Something new everyday: A snapshot of Utah’s housing market
What used to be outrageous is now the norm in Utah’s housing market.
Driven by historically low inventory and a generation of millennials coming of age and ready to buy their first house, prices and competition have soared over the last year.
“It's almost like a geopolitical event in a way,” said Dejan Eskic, a researcher with the Kem C. Gardner Policy Institute. “Every day there's something new.”
To buy a house, people are putting down non-refundable deposits and offering many thousands above the asking price. They’re waving inspections and ignoring the appraised value of the house. Those kinds of offers were almost unthinkable just a few years ago.
“Most of my sales right now are $30,000-$100,000 over the list price,” said realtor Matt Ulrich.
Erika Wiggins, an agent who specializes in the Sugar House neighborhood in Salt Lake City, said one of her clients offered a $20,000 non-refundable deposit and up to $70,000 over what the bank said the house was worth, on top of an offer that was already many thousands over the list price. It was rejected.
“Personally, as a professional who's been doing this for almost 18 years now, I don't like it,” Wiggins said. “It's not something I feel like is a healthy space, but my clients are doing it.”
There’s a certain desperation in the market, she said. Adam Kirkham with the Utah Association of Realtors said he’s shown up to open houses with 30 other people looking to make an offer. He said he later called the selling agent, who told him 100 people showed up in one day.
Record Highs and Record Lows
According to the association’s latest monthly report, there were just 2,778 homes for sale in February, compared to over 9,000 during the same period in 2020. That's the lowest number since 2003 when the organization began collecting data. It translates to about half a month of supply, where a market balanced between buyers and sellers typically has six months of inventory.
More than half of Utah households were unable to afford the median-priced home in 2021, and nearly three-quarters of renters were already priced out in 2020.
Wiggins said most of her clients are in their 20s and 30s and tend to work in high-paying fields like tech and healthcare, though Ulrich said he’s seeing more buyers getting help from their parents or having people co-sign their loans.
Eskic worries the conditions are exacerbating inequality, allowing those who can put down massive deposits to build equity as the market shows no signs of slowing. Those who can’t afford to buy are stuck with rapidly increasing rents, spending more money but getting none of the financial benefits of owning.
Wiggins said that is where the desperation comes in. People know that buying a house is one of the primary ways to accumulate wealth in the U.S., and they don’t want to be left behind.
Still, she said it’s not impossible to buy a house, and not every deal requires such alarming conditions. One relatively low cost alternative, she said, is to offer sellers some extra time in the house after the deal closes. She said that can give them some confidence that they’ll have a little more room to venture out into the market themselves.