Utah Housing Forecast Breakfast Recap -

The Utah Housing Forecast Breakfast is always a treat. It’s a great opportunity to gain knowledge and understanding about what the economists and experts say about where they expect our market to go.

We started off by hearing from Jim Wood at the University of Utah. He expects that there will be a recession that impacts the housing market nationwide, however, he is said it’s impact on Utah is “unlikely” The reason for this is because of our low unemployment numbers. Our employment rate of LY has increased 2% which shows our workforce to be strong.

He expects the interest rates to remain high and be between 6.5-7.5%

His key word was “stabilization” and showed how home prices have doubled in the past 5 years. Because sellers are being patient and watching the market, the inventory remains low which is keeping the prices stable.

We next heard from Lawrence Yun with the National Association of Realtors.

He said “Own Property!” Specifically in the affordable Midwest. He expects the price of homes and land to continue to increase but we may see a hit in the apartment community. With the increase in rent many more will tun to home ownership.

The number of total home sales has been sliding back and is now consistent with the number of homes sold in May of 2020.

Lawrence also showed this diagram which is so telling. In 2000 the median home price was $140,000. In 2008 it was $280,000 and in 2022 it was $580,000. He showed this to us as an example of what a great long term investment real estate is. Specifically, discussing 2008 when we saw the housing bubble and crash. Even if you purchased your home right before the crash it was a smart investment.

So will there be a home price crash coming? Lawrence Yun says No. Home pricing crashes usually go hand in hand with unemployment and poor loans. We have neither concern today.

The number of delinquent mortgages is low, the equity in homes is high and the expectations that foreclosures or short sales will become common place is not likely.

We are starting off a little slow in January, which is typical of this seasonal time of year. 2021-2022 did not fit the typical market, but the main focus on this next slide is the number of new listings going to market being down 17% from LY. That’s concerning for our already low inventory numbers.

In contrast to Jim Wood, Lawrence Yun expects mortgage rates to slow and average about 5.5%.

This was very interesting. Lawrence looked at the price of Uhaul rental rates which shows where the highest needs are. San Francisco, Phoenix and Chicago are moving to Utah. Utah, we are retreating to Boise.