Third quarter real estate stats are out for Salt Lake County, and frankly, they are a bit odd. The median home price sold in Q3 was $600,000, which is down almost 6% over the second quarter of this year.
But, if we look at stats from 2021, we see a growth pattern in the statewide median sales price—it's up 9%. Interest rates on 30-year mortgages are now up to 7% or more, and fewer buyers are coming into the market right now, so predictions for this final quarter aren't looking too great.
The Federal Reserve is definitely going to keep raising interest rates until inflation cools, and we're seeing massive price reductions of homes on the market. Nationally, new listings in September fell 22% over the previous month, and 17% of listings that were under contract/sale pending failed to close.
Sales are down 20% over 2021. In Salt Lake County, Q3 sales were down 18.8% compared to Q2 and down 30% compared to the same time in 2021.
"Run, don't walk, to the nearest exit" is starting to be the war cry for some sellers, as "days on market" in Q3 moved to 22 days, vs. 6 days on the market until recently. If you love house porn, you'll notice on many listings that sellers are willing to "help" pay buyers' closing costs or are offering incentives like new carpeting.
This is the time of year when people begin to seriously nest—cold weather, holidays, etc. And given those vibes, it's when the market generally slows down. Although we've seen only smoking statistics for the last few years here, we will experience a slowdown as predictors are saying that the housing market needs this kind of correction to balance out housing supply and demand.
If you can qualify for a loan, there are still options to get better rates. The "two-one" buydown is a great product, wherein if rates are at 7%, your loan starts at 5% for a year, then 6% for another year, and then it fixes at 7% for the rest of the loan. You can refinance if rates go down, and the initial discount will allow for you hopefully to get raises at work to afford the 7% rate later. Plus, as the market softens, buyers will get great deals.
There's no better time in Utah to shop for homes than during the colder months. Why? It's nice to know how that potential house fares in winter! When you walk into an empty house, does it feel drafty although the heat is on? How's the insulation in the attic, around the doors and windows, and under the floors? Does the furnace growl like your stomach in the morning?
Since it's cool to cold here about half of the year, a well-built home with good insulation is a must. And if sellers are willing to chip in to the deal to make you more comfortable by giving you a credit toward closing costs or added insulation ... well, it doesn't cost a dime to make an offer!