The last couple of years have seen a strong Salt Lake Real Estate market with prices seeing double digit increases and strong demand for all types of property, particularly in the lower end of the market.
One of the reasons for such a strong demand was the reemergence of the investor. This was particularly evident in the $100,000 to $200,000 price range, where it was often difficult for people trying to get on the property ladder. The competition was fierce with homes selling within days of coming on the market, often resulting in multiple offer situations.
Now Salt Lake did not have the glut of foreign buyers seen in places like Los Angeles and New York (I have seen some stats that say the Chinese were responsible for $8.2 billion worth of U.S. property purchases in 2012), but we did have an influx of investors from other parts of the U.S.
In the last quarter of 2013 things started to change. The market slowed; there were fewer home sales and some areas even saw their median sales price dip. Some people put this change in the market down to the rise in interest rates, but one of the reasons was that investor sales seemed to have slowed.
So why have investor sales dropped? Well investors are bottom feeders, and rely on plentiful short sales and bank foreclosures. When the market improved these types of sales became fewer and fewer, taking away their opportunity for investment properties.
Of course this change is not bad news for everyone. The slowing of the market means that it’s now easier for first time home buyers to purchase. Because they don’t have to compete with investors there is less change of multiple offer situations and more change they can purchase the home they are looking for.