Home buyers frustrated by low inventory, record cash prices
Skyler Beltran | Lehi Free Press
The old saying goes, “cash is king,” and in today’s Utah real estate market, it’s the truth. As housing inventory continues to remain at historic lows, buyers are feeling the pain.
In the last 60 days, 1,051 homes have sold for cash in the state of Utah, compared to 748 during the same period a year ago. That 40% statewide increase is even more significant in Utah County, where cash sales are up 52%, with 187 sales in the last 60 days compared to 123 a year ago, including nine properties sold for over $1 million.
The cash purchases aren’t just affecting one segment of the market. They have been across the spectrum, from a $190,000 two-bedroom condo in Orem to a $4,550,000 home in Sundance, with every price point in between. Buyers are feeling the squeeze.
“It’s even hard on the listing side listening to all the stories of these buyers struggling, and then having to break their hearts when we have to deliver the news that the seller accepted a cash offer that closed in six days because that’s what’s best for the seller,” said local real estate agent, Andrea Herzog.
Utah County’s traditionally affordable communities are seeing the largest increases as the bottom of the market continues to rise. Eagle Mountain saw a sale-to-list price of 104% in January, followed by Payson at 103% and Spanish Fork at 101%, as buyers try and own homes any way possible.
“We lost a house today that went for $33,000 over asking, due diligence and appraisal waived, and $20,000 in nonrefundable earnest money,” said Utah County realtor Karen Curtis when describing the current market conditions.
“We found a client her dream home, and I was feeling confident she could get it. It was listed late Saturday evening with showings beginning Monday, and I booked our appointment for early Monday. It turns out we didn’t get it after an out-of-state buyer made an all-cash offer Sunday, sight unseen,” echoed Erin McBride, another local realtor.
To start 2021, the average home price in Utah County is now over $450,000. Economic forecasts don’t see any sign of it slowing down. According to the Kem C Gardner Institute at the University of Utah, demand is being driven by Utah’s low unemployment, diverse workforce, historically low-interest rates and a housing shortage of nearly 50,000 units.