SALT LAKE CITY (ABC4) – The Utah Association of Realtors released its June Home Sales report Wednesday.
According to the report, the average cost of homes sold increased more than 30% last month to a new record of $450,000.
The report explains the reason for the skyrocketing home prices is not having enough homes for sale. The number of active listings remains significantly below what is needed to keep up with buyer demand and protect housing affordability.
Matt Ulrich is a partner at Ulrich Realtors. He says Utahns will continue to see prices go up as long as the demand is there and buyers are willing to pay the money.
Currently, those looking to buy a home are having to make multiple offers, some well over the asking price, to try and secure a home. According to the report, sellers are receiving an average of 103% of the original list price.
While that is great news for those putting their homes on the market, many potential buyers are frustrated.
“When you’re not winning bids or offers, it’s draining, it’s emotional, it’s a rollercoaster. Even as an agent you’re spending more time and effort to help buyers purchase a home,” Ulrich tells ABC4.
“I’ve never seen it where people are literally having to pay this much money over the purchase price to get a home,” branch manager at Synergy One Lending Richard Knell says.
However, Knell explains there are ways mortgage leaders can help buyers during this process.
“We offer a ten-day close, which allows people to come in and get approved upfront. That way when they go out and make an offer, they can literally close in ten days or less… and that makes it easier for them to compete against cash buyers,” Knell says.
According to the report, at the end of June, there were around 5,300 homes for sale across Utah. That is a record low for this time of year, making it difficult to keep up with buyer demand and protect housing affordability.
“They’re not qualifying…they are having to sell assets, they’re trying to sell their car, downsize their vehicles, trying their best to pay off credit cards or other debt,” Knell explains.
Wednesday’s report says a Utah family making the median household income only had 85% of the income needed to purchase a home.
“I have buyers and people ask me all the time ‘should we wait… is the market going to change?’ the answer is we believe not. Based on statistics and state economists, we’re going to see prices continue to rise because the demand is there. Our economy is good…it’s a strong economy and the demand is there. There’s just not enough homes available for the number of buyers that are out here,” Ulrich tells ABC4.
Their advice to those looking to buy a home is to be patient and adjust your expectations, like expanding the area you’re searching for a home in.