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How to Use the Changing Market to Your Advantage

As we all know well by now, the Utah real estate market (especially in the counties surrounding Salt Lake City) has been ablaze for the last couple of years. Competition has been intense, to say the least: we’ve seen record low inventory, low interest rates, and booming population growth…and home values skyrocketed. For first-time home buyers—especially those not in a position to offer cash—it’s been a pretty discouraging time. It’s no small task, entering a market wherein you can’t risk purchasing a property above appraised value and you’re competing against an horde of ambitious offers. In light of this, many buyers opted to change priorities, focusing on condos or town homes rather than single-family properties. Some started searching farther away from competitive neighborhoods to increase the odds of a successful offer and purchase. Others simply decided to continue renting and cross their fingers for a market shift that might finally give buyers something of an advantage.


No matter which category you may (or may not) have fallen into, we’ve got a bit of good news for buyers who have been on the sidelines, patiently waiting for an opportunity to enter the market: your time has arrived. With more homes (inventory!) on the market and rising interest rates, we’re finally seeing a shift in the dynamic. Buyers are officially in a much stronger position to find the property they want at a price they can afford. We’ve got a handful of (very) helpful ways in which you can use this shifting market to your advantage…but first, let’s address a few points worth noting:

  1. Seeing interest rates inch toward 6% may feel scary, but these interest rates are more in line historically with the average expected on a mortgage for buyers.

  2. Home values have increased pretty drastically. In 2018, the median home price in Salt Lake County was $418,376. In 2021, it was sitting at $535,000— this is a 27.9% increase, which has lowered buying power for many.

  3. Even with the change in tide, home values are likely to keep going up. Yes, inflation and higher interest rates have slowed the market down, but prices are still climbing…just at a more healthy, balanced rate. And in Salt Lake County, where the vacancy rate is 2%, it’s clear that there are a lot of people looking for places to live. The economic truth of supply and demand is still very much in play.

It’s important to recognize that while this is looking more like a buyer’s market, home values with higher interest rates do still make home affordability a challenge. That said, we’re here to help. With a little creativity and some patience, you can get the home you’re looking for. So, let’s get to the good stuff…


Here's how these market shifts can work for you...


Tuesday shopping? More like two-week shopping.

Over the last couple years, a home listed on Thursday was likely under contract come Monday (if not sooner). But some properties—typically those that were overpriced or had some less-desirable qualities—might sit for a bit longer. For the savvy buyer, this always means opportunity, and with the market shift, you have even more time. It’s a healthy sign that a more balanced market has arrived—sellers who expected their homes to go under contract immediately (with several offers) are no longer in an elevated position. We always recommend that buyers keep an eye on new listings, but a property that’s been on the market for 7+ days is no longer a red flag with potentially serious issues, and you may be able to submit an offer without the chaos of several other competing offers. Sounds nice, doesn’t it?


Contingencies are back on the menu.

Maybe your friend or family member bought a home in the last two years. And maybe they told you how they had to offer the naming rights of their first born child, swear allegiance to the seller, and waive all contingencies in order to beat out other offers. Yes? Well, for the most part, those days are over. While you may still run into properties with competition, you’re less likely to see 20+ contending offers…four or five is a more realistic number for now. Or—if you and your realtor are strategic—none at all! Buyers can now write offers that include plenty of protections. Don’t be afraid to ask for Buyer Due Diligence and Appraisal contingencies, and use the leverage you have to negotiate when appropriate. Truth be told, it’s in everyone’s best interests for these protections to be in place


Time to sweeten the deal.

Higher interest rates and home prices certainly affect buyers in a major way. That said, there are ways to ease the burden…and have the seller help you do it. Sellers are, in short, making a good deal more on their home sales than before (remember that stat about values increasing almost 28% in three years?), and with higher inventory and a smaller pool of buyers, they are in a position to sweeten the deal a bit. It can be done in many ways, but here are the two most common:

  • Closing Costs: Most people know about bringing a down payment to a transaction, but buyers are often surprised by the closing costs. These costs vary, but you can typically count on it being roughly 1-2% of the purchase price. And with the median home price in Salt Lake County sitting just above $600,000, that extra $12,000 adds up quickly. Here, a seller can use part of their earnings in helping a buyer pay down those costs.

  • Discount Points: We are admittedly not mortgage experts, so we advise you to talk more about this with your lender, but one option that’s typically on the table involves paying down your interest rate using discount points. Essentially, you’ll pay the lender a fee to make your interest rate smaller. If you’re worried about your monthly mortgage payment, the interest rate is a big variable in that equation. And similar to closing costs, a seller can use part of their own earnings to help a buyer accomplish this.

Time is on your side. Yes, it is.

With the volatile stock market, inflation, and a fear of a recession looming, many buyers are nervous about purchasing an expensive asset, only for it to lose value. A good rule of thumb (in life and in real estate) is to buy only what you can afford. During the “hot” market, buyers likely felt pressure to stretch their budget, accept cash gifts from family, or dip into their 401k just to compete. However, buyers can now explore different homes and neighborhoods before writing an offer—this breathing room is critical in order to be informed and to make a confident decision. Stick to your budget and have patience…the right property will show up.


Being an Investor(ish) is an option.

If your heart is set on a neighborhood that is out of your price range, or you’re hoping to purchase a home with a higher monthly cost, you can entertain the possibility of buying an owner-occupied, multi-family home. While we still advise discussing with a lender first, this option comes with a few very surprising pros that you may not be aware of. With lower down payment requirements than an investor (15% vs. 25%+), interest rates at about the same as a single-family home purchase, and the ability to count a percentage of the rental income toward your income, multi-family homes are a unique opportunity to get your foot in the door (they also come with higher borrowing limits than a conventional loan). This option comes with obvious risks—such as becoming a landlord and property manager—but real estate investors are feeling the brunt of interest rate hikes even more than the average buyer…which means that competition for these properties has slowed.


Much like the stock market, trying to perfectly time and outsmart the market is nearly impossible. But sticking to a few tried-and-true strategies will, more often than not, work out. Data and anecdotal evidence are helpful, but we don’t have a crystal ball. The bottom line? Be open to opportunities and do what feels right for you.