Builders are canceling buyers’ contracts. They’re making buyers pay $100,000 over what they went under contract for. Existing homes, people are paying tens of thousands of dollars over list price. What is going on with this crazy Utah market? Well, today I’m going to give you an update and my thoughts on the market. So stay tuned.
Hi, this is Melissa Ballman and I am a real estate agent here in the Greater Salt Lake City area. So what that means, if you’re looking at making a real estate move, I’d love to connect with you. Shoot me a text, send me an email, give me a call. Do whatever you have to do, but let’s get in touch about your real estate goals. But first, today, I am going to talk a little bit more about the market and what we’re seeing. Because after all, we are going into historically the peak season of real estate.
So if you haven’t heard on the news or seen it, we now have two builders in the local area; one in Salt Lake County, one in Utah County who is either canceling buyers contracts prior to closing, or they’re increasing their rates significantly to get more money out of buyers because the prices are just so high. If you haven’t seen them, I’m going to drop the link to those articles in the description below so you can take a look at it. But I know somebody who personally, a builder raised their contract price on a townhouse over $100,000 making her townhouse going to be over $600,000 in Sandy, Utah.
And I’ll be honest. I just don’t think these buyers are ever going to come out of that. They may have the money upfront, but after all, most people when it comes time to sell their home they actually want to make money, not lose it. And $600,000 for a townhouse in Sandy is just crazy to me. I just can’t even believe it. I never thought I would see this day. So not only is it a crazy market for buyers in the new construction field and the builders, they’re stuck in a really hard spot right now because the lumber prices are astronomical.
A friend of mine who’s an agent in Boise recently said that when you purchased $50,000 worth of lumber this time last year, you could basically build 15 homes with that amount of lumber. This year? Two. It is insane. So you hear a lot about people saying, “Oh, it’s a bubble. It’s going to burst,” things like that. It’s not anticipated for at least through 2022 for things to calm down because it’s a supply and demand issue, very different from the last real estate market crash that we saw and what most people remember. And that was coming from lenders and how loans were being done.
I joke with people, but I’m kind of not joking. My now 19-year-old could have walked in to a lender and said, “Oh yeah, I make $150,000” and state his income and get a home loan. Well, that stuff’s not happening anymore. And so we’re not anticipated to see that burst like so many people remember.
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So we can go on and on about the market stats, but I want to keep this video short and precise for you guys. I’m going to throw up a chart here, and this is for Salt Lake County. And you can see by the blue line, the past five years, the average sales price is just up, up, up, up, up, up, up. But like I said, we’re going into our busy season and you’ll see by the green line that historically the second quarter of every year, our sales of homes goes up significantly from most other quarters. And I think a lot of that has to do with kids are out of school. And so people are moving around for jobs or transfers, personal reasons, whatever is happening. People are just more likely to move in the summertime.
And so we’re hoping that it will kind of calm things down a little bit for buyers because there’s more inventory coming on the market. Now, I’m not saying it’s going to switch to a buyer’s market. With the demand that we have, I just don’t think that’s going to happen any time soon. But hopefully, we’re not getting 50 offers on a house and starting at $50,000 over asking price.
Now, looking at Utah County for the last five years, you’re going to see very similar to Salt Lake County. Our second quarter, our number of sales goes up. But consistently over the last five years, our average sales price has continued to go up. So what does that mean? We are obviously in the second quarter of 2021 so I can’t pull those stats, but take a look at the first quarter of 2021 where, in Salt Lake County the average sales price was $498,000. And in Utah County, that average sales price was $456,000.
Looking at what the MLS is reporting for April of 2021. I want to go over how big of a jump we are already seeing from those last numbers. So for Salt Lake County, the average sold price in April of 2021 was $521,916. Now that is actually up from what the average list price was in Salt Lake County of just barely over $504,000 is what homes were listed for compared to what they sold for.
Now, let’s look at Utah County. The average sales price in the first quarter of 2021 was $456,000. Looking at it, the average list price in Utah County for April 2021, the first month of the quarter was $494,000. Sold price average 507,756. So there’s a substantial jump already. And looking at the months ahead, if you’ve been thinking about selling it’s going to be second quarter is historically, like I said, a great month for sellers, not such a great month for buyers. So if you’ve been thinking about buying or selling, make sure you get on the real estate market because as you can see, it’s just climbing, climbing, climbing for the last five years.
Gone are the days where you think you can take the weekend to think on putting in an offer on your house. So looking at April of 2021 compared to April of 2020, our days on market in Salt Lake County is half as many. In Utah County, it’s less than 50%. So in April of 2021, Salt Lake County average days on market was 28. April of 2021, just 14 days average days on market. When we look at Utah County, the average days on market in 2020 was 36. It is now in April of 2021, 15 days on market. So buyers are acting very, very quickly when they see a house that they want.
So I hope you enjoyed my video today. If you want to get into more specifics about the market, feel free to reach out to me. Like I said, I just wanted to do a quick high level overview of what is currently happening in the market, but I’d love to connect with you. You can drop a comment below or reach out to me personally. But as always, make it a great day.