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Demand is driving home prices in Utah through the roof

A home under construction is offered for sale in Palatine, Illinois. (Photo by Scott Olson/Getty Images)

SALT LAKE CITY — The supply of houses in Utah can’t keep pace with demand. And a realtor predicts that without more real estate to sell, home prices in Utah will continue to climb. 

New numbers show the median price of a single-family home in Salt Lake County rose to $530,000 in April, May and June. That’s nearly 29% higher than the same time a year ago, according to The Salt Lake Tribune. In June alone, that price was at $550,000, according to data released by the Salt Lake Board of Realtors.

A pro gives his take

Real estate agent Thomas Wright said it’s a matter of too little supply and too much demand. He shared his professional insights with KSL Newsradio hosts Dave & Dujanovic.

The pandemic slowed the supply chain of new houses everywhere. “That made materials really hard to get and obviously slowed down construction as people weren’t working as much,” Wright said.

More people are moving into Utah, and fewer people are selling their homes and moving out.

More homes need to be built and sold

“We’re not building fast enough, we don’t have enough inventory, so we absolutely have a supply and demand problem,” Wright said.

He added that before the pandemic, Utah was about 55,000 housing units short of meeting demand. Right now about 30,000 homes a year are built.

“Even if we build 30,000 [homes], according to a new report that’s out, for the next 10 years at the current demand levels, we would not catch up,” Wright said. “We would we would still have a supply problem.”

He said there are three types of buyers competing for homes right now: everyday homebuyers, institutional investors who are paying cash, buying homes and renting them, and the 1031 exchange buyers who move profit from real estate transactions into a new realty purchase. That way, they don’t have to pay a capital gains tax.

Wright predicted that with interest rates staying so low, prices for homes will likely just keep rising.

Listen to Dave and Dujanovic’s podcast segment with real estate agent Thomas Wright, below.

Dave & Dujanovic can be heard on weekdays from 9 a.m. to noon. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app, a.s well as Apple Podcasts and Google Play.  

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