SALT LAKE CITY — Utah is experiencing a record home shortage coupled with increasing demand. The combination has created headaches for anyone looking to buy in the current market.
"We've never seen a market like this in the history of Utah," said Dave Robison, former president of the Utah Association of REALTORS.
Robison said the shortage is due in part to the effects of The Great Recession in 2008. Prior to the market crash, home builders were constructing ten percent more homes than the market demanded. It's a trend that started in the mid 1990s Robison said.
After 2008, builders began scaling back how many new homes were going up every year.
"So, we're caught up in the builders under-building for the last ten years," Robison added.
This trend has led to an all-time low in home inventory across the state, down 64 percent from February 2020, according to the latest data from the Utah Association of Realtors.
"To give you an example of that, across the Wasatch Front a normal market usually would have 14,000 to 20,000 homes on the market," Robison said. "Right now, we have just 1,100."
Booming real estate markets are popping up all over the country, but with Utah's steady economy and low unemployment, the state has become one of the hottest markets in the U.S.
"The median price for a home has gone up 15 percent," Robison added. "That's a big chunk. You know, normal would be like three to four percent."
The shortage has also created a negative feedback loop, where people who want to sell can't find a new home to get into. They then opt to wait to sell, which contributes to the shortage.
"So, they're really relying on just purchasing builders," Robison said.
The good news is the real estate market tends to be seasonal with February and March typically seeing the lowest inventory throughout the year. The bad news is Utah has such a shortage of homes that even with new inventory, supply will not catch up with demand.
"Right now, short term wise, we're really looking at a record low of inventory for at least another year for sure," Robison added.
Robison said the best thing you can do to remain competitive as a buyer in the current market is to, "have all your ducks in a row." Meaning pre-securing financing if you need it, guaranteeing a fast transaction, and most importantly having a seasoned realtor in your corner.