When the Coronavirus epidemic first made headlines, many homeowners selling their houses worried that the market would take a turn for the worse. It has been a few months, and rather than taking a dive as analysts predicted, the housing market remains just as steady as ever. In fact, the latest Economic Pulse survey from the National Association of Realtors (NAR) found that the market is holding steady. According to the data, 74% of real estate agents surveyed found that sellers have not dropped listing prices.

 Now that states are beginning to open back up and reintegrate back to normalcy, it seems like homeowners can breathe a sigh of relief. But what factors played a role in helping home prices at the pre-COVID-19 outbreak rate?

 Lawrence Yun, Chief Economist at NAR, explained:

 “The housing market faced an inventory shortage before the pandemic. Given that there are even fewer new listings during the pandemic, home sellers are taking a calm approach and appear unwilling to lower prices to attract buyers during the temporary disruptions to the economy.”

As Yun described, this inventory shortage and positive outlook are the main culprits behind the steady market. Even during quarantine recommendations, Utah remains one of the locations in high demand among home buyers.

Much of the state is now marked as “Yellow” or Low Risk, meaning that healthy residents and business owners can start reactivating. While there are still many limitations that individuals should adhere to, you can expect that the housing market will remain steady as it did throughout the year.

Homeowners looking to list their house should take advantage of the season. Not only are buyers looking for properties, but the current limited inventory makes available homes in high demand.

Getting your home listed early on will work to your advantage. Even after the initial outbreak of COVID-19, the nation experienced a severe supply shortage that increased home prices that remained on the market. In March, the number of homes for sale declined by 15.7% compared to March 2019. However, the national median listing price grew by 3.8%. These numbers show that sellers are entering a limited market with higher returns. 

A recent Deseret News article notes that while the events of 2020 slowed Utah’s earlier housing boom, the average price of homes is still expected to rise but at a slower rate, according to James Wood, Ivory-Boyer senior fellow at the University of Utah’s Kem C. Gardner Policy Institute. 

Right now, people are also low interest rate buyers who will stretch their budget and pay a premium. Since most businesses adapted for Covid-19 precautions, people can work from anywhere thanks to remote practices. You can expect many of these interested buyers to set their sights on Utah. Selling now could yield greater success thanks to Utah’s housing shortage and the market’s high demand. 

Wood also explains that as the economy recovers in the later quarters of the year, buyers and sellers can expect increased returns. Fortunately, Utah is already faring better than the rest of the nation, according to the June 2020 Economic Summary released by the University of Utah’s Kem C. Gardner Policy Institute. It would be best if you took advantage while you still can.

If you’re ready to move forward with your listing, now is the time to do it. You can use these practices to help you win big during the current low-inventory market. Contact Woodley Real Estate today to learn more about our service offerings, including how we can guide you through the selling process.

Was that a shift in the market or just another aftershock?

We know that the Coronavirus (COVID-19) has made for a lot of uncertainties. Among the list of questions that we are hearing is, “Is now a good time to buy a home?”

Buying a Home in Utah During COVID-19

One thing is for sure. The economy today is nothing like what it was during the housing crash of 2008. As we’ve been keeping a close eye on market conditions during COVID-19. We have seen more homes coming online with fewer homes being sold. More inventory can help contribute to a less cut-throat buying experience, and while inventory is still low compared to past years, low interest rates, fewer buyers and stable home prices makes right now a great time to buy.

While inventory is down from last year, we do see that since March, the number of active listings is rising compared to March of this year, and while there has been some shifting in the market, we see that now things are beginning to level out.

The number of sold listings has dropped off in April. This shows that there is less competition between buyers.

Likewise, the amount of under contract listings today is lower than what it was last month. We also see that the amount of Under Contract listings in April is going down relative to the amount of active listings this month.

There has been a small drop in the average home price in Utah in April, but all-in-all it has remained pretty stable.

April Showers Bring May Flowers

Looking at these numbers we can see that there has been a big change in the market, but it is still comparable to last years market. Home prices haven’t dropped off, and the amount of active listings is increasing. Couple that with less competition between buyers and low interest rates make today a great time to get into a new home.

Contact us to help you with your home buying decisions or with any questions that you may have.

*All information found on UtahRealEstate.com

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Helping You and Your Family Find Home

“Having someone who can walk you through the whole process A-Z gives you a lot of peace of mind when you close on a home.” At Woodley Real Estate, we want to be able to help you find home like York has done. Because we know just how important that is.

We know how challenging moving can be. Especially when moving from out of state. As experts on Utah, we not only want to be able to find you a home that you can see yourself and your family in, but we want to make sure the location, neighborhood, schools, and community will fit your way of life.

We sat down with York, to talk about his experience moving to Utah, and how we were able to help his family have a pleasant experience.

Full testimonial below.

“My name is York. My family moved from Laguna Beach, California about two and a half years ago, to Orem, Utah into this beautiful home.

So, when we decided to move from Laguna Beach, for my family it had to be in the right home it had to be in the right location, and we found it.

Finding the right home in the right location, for my family anyway, it was important to have the right realtor so I asked a couple of brothers who they recommended and both of them said ‘use the Woodleys’.

The Woodley’s represented both the buyer and the seller on this transaction, and I think we both felt really good about how the negotiations went, that we were both fairly represented, and I think it actually worked out for the best.

Having someone who can walk you through the whole process A-Z gives you a lot of peace of mind when you close on a home.

We felt like there was a lot of value from having one person or team who could handle really all of these needs. The Woodleys made this transaction a white glove, turnkey operation for me.

We’ve used the Woodleys in this transaction, we’ve used them in subsequent transactions, I would recommend the Woodleys to anybody else.”

Everyone is being effected by the Coronavirus (COVID-19) in one way or another. And while it has hit some people harder than others, there are a lot of questions that have risen as a result of this pandemic and because of the volatility of the stock market. Looking at the economy now and comparing this time to the housing crash during the Great Recession in 2008, it is understandable why some would be uneasy about buying a home at this time. But there is good news. There are a number of reasons that the real estate market is nothing like what it was in 2006-2008. Here’s why.

1. Mortgage Standards Are Much Different Today

During the housing crash in 2006-2008, almost anyone could qualify for a mortgage. The mortgage crisis was a result of too much borrowing and flawed financial modeling. Because of how easy it was to qualify for a mortgage, many bought more home than they could afford, and eventually were unable to make monthly payments on their home and faced difficult choices. Today, getting a mortgage is much harder than it was before and during the housing crash, to make for a more secure market.

2. Home Prices Are More Stable

The graph shows annual house appreciation over the past six year compared to the six years leading up to the height of the housing bubble. While appreciation is up now compared to the average 3.6%, it’s nothing like what it was before the crash.

3. A Surplus Vs. Shortage of Homes

If you have perused the MLS or other home buying websites, you might have noticed the lack of homes on the market recently, making for more competition and more often than not, bidding wars on homes. In a normal real estate market, you need approximately six month’s supply of inventory. Anything more than that is an overabundance and less than that is a shortage. As you can see, too many homes in 2007 caused prices to tumble, while today there is a shortage which accelerates home’s values.

4. Home Affordability

During the crash, homes became too expensive to buy. The housing affordability formula includes: 

1. The price of the home
2. Wages earned by purchaser
3. Mortgage rate available

In 2006 prices were high, wages were low, and mortgage rates were over 6%. While prices today are still high, wages have increased, and mortgage rates are around 3.5% making for a more balanced formula and less of homebuyers monthly income going towards their home every month.

5. People Are Equity Rich

Going into the housing bubble, many people withdrew their equity on their home once it built up. Compared to now, when prices have risen nicely over the past few years and over 50% of homes in the country have more than 50% equity, but people have not been tapping into that like they did previously. Comparing the two graphs, you can see that homeowners have cashed out $500 billion less than before. 

From these statistics, we are able to see that the housing market is in much better shape than it was leading up to the housing crash. Mortgage rates are lower today, home prices are more stable, less homes on the market makes for increased home values, when comparing prices of homes to wages, home affordability is in a much better place, and people are equity rich. If you are looking to get into your next or first home or want to sell your home, now is still a great time. Let us know how we can assist you in this process.