Prices may have peaked. See where.

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A new analysis suggests that soaring home prices in Ogden, Provo and some other US cities, which have seen sharp rises in recent months, are showing signs of flattening.

At the same time, prevailing rental rates continue to rise, according to other reports, particularly in Salt Lake City, which, after some measures, is seeing some of the highest rent increases in the country.

Florida economists who study the top 100 housing markets say data from the Wasatch Front metropolitan areas north and south of the Utah capital, as well as Boise, Phoenix and Austin, Texas, provide evidence of a price “crown” in those cities, d values that have skyrocketed in the past few months may have reached a plateau.

“It seems like several areas across the country are at a turning point,” said Ken Johnson, an economist with the College of Business at Florida Atlantic University in Boca Raton. The apparent coronation pattern “is common when markets are at the peak of their current real estate cycles”.

Their results show that the average price for a single-family home in Salt Lake County rose 24% last year to just under $ 542,250 in October.

The study could calm some frustrated would-be buyers in Utah, where low interest rates, rising demand, and scarce supply of available homes have pushed prices to new heights and dramatically slowed sales.

A recent Utah-based study of home price trends found little evidence that the overheated markets on the Wasatch Front would cool anytime soon. Employment growth, population growth and a 10-year lag in housing construction mean the state’s housing markets could remain tight for years, said economists at the University of Utah’s Kem C. Gardner Policy Institute.

This first analysis of its kind also found that despite record lows, more than 72% of state renters could no longer afford a down payment and mortgage on an affordable home.

A separate study by the nonprofit Utah Foundation found that more than 80% of Utah residents think house prices and rents are too high. Most of the respondents said they couldn’t afford their home if they wanted to buy it at today’s prices.

Johnson and Eli Beracha, a real estate professor at Florida International University in Miami, published results in late September showing that apartments in Salt Lake City, Provo and Ogden were among the most expensive in the US, with buyers paying premiums of between 44%. and 51% above expected long-term price trends.

That study found that all but a handful of the largest U.S. housing markets were likely overpriced, with buyers paying estimated markups of 20% or more in well over half of those cities. Boise led the way at the time, with homes reportedly 81% overvalued compared to previous price action.

Top Utah home builders have challenged this analysis, finding that prices today reflect relatively high costs of land, labor, and building materials – many of which have been bloated by the impact of the pandemic on supply chains.

“Everyone thinks builders are getting fat, but this is a worse year than last year,” said Clark Ivory, CEO of Ivory Homes, Utah’s largest construction company. “And the reason for this is that the cost has increased by 29% and our average price has increased by 22%.”

Johnson and Beracha warn that in overvalued markets, buyers may need to own their homes longer before reselling in order to make financial gains on their purchase.

Florida researchers say the five most overvalued US real estate markets currently – including metropolitan Ogden and Provo in third and fourth places respectively – are all showing signs of coronation, based on data from 1996 through October.

Their study, available online, includes single-family homes, condominiums, townhouses, and cooperatives.

The data shows prices are rising rapidly in cities like Dallas and Atlanta, the researchers said, resulting in markups even higher than those seen in the lead up to the housing crash that led to the Great Recession. In other cities, including Los Angeles and Miami, price rises have slowed, with premiums far below what they were before this market downturn over a decade ago.

“All of this suggests that some areas of the country have learned a valuable lesson about prices,” Johnson said in a press release, “while others hold a tenacious belief that house prices will go sky high.”

As affordable housing seems to be getting out of reach for many Utahns, the picture could be just as difficult for middle-income tenants.

Overall, average monthly rents have doubled along the Wasatch Front since the Great Recession, and are now above $ 1,205 nationwide, according to sources.

A recent study by the Utah Foundation found rent increases of more than 50% in Utah and Davis Counties from January 2019 to July 2021.

The online site Zumper announced this week that the Salt Lake City metropolitan area is now among the US cities with some of the fastest growing rents. One-bedroom rents in Salt Lake City rose 15.4% last year, while rents for the average two-bedroom apartment rose 12.7%. In Ogden, rents rose between 15.6% and 23% over the same period.

Meanwhile, real estate exchange Dwellsy said median asking rents in Salt Lake City are now a whopping $ 325 higher than they were at the beginning of 2021 and have increased by 26.5% from $ 1,225 to $ 1,550 per month since January are.

The vacancy rate remains at an all-time low of around 2% or less on the Wasatch front, although housing construction continues to boom.

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