Home buyers and sellers are adjusting to the new reality of inflation and rising interest rates. Despite these factors, the local real estate market is continuing to grow.
According to Jamie Johnson, CEO of the Park City Board of Realtors, quarterly report numbers show a slight decrease of sales and an increase in median home values.
“And this, this quarterly report was actually amazing to look at we we took comparisons from all the way back to 2019, pre COVID, and looked at 2019 2020 2021," she said. "And the differences in the way the market adjusted with the pandemic. And one of the things that we found is that, even though yes, we are seeing a decrease from last year, we are still way above pre COVID numbers.”
Johnson says in June 2022 in Park City proper, median prices were over $4 million. For Summit and Wasatch counties that number was closer to $2 million.
She says inventory has increased significantly in areas like the Jordanelle Reservoir and Kamas Valley. However according to a recent study by “Up for Growth,” a Washington based policy and research group focused on the housing shortage, Utah’s housing underproduction has increased by 41% since 2012. In short, this means the demand outweighs the supply.
Rene Wood is the President of the Park City Board of Realtors. She said while prices are going up and sellers are continuing to make money, there is a balancing effect occurring.
“Well, there for a while, properties would go on, you'd have multiple offers, they would just move quickly. Now sellers need to understand is taking a little bit longer. And they're kind of panicking, because it's not happening as quickly as it was their neighbors sold and, you know, had 10 offers in two days. And now that's not happening.”
Wood says the increase in interest rates plays a factor in market trends.
“It's, definitely having an impact. I feel like people, you know, you hear the Fed is going to raise the rate, which isn't a direct immediate result of the mortgage rates, but it, it does, you know, there's a cause and effect," she said. "And so people I think are waiting a little bit longer just to see what's going on. So it can kind of have to effects either they say, Oh, I'm going to hurry before they raise it again. So I need to hurry and go ahead and buy if they're, if they need to, or they're going to wait and see.”
Johnson says even with increased interest rates and a potential recession, housing costs keep going up with no end in sight.
“Our averages and medians are higher than they've ever been. And, and we don't see them going down," she said. "I mean, again, we do have a lot of cash buyers, we have a lot of people come in here for investment properties for their second home and investing in that way. So sometimes investors see that as a more stable option than the market right now with it going up and down and with a potential recession.”
On Monday, the federal reserve signaled another three-quarter-point interest rate hike is likely on Wednesday.
