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LEHI – Homebuyers in the Beehive State are facing intense competition and bidding wars due to strong demand and a lack of available homes for sale, according to real estate experts.
"I've never seen it this crazy, as far as how hectic it is," said Jeremy Holmgren, the Utah manager for Zions Bank Mortgage. "There's so little inventory. Rates are still really low, so the buying power is there and it's just a crazy, crazy time to buy a home."
Holmgren calls it the perfect storm affecting the Utah housing market that includes a lot of cash offers and out-of-state buyers moving to the state.
"A lot of California buyers coming in and it just creates a very difficult situation for the standard homebuyer who's looking to buy their first home or upgrade to their second home," he said.
A report by Redfin found that: "Nine out of 10 Redfin offers in Salt Lake City in January faced competition, the highest bidding-war rate of the 24 metros included in this analysis."
The Utah Association of Realtors reported that at the end of February, Utah had 4,091 properties available for sale compared to 11,283 properties in February 2020, which equates to nearly 64% fewer homes on the market.
Nine out of 10 Redfin offers in Salt Lake City in January faced competition, the highest bidding-war rate of the 24 metros included in this analysis.
–Redfin report
Jed Nilson is the vice president of the Utah Association of Realtors and also a homebuilder. He said he's seen firsthand how the ultra-low housing inventory is affecting people.
"Just recently we released four townhomes for sale and received 40 offers," he said.
The association's latest report shows that the median sales price for homes in Utah has jumped 15% over the last year.
"It's becoming extremely challenging if you're a buyer that has a limited down payment," Nilson explained, "In many cases, people are having to pay their typical down payment plus an amount above appraised value."
From June 2020:
Utah home prices continue to rise even during pandemic
Sales of existing homes in Utah tumbled in May, but analysts and real estate agents said the market is experiencing strong activity and price increases as summer begins.A new study from the Inspection Support Network found that the Salt Lake City area had the 7th fewest homes for sale out of all large U.S. metros, and that the Ogden-Clearfield area had the 2nd fewest homes for sale among mid-size metros.
"Until the demand for buying in Utah goes down and the inventory goes up, I think we're going to be in this situation for a while," Holmgren said.
