In a matter of six years, the annual income needed in order to afford the median-priced home in Salt Lake County has nearly doubled.
Let that sink in.
In 2015, the median-priced home in Salt Lake County cost about $248,400. The annual income required to buy a home with that price tag was about $58,100, according to the Salt Lake Board of Realtors.
Now fast forward to 2021. Homebuyers needed to earn over $100,000 a year — $101,400 — in order to afford Salt Lake County’s median-priced home of $460,000, the board said in a report released Wednesday.
“The 2021 Salt Lake and Utah housing markets will be long remembered for their record-breaking price increases,” according to the report.
2021: The year of the ‘shocking’ home price in Utah
In 2021, Utah and Salt Lake County saw “shocking” home price increases, the Deseret News has reported. Even though 2020 remains the No. 1 best year in Utah’s history for home sales, with 19,202 homes sold in Salt Lake County, 2021 saw record-breaking price increases that are projected to continue this year.
In 2021, Salt Lake County’s median price of homes sold climbed 22% compared to the median price of $378,250 in 2020. For single-family homes sold in 2021, the median price soared past even the half million mark to $533,000, up a staggering 25% compared to single-family homes price of $425,000 in 2020, according to the Salt Lake Board of Realtors.
“Statewide, housing prices increased by 27%, shattering the 43-year-old record of 20.1% set in 1978,” the board stated.
Those record price hikes were not confined to Wasatch Front counties, the group added. Nearly every county in the state saw record increases.
Twenty-four of Utah’s 29 counties had double-digit gains. In 2021, Utah’s 700,000 homeowners realized an increase in the home equity (wealth) of at least $82 billion.
Utah and the Salt Lake City metro area remain high on the nation’s list of hot housing markets.
The Salt Lake City metro area ranked No. 6 in highest house-price increases among the nation’s top 100 metro areas through the third quarter of 2021, with 28.1% year-over-year growth in prices, according to the Federal Housing Finance Agency. Housing prices in the Salt Lake City area are now higher than 87% of all major U.S. metropolitan areas.
Boise, Idaho, Utah’s closest housing competitor in the West, ranked No. 1 on the same list with 37.3% year over year growth in prices.
Salt Lake City recently topped another national list for its housing market forecasted into 2022. The site Realtor.com ranked it as the No. 1 housing market positioned for growth next year, forecasting a 15.2% year-over-year sales growth and an 8.5% year-over-year increase in prices in the metro area.
Housing market predictions: Is there a bubble?
No. Experts still don’t predict a slowdown or foresee a bubble about to pop.
“There’s no sign yet of a slowdown. For the past nine months, prices have consistently increased at over 20%, when compared to the same month a year earlier,” the Salt Lake Board of Realtors stated. “In December, prices were up 24%, just slightly below the largest gain of 27% in June.”
Despite soaring prices, the board says “there is no sign of a housing bubble.”
“In the aftermath of the Great Recession, Utah housing prices fell by 15.6%,” the group stated. “This is the only instance in the past 75 years of housing history when price declines lasted more than a few consecutive quarters. There were two single-year declines during the 1950s, a single-year decline in the 1960s, and a few consecutive quarters in 1983 and 1987–1988.”
Experts predict home prices will continue to climb in 2022.
“Count on a 10-12% increase,” the Salt Lake Board of Realtors said.