Is the Utah Real Estate Market Going to Crash? Find Out Here
Is the Utah real estate market going to crash? In 2019, if you had asked me this question, I would have said yes without hesitation. But we overcame Covid and demand became even stronger since then.
Fast forward to 2022 and there are clear signs that the economy is slowing down, but none of these signs seem to be pointing to Utah's housing market crashing in 2022. So where does that leave us? Is the real estate market going to crash? Well, let’s dive into it and find out. But first, let’s understand why the market is so hot...
Why is the real estate market so hot?
There are a number of reasons why the real estate market in Northern Utah is so hot right now. One reason is that there is more demand than there is supply. In fact, supply started off lower than it was last year. This means that there are more buyers than there are homes for sale, which drives up prices.
We have all heard the old saying "They aren't making anymore land." and this holds true. Utah's population continues to grow and land is becoming more and more scarce. So it's inevitable that demand will continue to outpace the supply.
Interest rates are still historically low
Right now, interest rates are still at historically low levels. They’ve been slowly creeping up, but they’re still low compared to where they were even a few years ago. This is good news for buyers, because it means that their monthly mortgage payments will still be relatively low compared to the historically average interest rates.
It’s also good news for sellers, because it means that more buyers will be able to afford their home. The only bad news is that it might not last forever and its inevitable that rates eventually get back to the low to mid teens eventually.
Credit remains available
Currently, there is a lot of talk about whether or not the real estate market is going to crash. Some people are saying that there is no way that the market can sustain itself and a crash is inevitable. However, we believe that as long as credit remains available, the real estate market will be just fine and as we already mentioned, they aren't making anymore land.
Demand is also on the rise, because incomes are finally going up and people have been encouraged by rising home prices and low interest rates to take out a mortgage, further increasing demand. It's clear that supply is an issue and there aren't many signs of that changing, but demand seems very healthy.
Millennial homebuyers finally buying houses
In recent years, we’ve seen a huge influx of millennial homebuyers. And while some experts predicted that this would lead to a housing market crash, that hasn’t been the case. In fact, according to most experts, the real estate market is only going to get stronger in the next few years. So if you’re thinking of buying a house, now is the time to do it while interest rates remain historically low.
There really isn't a golden rule for the best time to buy a home. It is really up to the individual home buyer and what their needs are. Today might be better time to buy, where as next year or even three years from now might be a better time for another person.
Buy when you feel it's the right time and are in a position to make a substantial purchase such as a home. Everyone is different and thus having different needs and timelines.