By Brandon Cornett | April 1, 2019 | © HBI, all rights reserved
The housing markets of Salt Lake City, Provo, Ogden and other Northern Utah cities outpaced the nation in 2018, in terms of home-price gains. They’re expected to do more of the same through 2019 and into 2020.
Last week, we reported that Provo, Utah is one of the cities where millennials are buying homes in large numbers. This and other factors has led to big home-price gains in the Provo housing market.
But Provo isn’t the only city in Northern Utah with a hot housing market. Most of the cities in that region are outpacing the nation right now, in terms of year-over-year home price growth.
Real estate markets in Salt Lake City, Ogden and Orem are also experiencing above-average price gains, as of early spring 2019.
Utah Home Prices Outpace the Nation
Home prices in Utah rose faster than the national average in 2018, and during the first part of 2019. According to Zillow, the median home value for the state of Utah rose by 14% over the past year (as of March 2019). The nationwide median rose by 7.2% during that same 12-month period.
The company’s research team predicted that Utah’s median home value would rise by another 8.5% over the next 12 months, stretching into spring 2020.
Even bigger gains were recorded within the housing markets of Ogden, Orem, Provo and Salt Lake City. In those real estate markets, home prices rose rapidly over the past year or so (see below).
Looking forward, the latest housing forecasts suggest that these cities will continue to outpace the nation in 2020 — at least in terms of annual home-price gains.
Strong Housing Forecasts for Salt Lake City, Ogden, Provo
According to the latest data, home prices in the major cities of Norther Utah have been rising at a much faster pace than the nation as a whole. Additionally, there have been strong home-price forecasts for the housing markets in Salt Lake City, Provo, Ogden and Orem.
We can see this stark difference by looking at median home values over the past year. Consider the difference:
- The median home price for the U.S. rose by around 7% over the past 12 months.
- In contrast, the median home value in all four of the Utah Cities above rose by at least 15% over the past year, according to Zillow.
Ogden, Utah led the charge with a whopping 20% gain in median house prices over the past year. While real estate appreciation seems to be slowing in that market, Ogden could have another year of double-digit price growth in 2019.
Here is Zillow’s forecast for the Ogden housing market: “Ogden home values have gone up 20.0% over the past year and Zillow predicts they will rise 12.5% within the next year.” They also labeled this real estate market as being “hot” in spring 2019, based on the average time on market, frequency of price cuts, and other factors.
The chart below, provided by Zillow on April 1, 2019, shows the stunning rise of home prices in Ogden, Utah. It also shows the company’s forecast for this particular housing market, into the spring of 2020 (green shaded area).
The Northern Utah cities of Salt Lake City, Orem, Provo and Logan also recorded double-digit increases in their median home values over the past year.
Supply Falling Short of Demand in Some Areas
In most major cities across Utah, the inventory of homes for sale is still not enough to satisfy the demand from buyers. This puts upward pressure on home prices and leads to competitive conditions within these real estate markets.
Ogden, Utah is one of the more “extreme” examples of this supply-and-demand imbalance. As of February 2019, the Ogden housing market had about a 2.5-month supply of homes for sale. That’s well below the 5- to 6-month level that economists consider to be a balanced market.
Salt Lake City also had about a 2.5-month supply of homes for sale in February.
In these and other cities across Northern Utah, the real estate market tends to favor sellers over buyers. For now, at least. If more inventory becomes available over the coming months, it could tilt the scales.
Are Buyers Getting Priced Out of These Markets?
From a homeowner’s perspective, rising home values are a big win. An appreciating real estate market enables homeowners to build equity. But some home buyers will eventually be “priced out” of these real estate markets due to the above-average price gains of recent years.
Prospective first-time buyers, in particular, often struggle to keep up with rising home values. And with most housing market forecasts suggesting a continued rise in Utah house prices, the problem could worsen in 2020.
Already, we’ve seen a decline in sales across this region. That could be partly due to the big jump in prices (and a corresponding drop in demand).
A January 2019 article from The Salt Lake Tribune stated:
“Surging prices and limited supply pushed home sales on the Wasatch Front [which includes Ogden, Provo and Salt Lake City] to their lowest level in three years, with Utah’s urban counties seeing significant market slowdowns as 2018 ended.”
But there’s some good news for home buyers. Mortgage rates have plummeted over the past few months.
According to the weekly survey conducted by Freddie Mac, the average rate for a 30-year fixed mortgage loan dropped from 4.94% in mid-November of last year, to 4.06% during the week ending March 28, 2019.
Low mortgage rates could help offset the rising cost of homes in places like Salt Lake City, Ogden and Provo — at least for those home buyers who jump on them while they last.
Disclaimer: This article includes home price trends and housing market forecasts for various Utah cities. That information was provided by third parties not associated with the publisher. Real estate forecasts and predictions are the equivalent of an educated guess and should be treated as such.