Understanding what’s going on in the real estate market is more crucial now than ever before. Whether you’re a seller looking to list your property, an investor seeking the next opportunity, or a prospective buyer, having a grasp of market trends is a prudent move.
In this blog, we will dissect the three core metrics that guide real estate conversations – the number of homes sold, median sales price, and median days on market. These data and insights serve as barometers for the overall vigor and health of Salt Lake County’s housing market and they are the indications that we’ll scrutinize closely in this Q3 update of 2023.
Number of Homes Sold
In the third quarter of this year, 2,109 homes were sold. That is a decrease of 5.97% compared to the number of homes sold in Q2. The decline might seem like a significant shift but it’s likely a seasonal ebb in the market. Real estate, historically, experiences fluctuations in sales volume through its transition from summer to fall.
It’s also vital to look at the bigger picture beyond the quarter-to-quarter change. There was a 13.14% decline compared to the same quarter of last year. This tells us while there may be seasonal fluctuations, Salt Lake County’s market continues to experience an overall trend of fewer homes sold.
Several factors influence the number of homes sold. One factor is the limited supply which means there are fewer homes available for sale. This, in turn, results in fewer homes sold. Higher interest rates are another huge facet of the decline as they make it more difficult for buyers to afford homes.
Median Sales Price
The median sales price for Q3 2023 stands at $605,000. Comparing it to the same quarter of 2022, we see an increase of 0.83%. On top of that, when we look at the quarter-over-quarter change, we find the median sales price has risen by 1.68% compared to Q2.
The median estimated per-square-foot value for the cities within the county over the last month, based on ATTOM’s report, ranges from $298.35/sqft (Herriman) to $369.53/sqft (Salt Lake City). Salt Lake’s median sales price has overall soared during the past years, reflecting an increase of 69.12% from 2018 to 2022.
Many may have heard talk that prices would drop this year but the low supply of homes for sale has prevented that from happening. There are just more buyers looking to purchase than the number of homes available. This high demand has kept home prices from falling and is expected to continue bolstering home prices in 2024.
For buyers, the increase in median sales price means that it’s important to realize home prices will likely not come down and you will be paying more tomorrow for that same home than you could buy it for today.
On the contrary, this is a golden opportunity for sellers as it signifies that their property is more valuable than ever. Experts suggest that home prices are likely to continue growing through the end of the year, though not at an astronomical rate.
Median Days on Market
The median days on market for last quarter was 22. When we look back at the same quarter of last year, we see an increase of 5% in the median days on market. This trend might imply a slightly slower pace of sales or a shift in buyer preferences.
But, it’s noteworthy that there’s a 47% increase from the previous quarter. This uptick is likely a seasonal fluctuation. Numerous factors affect the pace of sales, including:
- Inventory: Since the inventory is limited, properties tend to sell faster as buyers compete for a smaller pool of options.
- Seasonal Variations: The increase in the median days on market from Q2 2023 is likely a seasonal trend.
- Economic Conditions: High mortgage rates and high inflation can stifle the housing market.
- Interest rates: Mortgage rates remain a tough challenge for the housing market this year, and this has kept both first-time and repeat buyers on the sidelines.
The significance of longer or shorter days on market depends on your perspective. A longer duration for sellers suggests that they might need to adjust their price or marketing strategy. On the other hand, buyers have less competition and more negotiating power.
The Impact of External Factors
The real estate market is not an isolated entity as it operates within the larger context of governmental and economic policies. Mortgage rates are one of the biggest external factors that can influence the housing market. A number of elements, including inflation, monetary policy, and the state of the general economy determines rates.
As of October 12, 2023, the average 30-year FRM was 7.57%. Rates are likely to remain at these levels well into 2024. Inflation still poses a challenge for buyers, sellers, and the housing market. The higher rate affects demand and affordability in Salt Lake.
Moreover, it may also discourage potential buyers from entering the real estate market which consequently leads to a slowdown in demand and impacts the prices of homes.
Expert Opinions and Predictions
While the housing market is expected to be competitive in Q4 2023, the market’s trajectory remains uncertain, influenced by factors such as inventory and mortgage rates. However, experts predict that the market will continue to be challenged by the lack of inventory and relatively steady demand, practically ensuring that Q4 will remain a sellers’ market. By focusing on the market’s positive aspects, sellers and buyers can still find success in the area’s real estate market.
Seasonally, based on history, the housing market often experiences a slowdown in the fourth quarter. The number of real estate transactions in the final three months of the year will be further reduced as a result of the low inventory of homes available for sale and because most of us often focus more on the holidays and festivities. Besides the current economic situation, the market is predicted to remain subdued because of the ongoing economic uncertainties and higher interest rates.
Salt Lake County’s housing market presents a dynamic and complex picture. The interplay of opportunities and challenges in addition to the market’s adaptability and resilience makes it worth watching. As we look ahead, the promise of possibilities and growth looms, offering a beacon of hope for investors, sellers, and buyers alike.
If you have any questions or inquiries, or if you’re considering making a real estate move, I’m here to assist you. Your dreams and goals are my priority and I’m here to help you successfully navigate Salt Lake’s vibrant real estate market. Feel free to reach out – I’m just an email or phone call away!