Utah home buyers — along with home buyers across the nation — have felt the long-running squeeze of high home prices and low inventory. Though the Wasatch Front is facing a housing crunch with growing affordability issues similar to other large metros, a new report indicates that relief from rising home prices is on the horizon (whew!).
The nation’s overall housing inventory increased 12.2% in the second quarter, the biggest gain since early 2015, according to a report from Trulia. Thirty of the nation’s 100 largest metro areas saw their housing supplies increase on an annual basis last quarter. That’s up from just 13 earlier this year and represents the largest share of big cities with increasing inventories in more than 3 years.
While it may be too early to tell for sure, it’s looking to be the start of a shift in inventory. An acceleration in new home construction as well as the willingness of more existing homeowners to put their homes on the market are the biggest contributors to this shift. New, smaller units are being snatched up by millennial homebuyers and retiring baby boomers who are downsizing.
So, what does this shift look like for Utah home buyers? Salt Lake City was one of the largest metro areas with big inventory gains this past year (coming in just behind Nashville, Tennessee). Here are the top metros with housing supply increases, according to Trulia.
-Nashville, TN: 52%
-Salt Lake City, UT: 48.6%
-Dallas, TX: 32.4%
-Washington, D.C.: 21.9%
-Little Rock, AK: 13.4%
Adam Kirkham, president of the Salt Lake Board of Realtors, noted that local builders have had trouble keeping up with demand for housing units, which has created a major seller’s market that has resulted in rapidly rising home prices. With more inventory on the market, however, we will likely begin to see this turn around going into the final quarter this year and into 2019.
With millennials making up a large percent of future Utah home buyers, these gains couldn’t come at a better time. Millennials make up 15.5% of the total population in our capital city, according to realtor.com. “Millennials want to buy, but record-low inventory [has made] it extremely difficult,” said Danielle Hale, chief economist for realtor.com. Continued inventory gains will continue to draw in millennial home buyers in an already hot market that is rising in popularity with this younger demographic.
It’s true what they say…no pain, no gain — even in the real estate world! If you have any questions about the future of the Utah housing market, reach out to an expert for the latest market indicators and inventory updates.