The Utah County real estate market had been experiencing steady price increases, with all indicators pointing toward a healthy, growing market. However, everything changed with the arrival of COVID-19.
By the end of 2020, property prices began spiking far beyond the typical appreciation patterns. At the same time, the number of homes listed for sale—and the number of homes sold—dropped significantly. This created a situation where inventory became incredibly scarce, and as Econ 101 teaches us, a lack of supply drives prices up.
Pre-COVID Market Trends: Before the pandemic, property prices were steadily increasing, likely driven by factors such as population growth, demand for housing, and economic conditions that supported a healthy real estate market.
COVID’s Impact: When COVID hit, the market reacted unexpectedly. The combination of uncertainty, changes in consumer behavior, and perhaps government stimulus actions played a role in causing a sharp spike in prices. Normally, market conditions might not allow such rapid price increases, but these factors created a perfect storm of demand and limited supply.
Decreased Inventory: The number of houses listed for sale dropped significantly as a result of various factors—homeowners staying put due to economic uncertainty, fewer people willing to sell, and possibly builders being unable to keep up with demand due to supply chain disruptions. This decreased inventory, combined with continued demand, created an environment where Econ 101 principles (supply and demand) led to higher prices.
Price Increases and Low Inventory: The supply and demand imbalance you’re describing—fewer homes available and still-high demand—explains why prices spiked during this period. With fewer homes on the market, competition for those homes drove prices up.
Second Chart – Homes Listed: It seems like you might have another chart showing the number of homes listed, which would add context to the discussion. If the number of homes listed sharply dropped, this would confirm the low inventory situation, highlighting the root cause of the price surge.
This situation illustrates how external factors (like a pandemic) can disrupt a well-established real estate market and lead to unexpected trends.
WashburnRE has been serving sellers, buyers, and investors for 2 decades in Utah County and surrounding areas. With thousands of transactions completed, we specialize in New Construction homes and have relationships with dozens of artisans. We look forward helping you maximize your investment and get exactly what you deserve.