I have been watching the local real estate market a lot lately, as I am planning on moving from Kaysville further south, to be closer to my job in South Jordan. As I am trying to sell my house and find another one to buy, here are some of my observations about the Utah market (particularly the Wasatch Front:)
- Houses are still way overpriced. Home prices are dropping a lot in other parts of the country, but not in Salt Lake County. The Deseret News reported today that house prices have stayed virtually the same since the same period in 2007, but sales have gone down 42.21%.
- The median income for a family in Salt Lake County is $54,470. The median house price is about $240,000. This works out to be about 4.4 times a family’s annual income, which is higher than historical norms. Traditionally, home prices have a ratio of no more than 3 times a family’s annual income.
- That means that the median home price in Salt Lake County ought to be more like $164,000. That is a long way to fall before house prices reach an equilibrium based on market fundamentals.
- Many REALTORS® are lying about market conditions to trick people into paying too much for a house. I think I may have got the only sane one. One clueless REALTOR® posted the following on the Deseret News website:
The economy is fine in Utah, just not in CA, AZ, and NV. You’ll see that this summer will be a big year in Utah real estate and if you don’t buy a house this summer, you’ll miss the perfect buying opportunity. Get in now while the gettin’ is good!
I think the market will correct itself with time, but that doesn’t help me out much in my personal situation, since I want to move this year. It will be interesting to continue to watch the market and see how it irons out. With prices falling so sharply, a lot of people are going to get hurt if they were left holding the bag.