The Yin and Yang of Real Estate
Opposite but interconnected forces. That’s how we’d characterize the market right now, which is trying to find its footing amidst fast changes in buyer demand. Home values are still up and most sellers are able to realize a really great price on the sale of their home. But that same value is also down quite a bit from nine months ago, when our market was at peak pricing. The force felt by the steep interest rate hikes has unquestionably changed our market.
Where are prices headed? There is still no firm consensus on this. Even our own local experts from the Kem C. Gardner Policy Institute disagree on where exactly the market will be in a few months. But what is probably most helpful to buyers and sellers considering a move, is to look at what today’s market value actually is, because that is information we do have. So let’s get to it. Here are the latest numbers for Salt Lake and Park City.
Salt Lake County, October 2022
Detached Homes, Year/Year
- $579,000 median sold price, up 6% from last year, but down 4.5% from last month
- 607 units sold, down 39% from last year, and down 20% from last month
- 35 median days on market, up from 9 last year
- 1.9 months supply of inventory
Park City Area, October 2022
Detached Homes, Year/Year
- $3,125,000 median sold price, up 30% from last year, and up 4% from last month
- 31 units sold, down 45% from last year, and down 24% from last month
- 83 median days on market, up from 18 last year
- 6.8 months supply of inventory
Inventory levels are still up. In both Park City and Salt Lake City the amount of homes available for sale as compared to last year is still significantly higher. Buyers have options now, and can actually really shop for homes. We’ve also noticed that the weekend open house culture is back, with lots of people out and about casually stopping in our open houses just to see what’s going on in the neighborhood. There is a great feel to the market right now; it is happy, exciting and engaging for buyers to be out shopping for a home right now.
Sales have slowed. Not surprising (and by design) given the drastic interest rate changes. But still an important point to watch. Sales are a lagging indicator of current buyer demand. So the raw number of sales at any given moment tells us how many buyers are out there shopping right now. We use this information to pinpoint demand for a particular neighborhood in order to precisely price a home for both buyers and sellers.
Mortgage rates dropped at the fastest clip in 40 years last week, falling from 7.08 percent to 6.61 percent on recent positive news about inflation, according to a survey released last Thursday by mortgage giant Freddie Mac. Roughly speaking, this dip in rates boosted buyer purchasing power by $12,000. So although sales have recently slowed, if rates continue to improve, they may very well pick right back up again.
What should buyers and sellers do now? First, learn how to read the market. If you’re a buyer and you have your eye on a home that’s been stuck on its price since this summer, that particular home is definitely overpriced. If you’re a seller listing your home right now, focus on the market demand and sales from the last two months and price your home accordingly.
Second, understand who is in the market now. The easy money that was in the market nine months ago is no longer there. Flippers and iBuyers (also flippers) have largely all exited the market because the business of flipping homes only really works when the market is skyrocketing upwards.
Today, the real estate market consists of real people who need to move, and quality builders who want to sell. Buyers who need a home and Sellers who need to sell. We’re back to regular people buying and selling because they need to, and that’s a really great place to be.
If the principle of yin and yang is that all things exist as inseparable and as contradictory opposites, then the ebb and flow of our real estate market feels perhaps a bit more natural. Maybe even a bit more welcome.
If you’re considering selling and want to understand your options, give us a call. We would love to help you decide if now is the right time for you to make a change. Call us at 801.949.9878 when you’re ready.
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