In 2023, the Beehive State saw median home prices increase, although the number of homes listed for sale was below the year before. As with most other white-hot real estate markets, demand still exceeds supply, so it's a great time for sellers and less ideal for buyers.
That said, if you're looking to buy a home, the Utah housing market can work in your favor if you know what you're doing and you look in the right places. In 2024, prices are still expected to go up, but with interest rates stabilizing (and predicted to fall), buying a home may be easier this year than in 2023. Keep reading to uncover valuable information that can empower your decision in the ever-changing Utah real estate landscape.
Trends in Utah's 2023 Real Estate Market
In Utah and much of the country, 2023 was something of a tumultuous year. Prices rose steadily at the beginning of summer, then fell dramatically, then rose again. By October 2023, the median selling price for single-family homes in Utah sat at $540,000, which was a 1.5 percent increase from 2022.
On the flip side, the number of available homes was far short of demand. Toward the end of 2023, Utah only had an estimated four-week supply of new homes, well below the target of a six-month supply.
As far as demographic shifts, people are migrating away from Salt Lake City, but they don't want to travel too far. According to data, the fastest-growing cities in 2023 were Lehi, Herriman, Draper, and Saratoga Springs. Each of these cities is either a suburb of Salt Lake City or relatively close by (Draper is 20 miles south).
One notable factor is that these migrations are not necessarily due to the cost of living. In Salt Lake City, the average cost of living is about eight percent higher than the national average. However, in places like Lehi and Draper, it costs about 17 to 25 percent more to live there. So, migration is likely to have to do with other factors, such as quality of life or economic opportunities.
The Future of Utah's Real Estate in 2024
In most states, the closer you get to a big city, the higher the cost of living and the higher the median home prices. However, in Utah, it seems to be the opposite. While home prices can be lower in other cities surrounding Salt Lake City, the cost of living is often much higher. In some areas, it's almost twice as expensive as living in the greater metro area.
There are a few factors at play, but one of the most significant is a lack of housing across the board, let alone affordable housing units. Compared to other states, Utah is falling way behind demand, which will only increase home prices and make it harder for first-time buyers to get into the market.
Additionally, mortgage interest rates are still high, hovering around seven percent. While they are predicted to go down in 2024, they may not be able to offset the higher cost of living. Currently, Utah is ranked as one of the 10 "most difficult" states for first-time buyers to buy a home in, and that won't necessarily change anytime soon.
Price Trends Analysis
The Utah housing market is seeing some significant gains in the prices of new and used homes, but the number of listings is still falling. So, there's increased demand and pressure for the homes on sale, making it more lucrative for sellers.
That said, houses aren't being bought up as quickly in Utah as in other states. For example, the average time spent on the market in Utah is 49 days. In Michigan? That time is only 26 days, meaning it takes almost twice as long for a home to sell. Similarly, many states only have a two-month supply of houses. In Utah, there's a four-month supply.
But how does that coincide with the fact that there are fewer homes for sale? A big reason could be that the median sale price is around $540,000, no matter where you live in Utah. For example, in American Fork, the median price is $534,000, while in North Ogden, it's $565,000. Elsewhere in the US, home prices fall dramatically as you move out of a major city, but they remain mostly constant in Utah.
Considering that the median home price in the United States is $412,000, Utah is more expensive than most other states. While it's still nowhere near the median price in places like California ($800,000) or New York ($832,000), it's still higher than Southwestern and Midwestern states.
Another interesting element is that the number of homes sold above market price was about 26 percent, which was a slight increase from 2022. However, the number of homes that saw price drops was about 53 percent, so it looks like many homeowners had to settle for less than their listing price. Overall, though, the sale-to-list price is for 2023 was healthy.
Impact of Economic Factors
Although housing prices are relatively high across the Beehive State, they're still selling at robust rates. Part of the reason could be that Utah is one of the best states in which to start a business, and Salt Lake City is ranked as the third-best city in which to find a job. Overall, the economy in and around Salt Lake City is thriving, which drives demand for housing and helps increase wages.
Additionally, the quality of life in Utah is superior to most other states. According to US News and World Report, Utah ranked as the best state in which to live in 2023. So, despite the relatively high cost of living, it's worth the expense for new and existing residents.
Diverse Trends Across Utah
When looking at the Utah housing market, it helps to narrow your comparison to different cities and counties. This way, you get a sense of what it takes to live in different parts of the state. So, let's break down the Utah real estate market into a few sectors: Salt Lake City, Provo, Mapleton, Syracuse, and Park City as of 2023.
Salt Lake City
- Median Home Price - $559K (up 3 percent)
- Number of Homes for Sale - Roughly 850
- Buyer's or Seller's Market - Buyer's Market
Provo
- Median Home Price - $489K (up 3 percent)
- Number of Homes for Sale - Roughly 200
- Buyer's or Seller's Market - Buyer's Market
Mapleton
- Median Home Price - $799K (down 6 percent)
- Number of Homes for Sale - Roughly 200
- Buyer's or Seller's Market - Buyer's Market
Syracuse
- Median Home Price - $570K (up 3.7 percent)
- Number of Homes for Sale - Roughly 150
- Buyer's or Seller's Market – Neutral Market
Park City
- Median Home Price - $2.2 million (down 10 percent)
- Number of Homes for Sale - Roughly 1,000
- Buyer's or Seller's Market - Buyer's Market
Buyers and Sellers in Utah's Housing Market
As you can see from the statistics above, most of the housing markets in Utah are favorable to buyers despite home prices hitting record highs. That said, you can still contend with bidding wars and high mortgage interest rates, so here are some tips to navigate the market in 2024.
For Home Buyers:
- Focus on Where You Want to Live - Since most of the markets in Utah are relatively expensive, you should pay closer attention to other factors like job opportunities, school districts, outdoor recreation, and more. From there, you can start searching for a home.
- Buy a New House if Possible - One of the best ways to avoid negotiating a home price is to buy directly from a developer. The price is typically final, and the homes are move-in ready much of the time. Plus, it won't need as much maintenance for the first few years.
- Refinance When Interest Rates Drop - Just because rates are high right now doesn't mean you must pay a ton a month forever. Once the Federal Reserve drops rates, there may be an opportunity to refinance and save money long-term.
- Negotiate - Sellers don't have as much negotiating power in Utah as they do in other states, so use that to your advantage. If you have a decent down payment or can pay earnest money, you can potentially lower the listing price and get a better deal.
If you're selling a home in Utah, you may see dollar signs as you look at median home prices skyrocketing and inventory numbers stalling. That said, most markets favor buyers right now, so here are some top tips:
For Sellers:
- List High, Sell Lower - Most buyers will try to negotiate your price down, so if you list a little higher than the market average, you have some leeway.
- Focus on Your Next Move - If you're selling a house but want to stay in Utah, make sure your earnings can cover the majority of your next house. If not, you may have to take out a sizable mortgage loan.
- Determine if an Agent is Right For You - Real estate agents do a lot of work to sell your home, and they can sometimes sell the property for a higher price. But, they often charge up to three percent in commission. Since demand is so high, you may be able to sell your home yourself, but be aware of the time and work involved.
The Future of Utah Real Estate
Because Utah is such a desirable place to live, people will continue to move here from other parts of the country. However, with home prices and the cost of living so high, buyers aren't necessarily ready to engage in bidding wars just yet over the current inventory.
So, the future of Utah's housing market is a bit uncertain. Realistically, home prices will continue to increase until more properties are developed to bridge the gap between supply and demand. However, while most Utah cities are growing, they're not doing so at the same rates as other parts of the country.
In 2024, some areas may become more advantageous for sellers, but the market overall will likely stay relatively neutral.
The Bottom Line on Utah’s Housing Market
Utah has a unique real estate market, and it will continue to see various ups and downs in the years to come. Since most of the population is near the Great Salt Lake, there’s a chance that developers will look to expand housing east and west to help increase the supply of homes to match demand.
Nonetheless, higher prices and living expenses are giving buyers pause, especially those looking to purchase a home for the first time. This incongruency will likely keep going beyond 2024, but it's unclear how long before the market shifts dramatically in one direction or the other. Buying a home in Utah doesn't have to be a struggle. Century Communities has multiple properties available in cities like North Ogden and American Fork, so you can start living your Utah dream sooner than you might think. Start your home search today, and see what's available in the Beehive State.