Housing costs in Utah are so much above historical trend lines that three cities are currently among the top 10 most expensive markets in the country. This is based on a new analysis from Florida Atlantic University.
Driving the news: Average home prices at the end of April were about 56-65% higher than expected, the report said. actual average prices compared long-term price trends.
By the numbers: Ogden was the third most inflated market in the nation, surpassed only by Boise, Idaho, and Austin, Texas.
- Provo ranked No. 7, with an average home price of $585,024, 57% above the analysis’ expected average of $372,568.
- With an average home price of $602,765, Salt Lake City ranked 10th, beating expected prices by about 56%.
And after: People who have recently purchased their home could see its value level off when the market eventually stabilizes, said study co-author Ken A. Johnson.
- Rising interest rates are already starting to cool demand in some markets, Johnson added.
Meanwhile: The entire Wasatch Front was deemed “overvalued” in a analysis at the end of May commissioned by Fortune. This means house prices are rising faster than wages and other economic indicators.
The context: When the last housing bubble burst in 2008, homes were much cheaper than they are today.
- Salt Lake City peaked around 20% from the 2008 trend line, with Provo at 23% and Ogden at just 13%.
Yes, but: As long as people are still moving here, Utah home prices are unlikely to drop this time.
- Fortune reported northern Utah was at “very low” risk of lower prices next year, despite being overvalued.
- Instead, Johnson told Axios, “You’re going to have this long stretch of unaffordable housing.”
- Inventory is always down and home ownership inaccessible here, so anyone who has managed to buy recently is probably relieved to have a home.
What they say : In 2008, “you had huge oversupply, and not as many people moving in, so when prices started to drop, there was nothing to catch them,” Johnson said. “This time you have the opposite.”
Zoom out: The American West is strongly represented in the top 10 most inflated markets.
- Las Vegas is No. 4, with Phoenix at No. 6 and Spokane, Washington, at No. 9.
- Utah is the only state with more than one city in the top 10.