Priced Out: The effects of spiking Utah home prices on buyers and sellers
Editorial note: This is part two of a series on affordable housing, called “Priced Out.” You can see the other parts of our coverage here.
SALT LAKE CITY — Rising home prices aren’t the only thing making it hard for people to find good housing in northern Utah. Competition is becoming extremely fierce for homebuyers because the number of homes are the market is so low, which is fantastic for sellers, but causing a new crop of issues for buyers. It’s pricing area residents out of buying, and even making finding affordable rental properties a challenge.
“One bedroom and one bath and 540 square feet is $1,360,” said Salt Lake City resident Jennifer Hollander as she showed KSL apartment listings near downtown Salt Lake City.
Buying and renting tough amid rising Utah home prices
At one point, before COVID-19, Hollander was in the market to buy a condo and there were some that were in her price range. A master aesthetician, Hollander works in skin care and permanent make-up; she spent 15 hundred hours to get that certification. However, all that disappeared when the pandemic hit.
“Then, all of the sudden, it was like the world stopped,” she said.
Now, she lives in a one-bedroom apartment smaller than most hotel rooms. Not only can she not afford to buy a home, she can’t afford to rent most apartments downtown.
She showed another listing where the property owner wouldn’t advertise how much the rent would be per month.
“This one, 462 square feet and you have to ‘call for details.’”
Hollander pointed out several others that also neglected to show the monthly rent on the listing.
She’s currently paying less than $700 per month for her apartment, but only because she qualifies for low-income housing assistance. She’s not sure if things will ever get back to somewhat normal.
“There are no jobs. I mean, there are listings and you can see them on Indeed, but there are not a lot. When you do apply, you’re applying with everybody else that’s still looking in the beauty industry,” Hollander said.
It’s not just the price of the home that’s becoming an issue for so many potential homebuyers. Utah Association of Mortgage Professionals President Lauren Patterson says even when people can afford the house, other customers outbid them by thousands more. He says some of those buyers are willing to pass a dollar figure they’d be comfortable with to lock down a house.
“Others put a little bit more due diligence into it, but I think we’ll all continue to see some shuffling going on,” Patterson said.
Seller’s market could continue for years
If you’re selling a home, things are great. Patterson says this shuffling could continue for months, if not years, and it includes people trying to downsize from what they have now.
“Home prices are anticipated or forecast to continue to increase, so, at that point, you’re hard-pressed to say ‘don’t buy,’” he said.
However, it’s the first time home buyers that could have the biggest challenge getting house.
He said, “As you know, getting into the market the first time is the biggest challenge that we have. Once you’re in, you’ve got appreciation and net worth that starts working for you. So, making a move after that is a little bit easier.”
Patterson says it’s still possible for younger couples and millennials to afford a home, adding that people typically spend roughly 20 percent of their monthly income on housing. Homes can stay affordable even if rising housing costs outpace growth in salaries, just not indefinitely.
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