Utah Housing Market: What can you Expect in 2022?
It’s no surprise that over the last 2 years the Utah housing market has seen some serious changes. Utah has one of the largest immigration rates of all states in the United States. The rise of Silicon Slopes has brought an array of tech jobs to Utah therefore more jobs and more residents. We also have the second lowest unemployment rate at 2.1% behind Nebraska at 1.8% as of November 2021. From the second quarter of 2020 to the second quarter of 2021, the average home price increased 28.3%! Sales growth and price increases are expected in 2022. Sales growth is anticipated at 15.2% and price is expected to increase 8.5% in 2022. Here are some factors driving the Utah housing market upwards.
Silicon Slopes
Silicon Slopes is leading to a population increase unseen for four decades pre-COVID. As tech companies like Meta, Northrop Gruman, Adobe amongst others are seeking to set up shop in Utah for its low taxation, affordable cost of living and of course the natural beauty provided by the Rocky Mountains. Salt Lake City and Provo are feeling the brunt of the rise in business culture as these areas are not able to support the growth influx. Densely populated areas like these two are seeing more real estate developers develop land with apartment complexes in Utah making homes even more valuable.
Unemployment Rate
Utah’s significantly low unemployment rate has helped keep Utahn’s on their feet and competitive in the market. Less unemployment is more competition in the housing market.
Native Population Growth
Utah is the command and control center of the Latter Day Saints (aka Mormons). LDS families can get quite large. To maintain a population there needs to be as many children as parents. Big families grow the population and will eventually want their own homes, spouses and potentially a large family. At some point this cycle will cause strain on real estate prices as demand is higher than supply as the number of children exceeds the number of parents.
Resettlement & COVID-19
In 2021, Utah had the second largest growth in 2021. Over the last two years Utah has seen a big jump in the number of new residents from across the country, most notably California. Real estate in California is much more expensive which means over asking cash offers when they move here. There’s little evidence that mass migration has caused prices to inflate, but it sure makes it harder for Utah natives to be competitive bidders.
Supply Chain Shortages
It’s no secret that supply chain shortages have affected everything from homes, consumer products, auto manufacturers to food. As lumber costs stay high the incentive to build new homes is low as selling points are too high. This puts a lot of pressure on the secondary Utah housing market for those looking to set their roots. COVID-19 has exposed many shortcomings in the globalized supply chain. It’s unknown if these issues will be resolved in 2022 as so much data from around the world has to be compiled and analyzed.
Going Forward
With all of these factors in play, a housing bubble is unlikely. Several times since 1994 Utah home prices have seen steep increases and plateaus in-between. As long as supply chains are constrained and buyer demand is high, home prices in the Utah housing market will likely keep going up through 2022 and possibly following years. Even though prices are high, buying a home can still be a good investment as real estate prices will keep going up. Carefully consider your options, find the right home for you and buy if you’re ready!
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References
https://www.noradarealestate.com/blog/salt-lake-city-real-estate/
https://gardner.utah.edu/wp-content/uploads/StateOfState-Oct2021.pdf?x71849
