SALT LAKE CITY (ABC4 News) – Utah’s real estate market could be taking off again pretty soon, after the COVID-19 pandemic left the market in limbo for the last month and a half. Local experts are anticipating a surge in property listings come summer or fall.
“Before the pandemic hit, the market was pretty normal. It was tracking somewhere close to the 2018 numbers. We were facing, at that point, a pretty high demand and our inventory levels were very low,” said Ron Snow, principal broker for RE/MAX Associates.
He went on to say, “But once the pandemic hit, we immediately saw a 60 percent drop in our scheduled showings on homes. We are 1,000 active listings below where we were last year.”
MaKaibree Reese and her husband were ready to expand their family and move into a bigger home, shortly before the virus outbreak hit the state. They listed their home in downtown Salt Lake City about a month ago.
“It was a seller’s market. My neighbors’ homes were selling in like five days,” she said. “They’d put in on the market and they’d have offers same day, next day. It seemed like everyone was going into contract in five days or less.”
Days turned into weeks for them with seven showings, but no written offers. Since then, Reese said they’ve dropped their selling price by $25,000.
“It’s been an interesting experience. We’ve had to pause our plans to foster/adopt a child. It was not what I was expecting at all. We’re just doing our best to get it sold. We really want to move to a bigger home. We were at the point where we were ready to take in another child,” she said. “I do think this is a direct result of the pandemic because our house is fully remodeled and it’s in a busy area. Everyone’s pricing in my area is going down.”
According to Snow, Reese is not the only seller experiencing this problem. Although the average sale price increased from $370,000 to $392,000 comparatively from April 2019 to April 2020, sales went down by nine percent compared to this time last year since the state began its shutdown.
But that may be because there aren’t as many options for those looking to buy right now. Sellers typically want maximum exposure, so it’s likely they’re holding out until summer and fall. That means there could be a surge from a pent-up demand.
“It feels much like coming out of winter, where it’s cold outside. They just want to wait until spring to list their home. We have heard time and time again that someone wants to list in a month and see where we are,” said Snow. “There’s just very little choice for buyers that are able to buy or are out looking because there is just a lot demand right now.”
Real estate agents have gotten creative while working by offering virtual open houses and tours, controlled social distancing, sanitation measures while they’re showing homes, and digital closings.
“In my career, I’ve never seen anything like this. This is definitely a new one. We have two choices when we’re faced with these market changes and we’ve seen many of them. You either adapt of you go away,” he said.
But once the economy reopens, experts said there are concerns that there may be some hesitation from potential buyers dealing with financial setbacks because of layoffs or furloughs.
“It’s real simple. Banks aren’t going to lend if we can’t verify employment. But as businesses reopen and things get back to the ‘new normal,’ this housing demand is still going to be there,” said Snow.
Snow said he doesn’t expect prices to plummet like how it did during the 2008 recession because of the demand in inventory. However, after monitoring the liquidity and trends in the market, he believes rates are going to remain low.
“I believe we’re going to able to capitalize for these people. I feel that’s the sense of urgency is that, ‘Oh my gosh, rates are low. But I can’t buy right now.’ So let the jobs come back. Let’s get back to work safely and follow the guidelines by the state and governor. Let’s revitalize this economy and we’ll be fine.”
Reese said it’s just a waiting game for her at this point.
“We’ll just have to follow the market. We don’t have any plans to take the home off the market. We’re just looking for the right buyer,” she said. “I’m not nervous. I just think the market’s slowing down. I don’t think it’s going to stop. People still need a place to live. Life must go on.”
Snow’s advice for anyone looking to buy or sell at this time is to work with an agent who is watching the market closely.
“Just be patient. At this time, our numbers of scheduled showings is back at pre-quarantine levels. Continue to work with your realtor and lender, so that you are ready. Sometimes we want to throw our hands up because of financing or finding a home is difficult. But continue to be persistent so when the opportunity comes up, you’re ready to go,” said Snow.