UTAH (ABC4) – Utah’s housing market’s outrageous pricing has gotten a lot of buzz recently.
Tonya Basset, head of Homie’s buy side agent team, weighs in on where she thinks this “bubble” is headed, and what it could mean for Uthahn homeowners and prospective buyers.
Basset said upfront that calling the Utah real estate market a “bubble” evokes memories of the 2008 housing market crash that may not be true for today’s market.
“I don’t think that’s going to happen here in Utah,” says Basset. “Things are so much different now than in 2008.” She mentioned that a similar crash will most likely be prevented by tighter loaning standards and a dramatic decrease in inventory for consecutive years in Utah.
When asked to explain the dramatic decrease in housing inventory in Utah, Basset mentioned the uncertainty that owners and buyers have experienced in the last couple of years from COVID-19. “People don’t want to move,” said Basset, also mentioning how the increase in remote work has decreased the number of sellers in the market.
Of course, the number of people moving to Utah has continued to increase, meaning the demand for housing has continued to increase.
Commenting again on the possibility of a market crash, Basset is doubtful that it will happen fast enough to seriously hurt Utahn’s finances.
“It will probably happen more gradually,” she says, as interest rates slowly rise on new home loans. When asked about a predicted timeline, Basset said that it “will probably take more than a couple of months,” and up to a couple of years for the market to slow down and equalize.
While acknowledging that it is indeed a great time to be a seller in Utah, Basset warned potential sellers to “make sure you know what you are getting into.” Sellers should be ready to entertain a lot of offers on their house in a short amount of time with less time than usual to consider said offers. Basset also commented that sellers should of course “know they want to move” and be prepared to do so quickly.
Basset warned that potential Utah buyers should be ready to engage in a “brutal market.” Her best advice to those looking to buy is to talk to a good loan officer to prequalify before making an offer to expedite the process as much as possible.
To both buyers and sellers, Basset mentioned that perhaps the most important advice she can give is to “make sure you have a good agent with your best interest at heart.”
When asked about advice for first-time homebuyers around Utah’s median income level, Basset commented that they should probably alter their expectations for the time being. This can mean preparing to buy a condo or townhome instead of a single-family home, or getting ready to wait the market rush out.
“People definitely shouldn’t buy out of the fear of missing out,” said Basset.
At the end of her conversation with ABC4, Basset concluded by saying that despite the extremely high prices, real estate in Utah continues to be a remarkably good long-term investment, as long as investors can be patient enough to see long-term returns.
“You have to be willing to be in it for the long game,” Basset concluded.
Whether or not Basset’s predictions about a gradual house market slowdown will be correct will only be evident as time goes on and the market continues to evolve.