A striking 80% of Utahns are concerned about the raging housing market and its skyrocketing prices.
That’s according to a new Deseret News/Hinckley Institute of Politics poll, which found 47% of Utahns say they’re “very concerned” about Utah’s current housing market, while 33% said they are “somewhat concerned.”
Only 11% said they’re “not very concerned,” while 6% said they’re “not at all concerned.” About 4% said they’re not sure.
The poll comes after Utah’s most populous county, Salt Lake County, saw a record-shattering sales year in 2020, and as Wasatch Front home prices are skyrocketing by double-digit percentages. In a year when the housing market is red hot just about everywhere in the U.S., accelerated by the pandemic and its effects, the Salt Lake metro area is a contender for having the No. 1 housing market in the West, competing with other burgeoning areas like Boise, Idaho.
In Salt Lake County, the median single-family home price climbed to $468,000 in the first quarter of 2021, up $68,000 or 17% from a year earlier when the median price was $400,000, according to the Salt Lake Board of Realtors. In Utah County, that price is up to $450,000, up an even bigger 20% from the first quarter of 2020. In Davis County, that price is $430,000, up 21%. In Tooele County, it’s up to $360,000, up 18%. And in Weber County, it’s up to $340,000, up 23%.
James Wood, the Ivory-Boyer senior fellow at the University of Utah’s Kem C. Gardner Policy Institute, said he was surprised to see such a big number — 80% — of Utahns say they were either very or somewhat concerned about the housing market, considering that many are likely already homeowners locked in a mortgage or have already paid off their home.
But then again, Wood said it would make sense if they have family members — especially children or grandchildren — who are facing today’s daunting housing market.
“I think it shows that people are concerned about the next generation,” Wood said. “It really is about the children when you’ve got a number that high.”
Of those who said they were “somewhat” or “very” concerned about Utah’s market, not limited to one answer, a whopping 70% said they were concerned about affordability. About 61% said they were worried about inflated housing prices, 44% said they were concerned there is a real estate bubble that will pop, 40% were concerned about rising property taxes, and 36% said they were worried about the lack of homes for sale. About 17% said they were worried because of other reasons.
The poll of 1,000 registered voters in Utah was conducted April 30 to May 6 by independent pollster Scott Rasmussen. It has a margin of error of plus or minus 3.1 percentage points.
Faced with skyrocketing price increases rivaling if not exceeding those seen in 2005, 2006, and 2007 before the market crash that led to the Great Recession, Wood said it’s completely understandable Utahns are worried about home prices and what the future holds.
He’s worried, too.
“It’s an unhealthy market,” he said, “and it can’t be sustained.”
But is it a “bubble that’s going to pop?” Wood said. “I don’t think that’s going to happen.”
Unlike what happened in 2007 and 2008, when the subprime loan crisis caused a “serious contraction” and a global financial crisis, Wood said he “just can’t imagine that the financial structure is that fragile now. I hope not.”
But Wood said he is worried because the current trajectory isn’t sustainable, and something has to change to level out the market eventually. He thinks that might come in 2022 or 2023, when interest rates may rise moderately enough to slow demand.
“I don’t think there’s going to be any relief for those trying to get in the housing market in 2021,” he said. “But I think we’ll see rates go up and prices moderate in 2022 and beyond.”
In the meantime, Utah continues to have a worsening affordability problem. That’s where Wood sees the silver lining in the poll numbers.
“It’s encouraging,” he said, “because they’re a constituency.”
If constituents care about an issue, so should policymakers on state and local levels.
“Legislators respond to their constituency, and when you have 80% somewhat concerned or very concerned, that’s a pretty good incentive to really get to understand the issues, the problem and what sort of policies they can advance.”
The Utah Legislature this year pumped $50 million into affordable housing and homelessness, but it’s going to take more policy work to tackle housing affordability, he said, which requires having a range of options for homebuyers to choose from including higher density options like apartments or town houses.
“Housing affordability is a policy problem,” he said. “Now what is the policy for housing affordability? It starts with a ‘Z.’”