Utah Housing 2022 Stats & Analysis (Episode 57) S4 E12

The Utah Real Estate Show

You can watch this episode on Youtube.com: https://youtu.be/1QlUCJzMHwM

What's gonna happen to Utah housing in 2022? Nobody knows for sure, but these statistics and economic data will help paint the picture.

0:00 – Introduction

1:30 – Should I wait to buy? It’s gonna crash!

2:26 – Unemployment. Utah’s awesome, and there’s so much attraction here. We have a highly educated, under-employed work force, and businesses are coming to take advantage. Unemployment rate is 2.1%, the lowest since at least 1998. The U.S. is 4.2% as of November 2021. Housing follows employment – it’s a leading indicator. The most-important information to look for when it comes to housing is jobs.

4:52 – 2-Yr Job Growth Chart. 3.6% Utah job growth. U.S. is -2.0% over a 2-year span. There are already several companies here, and there are many more that are in the process of moving infrastructure here. Companies follow companies.

6:20 – Aric predicts 2022 will match 2021 in terms of price increase (appreciation rate), largely because of inventory shortage. New construction takes 10-ish months to build, and builders are selling out now. Interest rates are climbing, but there’s still historically great rates. We’re also in an “appreciation state,” meaning investors look for deals that will gain value rather than cashflow.

7:59 – Supply & Demand. We’re not building enough homes (housing starts are down). There aren’t enough permits being supplied to home builders. November 2021 is down 9%, after being up 20% in 2021. We’re outbuilding what we’ve done in the past, but we’re still short of demand. Construction is taking longer because there are shortages of materials. There’s a high demand for homes because there is strong job growth, but we’re underbuilding normal demand (this doesn’t account for an increased demand, which magnifies the issue).

11:12 – Conventional Loan Limits. There’s been a huge increase in the limit: almost $100,000. For most of Utah, the loan limit went from $548,250 (in 2021) to $647,200. This is because everything costs more. The conventional conforming loan limit is what Freddie and Fannie Mac say you can borrow for a house for without special provisions. As of 1/11/2022, there are only 479 existing homes (514 if you count homes under construction) that would qualify for a conforming mortgage out of a total of 860 homes for sale in Utah and Salt Lake counties.

13:04 – High Appreciation due to supply and demand pressure. There’s a lot of pressure on supply and pressure on demand. That leads to an inference of a high-appreciation year. People are likely to sell because they see additional equity in their home. However, it will take more equity to get into a new home. Move up buyers will remain mostly unaffected, but first-time home buyers need to buy sooner than later or they will be left behind.

14:12 – Not a Bubble. This is the memory people surface because they link high prices with the collapse of 2008. You’re not likely to be able to out-save appreciation. At 3% appreciation on a $400,000 home, that’s $1,000 appreciation per month. If you’re not saving more than $1,000 per month, you’re being left behind. Now increase that to the 20% to 30% rates we’ve seen across Utah in 2021: most people are not capable of saving $6,000 or $8,000 per month to keep up.

17:05 – Sold:List Ratio. List price to final sale price expressed as a percentage. In October 2021 we came back down to just 100%, where it remained to January 2022. 102% in January so far. You need to be working with someone who can get and interpret statistical information.

20:30 – Lots of Stats. We hit a lot of data points to paint a clear picture. You cannot base an analysis on cherry-picked information and numbers. You must consider multiple data and how they describe a situation in order to have an accurate reading.

21:18 – What did we learn today?

* No housing starts were harmed in the filming on this real estate discussion.

Please contact us to tell us you love us, you want to hire us! Call or text:

Realtors with Hive Collective at Presidio Real Estate:

Tyler Cazier: 801-210-0230

Aric Wiszt: 801-228-7687

Lender with Elite Team at Security Home Mortgage:

NMLS: 178787

Jason Christiansen: 801-669-7271

NMLS: 240472

A Production with Security Home Mortgage's Jason Christiansen, and Hive Collective at Presidio's Tyler Cazier and "Mr. Suit" Aric Wiszt.