It has become common to hear people say, "the market is so crazy right now." Rarely is that ever quantified into any helpful information. Luckily, I have the 2021 year-end report to shed some light on the market in Park City and Salt Lake over the last year.
It is no secret that the market in Utah is one of the hottest in the country right now. Lack of inventory has led to a surge in pricing that doesn't show any signs of slowing down. Here are some of my takeaways from the year.
The continued proliferation of the ultra-high-end market.
Pre-Covid real estate in Utah always had its high-end markets, but rarely did we see many sales over $10 million in a year. Then in 2020, we saw several significant sales, including a few about $20 million. That trend has continued into 2021, with more than 20 properties selling over $10 million in the Park City area alone. Signaling that deeper pockets are flocking to Park City in much greater numbers and are willing to pay a premium for a unique property.
Prices continue to rise.
In the Wasatch Back, the greater Park City area, average prices were up nearly 40% over the prior year. This trend seems to be continuing into 2022, with the constrained inventory continuing.
Unique properties are scarce and highly desired.
This point is not analytical or data-driven but something that I have noticed growing over the last year. Buyers are more willing to pay a premium for something with a "cool" factor. The cool factor is a great design aesthetic, unique lot, or great views. While these factors aren't new, they make buyers more discriminant about what they will pay; no longer are people just grabbing whatever lists; there seems to be more patience to wait for a more exciting home.
Inventory continues to be constrained.
The most significant complaint I get from other agents is that they have nothing to sell to their clients, and if something does list, they have multiple clients that want to compete for the same house. A key metric for inventory measurement is Absorption Rate. The absorption rate says if no new homes came on the market, how long would it take for all of the current listings to sell out. Absorption is usually the number people look at when determining if it is a buyer's or a seller's market. Utah averaged a 1.8-month absorption rate, which is incredibly low.
2021 was indeed a fast-paced time for the real estate market. The positive is that even in this market, every buyer I helped was able to get a property that they loved; it just takes a little more patience and a slight amount of compromise. Those same buyers will also be able to take advantage of the increase in sales prices and trade up.
The main takeaway is that many people want to move to Utah, and there's no indication that people will stop immigrating here any time soon.
