These are not my words, they are from a recent article in Forbes Magazine. According to the magazine article, Salt Lake is the sixth most recession proof city in the U.S. This is based on the fact that the city’s unemployment rate is low, that we are still creating jobs and that the housing market remains strong (well at least compared to other cities).
This economic strength may well explain why the Salt Lake housing market is not seeing the large declines like other major cities and that the foreclosure rate, while increasing is relatively small. Even with the number of homes sold decreasing by 40% and days on market increasing by a similar margin, the median sales price still went up in the last quarter. The reason prices have not declined, is that most people don’t have to sell. They have a good job, and are reluctant to lower their price, so their home just sits on the market. This results in a stalmate, with buyers wanting a bargain, and unwilling to pay full price for a home.
A good example of this was an offer recently made for one of our listings. The buyer offered 20% below asking price. The reason for the low-ball offer was that they had relocated here, and had to take a 20% hit on the sale of their home. Because of this, they assume that the Salt Lake Market is going to go down by 20%.