Davis County, Utah Real Estate and Housing Market Trends and Forecasts
January 1, 2023
5 min read
Known as Utah’s Amusement Capital and located near Salt Lake City, Davis County, Utah is famous for its amusement centers, golf courses, miles of trails, and delicious restaurants. With so much to do plus affordable housing, Davis County has become a popular destination for many families, causing a boom in the real estate market. Purchasing a home right now provides a wonderful financial opportunity for your clients and their families.
If you have clients who are hesitant to buy a home because they've heard talk of a housing bubble in the media or they’re worried home prices may decline, you can use MBS Highway's Real Estate Report Card to show them the strength of the market in Davis County right now.
Let's break this powerful tool down so you can see how you can use MBS Highway's Real Estate Report Card to help your clients move forward with a home purchase and to gain valuable referral relationships.
Forecasted Appreciation Provides Great Opportunity
Let’s begin by analyzing affordability and appreciation. The median home price in Davis County is $379,545. We have strong appreciation with the 10-year historical appreciation rate at 4.71%, while the forecasted 1-year and 5-year cumulative appreciation rates are 6.96% and 24.35% respectively!
While these figures are significant, let’s break down the numbers even further and look at what this really means for your clients. Purchasing that $379,545 home today, given the forecasted appreciation rate of 24.35% over the next 5 years, means that buyer will gain $92,404 in appreciation alone! Showing your clients this gain so clearly using the Real Estate Report Card can help them realize the financial advantage of acting on their home purchase now, which will increase your production and help you build valued referral relationships.
You may have customers that wonder if they can afford a home in this area. You can use the Real Estate Report Card to show them that affordability is very strong in this market, as evidenced by the Affordability Index of 130.29. This means that a family earning the median household income for Davis County of $86,093, which is well above the national average of $55,909, can afford 130.29% of the median home price when putting 20% down.
Of course, not everyone is putting 20% down, but you can see how this information gives homebuyers a good gauge of what they can afford, helping you build your pipeline and build relationships with both new and trusted referral sources.
Honing in on inventory, we can see that there are just two homes available for every 1,000 people in Davis County. Inventory is down 25% year over year and is flat month over month.
What’s more, it's crucial to explain to your clients that low inventory will likely be a factor for the foreseeable future – and it’s probably not going to get easier to purchase a home. Here's why…
Based on our demographics, there are currently around 48,820 people who are between 27-35 years old. This number is important because those in this age range are first-time homebuyers, and our goal is to see what kind of business we can gain from this demographic and how we can help them benefit through homeownership.
Out of these 48,820 people, 4,638 of them will either rent or purchase a home in the next year. And out of these 4,638 household formations, considering that Davis County has a very healthy 77% homeownership rate, around 3,550 will purchase a home.
To meet this demand, builders would have to build 3,550 homes each year, or this amount of homes would have to become available for sale. Yet the actual number of homes being built is just about half this amount, at 1,760!
This inventory and demographic data combined provides such an easy way to express to potential clients why they shouldn't delay their purchase, which again can help you increase production and gain the trust of key referral sources.
The bottom line is we have an inventory shortage, and this is a big reason as to why now is such a good time to purchase a home before it becomes even harder if inventory tightens even more or rates move higher due to rising inflation or other reasons. Plus, there's also the strong forecasted appreciation rates as discussed above and the fact that homes are selling fast.
Strong Job Market A Good Sign for Housing
We've seen steady job growth in Davis County over the past few years, including last year when much of the country experienced job losses as a result of the pandemic. And we anticipate strong job growth to continue for the foreseeable future.
The current unemployment rate is a low 2.93%, which is much lower than the national average of 6.1%. And it’s likely the unemployment rate could decrease further as the economy continues to reopen.
A strong job market is another reason the housing market is expected to remain strong in the Davis County area, as people are more inclined to purchase a home when they feel secure in their job. The opposite is also true.
MBS Highway’s Real Estate Report Card is just one of the many tools in MBS Highway that can be the crucial differentiator in turning prospects into buyers who have won their dream home – and turning originators into advisors their clients trust. With an MBS Highway membership, you'll have access to all of our tools, including Bid Over Asking Price, Buy vs. Rent Comparison, Loan Comparison tools, daily coaching videos, lock alerts and much more.
Do you want analysis like this on a daily basis? Try all of these tools for free with a 14-day trial and see for yourself the kind of difference they make in your business!