Housing Market: This Utah Market has just been the most price cut in the United States

As The U.S. housing market is showing great signs of a chill – from Temporary dismissal of mortgage company For several months in a row Sales decline — It’s hitting Utah’s home in a big way.

The table is starting to change. Motivated sellers are beginning to ease their expectations that buyers will pay almost anything to lock themselves in their homes.

Almost half of all homeowners in Provo, Utah County’s largest city, about 45 miles south of Salt Lake City, lowered their asking prices in May as mortgage rates far exceeded 5%. I did. Higher borrowing rates, coupled with historically higher home prices, More than 70% of Utah households have been reduced Can afford to buy a median home in the state.

according to it Data posted by Redfin This week, Utah’s Provo regional market noted that of the 108 metropolitan areas included in the analysis, it had the highest share of the decline in listing prices in May.

It is important to note that a monthly listing price drop is not the same as a price plunge or an actual price drop. Utah’s rising home price trajectory Since 2006, the US housing market has skyrocketed and bottomed out in 2009. Experts say economic changes in the ocean are likely to be needed — Clearing layoffs, foreclosures, and dire employment markets — significantly disrupting Utah’s home price trajectory and plunging state-wide prices.

Also, price list price cuts are not uncommon. In fact, sellers, especially ambitious sellers, typically lower the list price when the initial list price is too high to compete with other lists.

However, if you see a significant price cut in the local market, it usually means that things are starting to cool down. luck put it. “That’s exactly what we’re seeing right now.”

The house on the bench east of Pro Bo is painted on Thursday, June 23, 2022. In May, 47.8% of Pro Bono sellers reduced their list prices. This is an increase from 12.2% in May 2021.

Jeffrey D. All Red, Deseret News

What’s happening in the Utah housing market

about According to Redfin, 47% of homes sold in Provo fell in price in May. This is the largest share of reductions seen by regional markets across the country in May. Compare that to May 2021, a year ago, when only 12% of Provo’s list was reduced.

Also, Salt Lake City and Ogden, the other two regional markets in Utah, are one of the top five metropolitan areas with the largest increase in list share with price cuts compared to a year ago. did.

  • In Salt Lake City, 45.8% of homes for sale were reduced in May. Ogden wasn’t too late, with 42.6% of homes cut. According to Redfin, the same number was only 20% in Salt Lake City and Ogden in May 2021.

How are these Utah markets compared to the other top 10 regional markets that saw the largest share of price cuts in May, according to Redfin?

  1. Provo, Utah — Prices fell in May at 47.8% of homes for sale.
  2. Tacoma, WA — 47.7%.
  3. Denver, Colorado — 46.9%.
  4. Salt Lake City — 45.8%.
  5. Sacramento, CA — 44.3%.
  6. Boise, Idaho — 44.3%.
  7. Ogden, Utah — 42.6%.
  8. Portland, Oregon — 42%.
  9. Indianapolis, Indiana — 41.9%.
  10. Philadelphia, PA — 41.2%.

Why are sellers cutting prices?

Increasing price cuts are a big indicator that the housing market is improving, and buyers are finding limits.

“Rising price cuts symbolize a slowdown in the housing market. Many buyers are retreating as home prices soar. Mortgage surge, High inflation When Stock market downturn“Redfin reported.

In other words, the seller is re-adjusting the price to better match the buyer’s desires. As more sellers “respond to the slowdown in the market,” Redfin’s chief economist, Darryl Fairweather, said the share of reduced homes will slow.

“There are two types of sellers in today’s market: those who already know that the market is cold and those who are learning about the cold market in the process of selling,” Fairweather said.

“The former wants to sell faster before the market slows further and is ready to set a slightly lower price soon than comparable homes in the neighborhood. The latter will allow homes to buy buyers within a few weeks. If you don’t attract, you may need to lower the price. “

Why are listing prices down in Utah, Idaho?

The pandemic is Western housing marketEspecially in medium-sized states like Utah, not only are living and housing costs much more affordable than in places like California, but there are also plenty of outdoor recreation opportunities.

“The housing market in the most discounted areas is exactly where it soared during the pandemic.” luck Reported and pointing to Provo. “In the market, just a short drive from some ski resorts, a large influx of remote workers during the pandemic.”

The rapid growth State of Utah was already facing a Housing shortage Before the COVID-19 pandemic, I put it and other western states like Idaho on a national map. An attractive destination for Americans freed by working from home.. Demand surged further, with double-digit price increases each year, with price increases of more than 50% or more than 60% in some regions.

In fact, according to Redfin, Utah’s three regional housing markets and one of Idaho (Provo, Salt Lake City, Ogden, and Boise) were among the top 10 places with the highest house prices during the pandemic. rice field.

From May 2020 to May 2022, Provo home prices rose 65.7% to a median of $ 550,000, Redfin reports. Salt Lake City was up 56.2% to $ 556,000, Ogden was up 57.2% to $ 500,000, and Boise was up 66.7% to $ 550,000.

“The rise in prices was primarily due to the move-in of homebuyers outside the town during the pandemic and competition with locals for limited housing supplies,” Redfin reported. Boise Utah “has almost tripled throughout 2020.”

But May price cuts, and more people moving out of the Salt Lake area, according to Redfin data, could have depleted pandemic-fueled hype in Utah and Idaho. It may indicate that.

“The trend has begun to reverse in both places. Salt Lake City For the first time in the first quarter, Redfin recorded a net outflow (more users want to move out than move in). “

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