The median home price for a Salt Lake County single family home rose 19.18% to $226,450 in the first quarter 2013. This strong rise in prices happened even though the number of homes sold was basically flat, managing only a 0.95% rise in the number of homes sold compared to the 1st quarter 2012. So why are prices going up so much if sales are flat, well it’s down to supply and demand. The reason that the number of sales are not increasing like we might expect is that there is simply not enough homes on the market. So while demand among buyers might be rising, the inventory of homes for sale is shrinking, leading to the classic supply and demand scenario. If demand goes up and supply stays the same or decreases, then prices will rise. This of course makes it a great time to sell, but sellers seem to be reluctant, or in some cases unable (if they are underwater with their mortgage) to list their home.
So what of the Salt Lake condo market? Well the condo market has been running behind that of single family homes. This is probably due to the difficulties buyers can face when trying to obtain a mortgage for units in some developments. Having said that, things seem to be picking up in the condo market, and the median price for a condo rose 14.16% in the first quarter, on the back of stronger sales which were up nearly 28%.
So what for the future? Well if inventory levels remain depressed, and buyer demand does not decline, home prices will continue to experience upward pressure. The truth is we could do with more home listings coming on the market; this will make it easier for buyers to find a home, particularly first time home buyers who are finding it increasingly difficult in the current market.
This article was written by Trela Bird Realtor, serving the needs of the Salt Lake Real Estate market.