Here are the numbers from the Wasatch Front in 2019:
- Single-family home sales: 38,024
- Condo and townhome sales: 10,305
- Average home price: $376,000 (a 7% year-over-year increase)
- Average days on market: 51 (a 16% year-over-year increase)
- Absorption rate: 4 months (a 20% year-over-year increase)
The law of supply and demand, which drives all economies, says that if the supply is down and the demand is up, then prices go up. We’ve had a pretty good ride in terms of home price increases across the Wasatch Front over the last six years.
In real estate, a level market is when you have between four and six months’ worth of available homes at any given time. If the supply drops below that point, it creates a seller’s market with upward pressure on pricing. If supply rises above that point, the market becomes a buyer’s market. Our market has four months of inventory, which is being driven by an increased supply of homes and lowering affordability. While home appreciation is a good thing, over time, it can put limits on what buyers can purchase, especially first-time homebuyers.
We ended 2019 with some political volatility, which has continued to impact both the bond and stock markets; the big items impacting the market are our trade agreements with China and our relationship with Iran and the Middle East. If this volatility continues throughout the new year, we expect interest rates to remain low, and if it’s resolved, rates will likely rise as they react to inflation.
As always, if you have any questions about real estate or the market, don’t hesitate to reach out to us. We’re here to help you.