Salt Lake City has topped another national list for its boiling housing market, this time outpacing even its closest competitor — Boise, Idaho.
And if you’ve been holding out hope that the West’s wild housing market might simmer down in 2022, don’t hold your breath.
The site Realtor.com ranked Salt Lake City as the No. 1 housing market positioned for growth in 2022, forecasting the metro to see a 15.2% year-over-year sales growth and an 8.5% year-over-year increase in prices.
Salt Lake City outpaces Boise’s projections, set at 12.9% in year-over-year sales growth and 7.9% in year-over-year price growth.
That’s even though Utah and Idaho have already faced record-shattering years as the West’s housing market continues to rage. In Utah, experts have warned of a “severely imbalanced” housing market as demand continues to woefully outpace supply.
Here’s how the top 10 metro rankings stacked up:
- Salt Lake City, Utah.
- Boise City, Idaho.
- Spokane-Spokane Valley, Washington.
- Indianapolis-Carmel-Anderson, Indiana.
- Columbus, Ohio.
- Providence-Warwick, R.I., Massachusetts.
- Greenville-Anderson-Mauldin, South Carolina.
- Seattle-Tacoma-Bellvue, Washington.
- Worcester, Massachusetts-Connecticut.
- Tampa-St. Petersburg-Clearwater, Florida.
Utah governor isn’t ‘excited’ about ranking
Asked about the ranking on Thursday, Utah Gov. Spencer Cox told reporters he wasn’t thrilled to see Salt Lake City on the top of the list.
“That’s actually not a ranking that I’m proud of,” Cox told reporters. “That’s not a ranking that I’m excited about. Because it does put additional pressure on families, which means that people are getting squeezed out.”
As Utah’s home prices have skyrocketed at an “unfortunate” and “unsustainable” rate, Cox said more Utahns have been forced to the outskirts of the Wasatch Front in order to afford a home. But even those more affordable places, the governor said, are “going up as well, which means ultimately you end up with more people experiencing homelessness.”
Cox on Tuesday unveiled his proposed budget for next year, which includes spending $228 million for housing initiatives. That entails about $100 million for developing affordable housing and $128 million to develop deeply affordable housing for the homeless, including up to $20 million to help pay for the first phase of a tiny home village being planned in Salt Lake City.
The jarring pace of Utah’s housing market and its impact on Utahns “is why we think these investments are so important,” Cox said.
The governor said his proposed budget should translate to about 1,100 new low-income units across the state.
2022 housing market forecast
Realtor.com has predicted a “whirlwind year” for homebuyers in 2022, projecting a competitive seller’s market with first-time buyer demand continuing to outpace inventory.
“With listing prices, rents and mortgage rates all expected to climb while incomes rise, 2022 will present a mixed bag of housing affordability challenges and opportunities,” Realtor.com wrote on its site. “Whether the pandemic delayed plans or created new opportunities to make a move, Americans are poised for a whirlwind year of home buying in 2022.”
Realtor.com predicts more sellers will enter the market as buyer competition “remains fierce,” which will fuel strong growth in home sales and price increases. The site is forecasting existing median sales prices to appreciate 2.9% and existing home sales to increase by 6.6%. That growth will mean 16-year highs for sales nationwide.
“Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise,” the site states, noting more than 45 million millennials will be in the “prime first-time home buying ages of 26 to 35 in 2022.”
While some housing markets are expected to see home sales decline, “these declines are likely to be modest,” Realtor.com said, and most other metro markets are expected to follow the national trend and increase in 2022.
The site predicts home prices will continue to rise, but at a more moderate pace than in 2020 and 2021. “The pandemic ignited a frenzy in the housing market,” the site states. “A decadeslong shortage which meant the market was already 5.2 million single-family homes short was met with an unprecedented surge in demand just as many were expecting the opposite response to the pandemic uncertainty.”
While builders struggled to keep up with high demand, that pushed prices higher. In August 2020, the nation saw a yearlong, double-digit home price increase. Realtor.com predicts economic growth to sustain homebuyer purchasing power, leading home sale prices to continue to rise.
But in 2022, Realtor.com is forecasting a more “moderate pace” as builders ramp up efforts and “home buyers will grapple with higher monthly costs due to rising prices and rising mortgage rates.”
“Affordability challenges will keep prices from advancing at the same pace we saw in 2021 even as ongoing supply-demand dynamics mean prices continue to grow nationwide.”