As the first quarter of 2023 comes to a close, the Utah real estate market is showing signs of correction. The number of homes sold in the first quarter of the year was down 21% compared to the same period in 2022. However, pending sales jumped 38.3% from the fourth quarter of 2022, indicating that the second quarter of 2023 may see further improvement. Rick Burton, an award-winning realtor in Salt Lake and Davis Counties, expects home values to rise again in the second half of this year.
The average sale price for homes in the first quarter of 2023 fell 5.3% compared to the same period in 2022, while median listing prices were 3.7% higher than at the end of last year. Wasatch County was the only market to see listing prices fall, while prices rose in Morgan, Summit, and Wasatch counties compared to the fourth quarter of 2022. Year over year, prices rose in Wasatch County but fell in other markets. A correction in the market is underway, which is necessary after the low-mortgage-rate-induced market of the pandemic period. Home values may see a relatively modest decline in the coming months, but Burton expects them to rise again in the second half of the year.
Mortgage rates in the first quarter of 2023 were less volatile than last year, with buyers jumping in when rates dipped. The Federal Reserve is expected to raise short-term rates one more time following their May meeting, which will allow mortgage rates to start trending lower at a more consistent pace than in previous months. Burton predicts that mortgage rates will continue to move lower with occasional spikes, and that they will hold below 6% in the second half of this year.
The average time it took to sell a home in the counties covered by this report rose 42 days compared to the same period in 2022. Homes sold fastest in Salt Lake County and slowest in Summit County. During the first quarter of 2023, it took an average of 67 days to sell a home, which was an increase of 9 days compared to the final quarter of 2022. Lower inventory levels may lead to market time pulling back again as we get into the spring months, or at least levelling out.
In conclusion, the Utah real estate market is experiencing a correction, which is necessary after the pandemic-induced market of the previous years. Although home sales are down and prices have fallen slightly, pending sales indicate that the second quarter may see an improvement. Mortgage rates are expected to continue to move lower, and market time may pull back as inventory levels lower. Overall, the market is stabilizing, and Rick Burton, an award-winning realtor in Salt Lake and Davis Counties, expects home values to rise again in the second half of the year.
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