2024 SLC Real Estate Market Forecast
/The 2024 Salt Lake Housing Forecast Report has been released by James Wood, Ivory-Boyer Senior Fellow, Kem C. Gardner Policy Institute, David Eccles School of Business at the University of Utah. In his annual report, Wood explains what happened in the 2023 market and what to expect in the coming 2024 market for residential real estate in the Salt Lake City area. It’s always very insightful and helps to plan for any buying or selling of homes you plan to do in the year to come.
2023 Salt Lake Residential Market Summary
Because of the steep incline in interest rates in 2022 and 2023, the housing market slowed considerably. In 2023 there were 15% fewer home sales than there were in 2022. The price of homes also fell by 2.8%. While falling prices are not typically seen as a positive from an economic perspective, it was anticipated that the prices would drop by closer to 5%, so the 2.8% drop we had is a good thing.
I say it was a good thing knowing that in the real world, it felt sluggish and difficult for sellers. Houses took longer to sell on average and for less than the asking price. This is quite a departure from the market we had in 2021 and the early part of 2022. As the pendulum swings away from a strong seller’s market towards one that is more balanced, it can be difficult for sellers to adjust to that. Houses need to be priced more conservatively and sellers may need to be willing to offer concessions to buyers.
That doesn’t mean it’s instantly a perfect market for buyers though. The lower number of sales from last year is largely because there are fewer houses on the market. Buyers don’t instantly have a glut of homes to choose from. The interest rates were still in the 7% range making mortgages still much more expensive than they were at the beginning of 2022. Prices are still high in the Salt Lake Valley. A 2.8% drop in prices means that the median price went from $530,000 to $515,000. Those prices compared to median incomes, make the Salt Lake market still very unaffordable to many.
What to Expect in 2024
All that means that 2024 will not return us to a pre-high-interest-rates market. We will most likely see another year of slower price growth. It’s expected prices will rise about 3% this year. We should also see lowering interest rates. They believe interest rates will be in the low 6% range by the end of the year and just below 6% in 2025.
While this isn’t the best news for sellers, it’s healthy overall for the market. Historically, home prices rise on an average of about 5% per year. This current market is putting us much more in line with that. It is much more sustainable in the long run than the 20% + increases we were seeing a couple of years ago.
I’m going to link to James Wood’s full report below. It’s got a lot of great info and graphs of the data. If you’re a little nerdy like me, you’ll find it interesting for sure.
In the meantime, if you need to get a value on your house or see what you might be able to afford to buy, reach out and we’ll figure it out!