BUSINESS + ECONOMY

Realtor: Bidding wars show Utah in midst of affordable housing crisis

Mar 16, 2021, 4:13 PM

salt lake county rental market housing crisis first-time homebuyers...

FILE - AP Photo / Rick Bowmer, File

SALT LAKE CITY — Bidding wars across northern Utah, including one in which a single home brought in 50 offers, demonstrates the breadth of a growing affordable housing crisis. 

Real estate agent Thomas Wright joined Dave and Dujanovic to discuss the wild real estate market in Utah and the crises of affordable housing and inventory in the state.

The median home price in Salt Lake County was $378,411 in 2020, which is a 10-plus % increase from 2019, according to Norada Real Estate Investments.

“Nerve racking”

“Let’s start by talking about that home you had 50 offers on. Was this a mansion or was this a two-bed, two-bath?” Debbie asked.

Wright said the house listed for $450,000 but he didn’t say where.

“People right now think, ‘Oh, being a listing agent is so easy because it sells so quick.’ It is so difficult and complex and technical to be able to take that many offers and help a seller understand them and create a strategy for picking the right one,” Wright said. “I mean it’s nerve racking. What if you pick the one that doesn’t work? It’s just a really complicated, technical real-estate market right now.”

Wright said about a third of the homebuyers are from out of state, a third are already in the market and a third are investors with cash. Those cash buyers make purchasing a home difficult for first-time buyers, he stressed.

“You’re seeing that investors around the country, not just in Utah, are really bullish on Utah. They’re getting into the game. They want to buy these properties either to rent them or flip them.

“It’s impossible when you’re a buyer moving up, or you’re a first-time homebuyer, to compete with that because you have to go through the lending process — that can take 30 days. There can be an appraisal required. For a cash buyer who just shows up and says, ‘I want to buy as an investment. I’ll waive everything. I’ll close in three days for cash. I don’t care how much I have to pay.’ That is really difficult to compete with,” Wright said.

Utah’s affordable housing and inventory crisis

He said one of the reasons he was a candidate for governor in 2020 is because he’s passionate about resolving Utah’s affordable housing crisis.

“It is a crisis. We do not have enough inventory. We’ve got to figure out ways to get more inventory on the market quicker. Can you imagine being a first-time homebuyer? I know these buyers. I sit with them in my office with them. It’s devastating, it’s affecting our kids, it’s affecting their development — it’s a real problem,” Wright said.

“Is it going to get worse for buyers once spring hits?” Debbie asked.

“I think the inventory is probably near the bottom. Normally, across the state of Utah this time of year, we’d have 6,000 to 7,000 listings. Right now we’re below 3,000 So we’ve got less than half of the inventory than we usually have, and that is just, you know, an inventory crisis,” Wright said.

He added he expects to see more housing inventory come online as more people become vaccinated and as summer nears.

Read this:

Affordable housing in Utah hard to come by for first-time buyers

 

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Realtor: Bidding wars show Utah in midst of affordable housing crisis