Looking at 2020 retrospectively, it’s safe to say “unpredictable” and “unprecedented” were the words of the year.
Earlier in the year, when the COVID-19 virus rapidly spread across the globe, most industries and economies suffered — ours included. We saw our Salt Lake County real estate market start off the year with two months of double-digit decline.
However, things turned around very quickly. With over 19,000 total sales in Salt Lake County in 2020, last year beat a 15-year record for the highest amount of overall homes sold, edging out the previous record of 18,907 sales in 2005.
Home sales in the Park City market also beat a 15-year record with 2,940 total sales in 2020, surpassing the 2,698 homes sold in 2005. Although distinctively different markets, the Salt Lake City and Park City regions reached new highs last year, all due to the same underlying fundamentals and trends continuing into 2021.
What’s Causing This Hot Market?
Extraordinary job and population growth continue to drive demand for housing, which in turn continues to push home prices up. Coupled with the extreme drop in interest rates this year due to the Fed’s response to Covid, housing prices have rapidly increased.
In 2020 the median sales price of a single-family home in Salt Lake County increased almost 15% to $440,000. In Park City, the median sales price of a single-family home increased almost 40% to $2,075,000.
Where’s the Inventory?
If you’ve been on the MLS lately and felt like there wasn’t that much inventory, you’d be correct. The Utah housing market is still feeling the effects of the Great Recession — when the growth in households exceeded the increase in housing units, we experienced a housing shortage. Years later, we’ve never quite caught up, with the current shortage estimated at around 5,500 units.
Covid amplified this in two ways: first, we didn’t see the normal summer listing surge this year. Second, residential construction continues to face limiting factors, including higher costs and longer delivery times for building materials, and an ongoing labor skills shortage. So although homebuilder confidence is at record highs, the rate at which these homes can actually become available to buyers remains limited.
What does that look like?
- January 2018 — 633 single-family homes available for sale in the Greater Park City area.
- January 2020 — 260 single-family homes available for sale in the Greater Park City area.
- January 2018 — 1,758 single-family homes available for sale in Salt Lake County.
- January 2020 — 632 single-family homes available for sale in Salt Lake County.
Our 2021 Utah Housing Market Predictions
Entering the new year, we believe home sales will continue to break records, which will continue to push home prices higher.
Why? Well, Utah’s economic forecast includes significant employment growth, continued population growth (perhaps even higher with the global shift to remote work), and mortgage rates are expected to remain around 3%.
The 2021 statewide economic forecast includes:
- Employment growth at 3.8% and an increase of 58,000 jobs, which would be the largest single-year increase in jobs in Utah’s history
- Demographic growth continuing with a population increase of nearly 15,000 and a net in-migration of 4,000 (this number could be underestimated as the market segment of new remote workers is still unknown)
- Tight labor market returns with unemployment below 3.5%
We see the 2021 housing forecast following suit, with another record-breaking year ahead for both Salt Lake and Park City. Our crystal ball predicts that your home value will increase again next year — easily a 4 to 9% increase in value.
Our Personal Hopes for 2021 Utah Housing Market
As for our team at Julia Splan and Associates, we hope 2021 brings with it more opportunities to spend time outside, interacting with our clients in-person safely.
We’ve dearly missed meeting with you face-to-face. Learning about your Utah real estate questions, concerns, and ambitions is what breathes life into our jobs, so we all hope to have more room to stretch out and breathe in the new year.
Are you ready to take advantage of Utah’s record-breaking selling market? Learn about preparing your home to sell for its full value by visiting our selling page here. Then, contact us here to get started on your sale.