Supply, Land Prices, Income: The Complicated Equation Making Housing Unaffordable
Covid-19 has exacerbated the housing costs in Utah, making the market unaffordable for many renters and buyers. Dejan Eskic works at the Kem C. Gardner Policy Institute and said tremendous change is one reason why housing has become so expensive this past year.
“About five years of acceleration occured in one year in terms of housing price," he said. "That’s, you know, made housing a very hot topic. Housing has already been a hot policy issue because it’s being deemed less and less affordable.”
Income is just one of the elements making housing unaffordable for buyers. Although increasing wages would help the housing crisis, policy on land use is another key piece.
"Land has gotten so expensive over the last decade that currently the more units you can fit on to an acre, the more affordable that housing unit becomes," Esik said. "Income is a big part of the equation but it is also policy.”
The rush and the frenzy of the pandemic led some people to buy a house in search of a larger place to quarantine. On average, it took about two weeks for a house to sell in early 2020, compared to right now when houses are selling in about four days. This pace has decreased the number of homes for sale and increased competition between buyers.
Isaac Walbeck, a real estate professional at Cornerstone Real Estate, has seen this competitiveness during his time as a realtor.
“Usually there are about 300 active homes for sale in Cache Valley," he said. "When I checked this morning there were 60 and 60 is a lot compared to what it used to be.”
Walbeck said in the early months of the pandemic the number of available units each day was down to about 20. And although there are issues to address when it comes to affordability, demand does not seem to be decreasing any time soon.