When it comes to our Salt Lake City market, there are three key data points to know in terms of where we were and where we are. The reason I’m sharing this information now is that March and April were disruptive, and comparing May 2020 to May 2019 is a good benchmark to evaluate everything.
First, the number of active listings is down by 13.33%, but the number of properties under contract is only down by 1.32%. In other words, there’s less inventory but just as many homes going under contract.
Second, interest rates are hovering around 3.5%. A couple of weeks ago, they were closer to 3.8%. If you were previously looking for, say, a $350,000 home at a 4% interest rate, you’re now free to shop for a $375,000 home because you can afford $25,000 more.
“The market is strong, buyers have a great opportunity to take advantage of, and sellers are seeing some amazing offers.”
This is one of the best opportunities we’ve seen for buyers in a long time because there simply aren’t that many buyers in the market to compete against. A lot of folks are delaying their purchasing plans because they’re nervous about their job or the market itself. With less inventory and the same level of demand, we’re seeing a very strong pricing market. Sellers can sell to a great buyer, while buyers have more time to evaluate their purchase.
This brings me to the last key statistic, which relates to the number of backup offers. In general, the average rate of fallout (i.e., a deal falls through and the home goes back on the market) for all transactions was around 5%, but now it’s around 20%. Truthfully, this isn’t a bad thing. It’s stressful if you’re a seller, but we’re finding replacement buyers right away if a deal does fall through.
The point is that buyers don’t want to put a lot of money into a brand-new property, so sellers need to prepare their home so that it’s market-ready when they list it. If certain repairs aren’t done, buyers are more likely than they were before to move on from the property.
As interest rates stay steady, that gives buyers a better chance at securing financing. I’m not too worried about appraisals falling through either, because demand is so high and prices haven’t changed much. We’ll get a clearer picture next month of what impact this demand has had, but for now, we’re taking everything day by day.
The bottom line is this: The market is strong, buyers have a great opportunity to take advantage of, and sellers are seeing some amazing offers.
Remember, if you have questions about our Salt Lake City market or are thinking of buying or selling soon, don’t hesitate to reach out to me. I’m here to help.