It’s getting harder for first-time home buyers in Utah to afford a home, especially in Salt Lake neighborhoods like Sugar House. With so much competition amongst buyers, it is difficult to even get an offer placed before a home is sold.
Monique Higginson is a real estate broker and owner of Market Source Real Estate in Sugar House. For 15 years she has represented homes for buyers and sellers, and she has seen the market go through drastic changes during that time.
“In 2002,” Monique says, “when I was getting started, the market was down and foreclosures were up, but things heated up in 2004 with rapid appreciation and low interest rates. Then, 2007 brought the great real estate depression and everything crashed.” She explains that things were bad for about four years until 2012, when the market started to recover, but “things have been getting better ever since.”
The market turned around because of Utah’s economy and great job opportunities. Monique sees a huge migration of people moving to Utah, an influx that has fueled the real estate market and increased housing demand with low interest rates. Other factors include less people selling homes, and new construction not keeping up with demand. According to Monique, “That is hugely problematic.”
Good news for sellers is not necessarily good news for buyers. “Buyers are struggling to get a contract and may have to put in 10 to 12 offers to secure a contract,” Monique says.
In January of this year, Zillow listed Salt Lake City, Ogden and Provo among the top ten hottest housing markets for 2017, and Forbes listed Salt Lake City as one of the Top 20 Best Cities to Invest in Housing in 2017. When that happened, Monique started receiving out-of-state investment offers on her listings.
“In California,” she explains, “there are people who can’t afford the prices, but want to invest in property, so they invest here. They buy a property and rent it out. Sugar House is a hot bed for investors. It is close to colleges and there are a lot of young professionals who don’t want to buy yet, but can afford $2000 to $2500 a month to rent a little house.”
Investors are driving up prices statewide, up about 10 percent in some areas, and even 15 to 20 percent in other places. Heavy cash investors, those who can pay cash for a $400,000 listing, are driving prices up. Investors are offering $20,000 to $40,000 over the asking prices to beat out other buyers. Foreign investors purchase homes when they are here working, or for their children going to school, with an eye toward permanent residency. Owning property helps their cause.
Is there hope for first-time buyers? Monique says It helps to have cash or pay your own closing costs and down payment. Be aggressive. Making the first offer on a property will give you a better shot at owning your own home.