The momentum in the real estate housing market has continued growth both here in Utah and on the national level hitting record gains while buyer demands are producing bidding wars for sought after properties. Despite slow downs and fluctuations in other hard hit sectors of the local Utah economy including the service industry and the health care sectors, real estate in Utah has continued to boom as inventory has decreased and demand increased in both the residential and commercial markets here in the state of Utah. A great part of this increase is due surprisingly to the COVID-19 pandemic that since March of 2020 has created a frenzy of new potential home buyers in rural and suburban areas from interested homebuyers looking to relocated from urban areas such as San Francisco, New York City, and Los Angeles. In Utah, most of the homebuyers are out of state looking to relocate to Utah and similar states offering less restrictions and a safer peace of mind. These buyers have been coined “Refugee Buyers” and they have created a new realm of bidding wars increasing Utah’s housing market.
Home sales across Utah including homes sales along the Wasatch Front have had strong rebound from the dire forecasts of late 2019 and the slump that began the start of the year. Since June we have seen a sharp increase in home sale and by the beginning of Q3 2020, the momentum eventually eclipsed the success of last year. Although Summer may be over but the real estate market in Utah continues to remain on fire. We have hot markets all across Utah including Utah County, where they have seen a 5.2% 1 year increase of home sales and the average medium home value is $363,428. Down south in St. George we have a 4.4% increase of home sales in the last year.
Yet the real superstar of the real estate rush is the Park City area, led by the Promontory Park City community who captured 22% of Park City’s record home sales. . The strongest single-family price gains in Park City came from the thriving area of Tuhaye/Hideout located on the east side of the Jordanelle Reservoir. Here, the median sale price jumped 51% to almost $1.7 million.
As we look towards the future moving along into a new decade and towards 2021, thoughts and concerns are brewing regarding what might be in store for the future of Utah real estate and will this bubble burst, and if so, when. The pandemic may have certainly sped up pre-existing trends in real estate such as the increase in rural and suburban sales due to the increase in remote work as people hunker down and avoid the pandemic. It seems this trend will only continue as technology allows us to stay connected through Zoom video calls and a great deal of the our society moves online. The decrease in retail real estate due to growth in online retail sales, creates a future for industrial real estate where economic models and startup hubs diversifying locations and offerings.
However, it is not all bright and sunny in the real estate market. According to HUD’s July 2020 “Neighborhood Watch” report, 17% of 8 million insured mortgages are now delinquent. Yet we are lucky that here in Utah, our deliquency rate sits under 5% along with Montana, South Dakota, Idaho and Nebraska.