suddenly in a buyers’ market – we don’t expect market conditions to shift decidedly in favor of buyers until 2020 or later. But buyers certainly are starting to balk at the rapid rise in prices and home values are starting to grow at a less frenetic pace,” Dr. Svenja Gudell, Zillow Chief Economist said.
Danielle Hale, Chief Economist of Realtor.com seems to agree. “The signs are pointing to a market that’s shifting toward buyers. But, in most places, we’re still a long way from a full reversal,”she said.
KCM also reported that Pulsenomics, Inc. surveyed more than 100 economists, real estate experts and investment and market strategists and discovered that 43 percent of them expect a shift in the market by 2020. Whatever the outcome, expect a more sustainable growth pattern in coming years and affordability, according to the well-respected ‘Z’ Report.
While it’s cheaper to buy than rent in most of the United States, It’s still cheaper to rent in the Mountain States, including Utah, by at least $50 a month, according to a study by GoBanking Rates. But with appreciation continuing to rise, even though at a slower pace, it still makes sense over time to buy a home. Studies have shown that people who own a home have a net worth 44 times greater than renters, KCM says.