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Why $1 million-plus Utah cribs are selling like hotcakes

Local real estate pros say out-of-state buyers are fueling record interest in Utah homes in the $1 million-plus price range. Why? Even with rising costs in the state, prices still look good for transplants coming from California, New York and other places with even hotter markets.

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This home on Yale Avenue in Salt Lake City is on the market for $1,290,000. Sales of Utah homes priced $1 million-plus are on a record-breaking pace in 2019.

Windermere Real Estate

SALT LAKE CITY — Right now, a cool $25 million could set you up in grand style in a 50,000-square-foot estate on 165 acres in Springville.

That, of course, includes indoor/outdoor pools, a theater, tennis court, workshop, exercise space, five fireplaces, six bedrooms, 12 bathrooms, multiple dens and family rooms, as well as multiple kitchens. And parking accommodations for 16 vehicles.

The luxe villa was built in 2010 and is currently the highest priced Utah home listed by online real estate service Zillow, and one of over 230 current listings in the state priced at or above $1 million.

While the asking price of the Springville home puts this particular piece of real estate far beyond the reach of the average buyer, Utah home sales in the $1 million-plus category are moving at a record pace. On Tuesday, the Salt Lake Board of Realtors reported that 2019 sales in Salt Lake, Davis, Tooele, Utah and Weber counties, through August, were up 23% over last year.

Scott Robbins, president of the Salt Lake Board of Realtors, said the market is being driven, in part, by out-of-state buyers who see Utah housing prices, by comparison, as bargains.

“Wealthy transplants from California and New York are fueling million-dollar home sales,” Robbins said in a statement. “Nearly 3 of every 4 homes sold above $1 million were priced from $1 million to $1.5 million.”

Robbins said the pain points become more apparent for Utah homes being listed at prices north of $1.5 million.

“It remains somewhat of a challenge to sell a home above $1.5 million, even in today’s strong economy,” Robbins said.

The marked jump in sales volumes of high-priced Utah homes thus far in 2019 continues a trend that’s been in play over the last few years, according to the Realtors group. In 2018, there were 309 homes sold above the $1 million mark along the Wasatch Front, which was a 20% increase from the 258 $1 million-plus homes sold in 2017. And, that year saw a 91% increase over the 162 units sold in 2016.

Dejan Eskic, senior research associate with the University of Utah’s Kem C. Gardner Policy Institute, said the trend in jumbo-priced home sales is a reflection of Utah’s ongoing housing shortage and the attendant upticks in home costs across all pricing levels.

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This home on Autumn Cove Lane in Draper is on the market for $2,195,000. Sales of Utah homes priced $1 million-plus are on a record-breaking pace in 2019.

Casey Halliday, Windermere Real Estate

“Really, this just comes down to the housing shortage we’ve been talking about for some time now,” Eskic said. “There are simply more households being formed than there are housing units being built each year. ... Demand is oustripping supply.”

The Beehive State, Eskic said, has long had three pillars of attraction, to which a booming economy and increased wages, particularly in tech-related positions, are helping fuel the fire of demand.

“Utah has always had a competitive edge with three historic advantages,” Eskic said. “Lower cost of living, a great quality of life and a very business-friendly environment.”

Eskic said even hotter real estate values in big, coastal markets are helping create what he calls “equity refugees,” who, in some cases, are snapping up high-priced homes that still look like steals compared to where they come from.

“Basically, what’s happening in these markets is Californians or New Yorkers, for example, with ties to Utah that bought homes in the ’70s or ’80s that are now worth a million-plus take out second mortgages and invest in our market,” Eskic said. “That’s a migratory pattern.”

Eskic said other forces driving up housing prices include across-the-board increases in the costs associated with building new homes. He noted land prices in the state have risen some 45%, municipal fees have gone up, construction labor costs have risen 25%-30% and building materials costs continue to rise.

The Salt Lake Board of Realtors reported that while homes selling over the $1 million mark are rising, the overall market share of the category is relatively small. Approximately 87% of all homes sold on the Wasatch Front from January through August were priced under $500,000. And, homes between $500,000 and $999,999 made up 12% of the mix. Million-dollar home sales represented just 1% of the total market share.

According to Zillow data as of Aug. 31, the median home value in Utah was $344,000 with the median listing price coming in at $369,000.

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This home on Abinadi Drive in Millcreek’s Olympus Cove neighborhood is on the market for $6,900,000. Sales of Utah homes priced $1 million-plus are on a record-breaking pace in 2019.

Casey Halliday, Windermere Real Estate