Blog Post

Insight: Housing in 2020: What a Long, Strange Trip it’s Been

By: Dejan Eskic

Note: The opinions expressed are those of the author alone and do not reflect an institutional position of the Gardner Institute. We hope the opinions shared contribute to the marketplace of ideas and help people as they formulate their own INFORMED DECISIONS™.

A surge of buyers and historically low interest rates, combined with a record drop in housing inventory and a global pandemic ravaging its way through the economy, led Utah’s housing market to new heights in 2020. The year ended with a record number of new permitted units, passing the 30,000 milestone. The single-family median sales price broke the $400,000 mark and the condo/townhome median sales price broke into the $300’s (see Figure 1).

Figure 1: Utah Median Sales Price, 2010–2020

Source: PowerdByUtahRealEstate.com

So what was difficult about 2020 for housing? Our recent Survey of Utah’s Top Homebuilders sheds light on some of these difficulties. As customers locked in prices for new homes, material prices increased during the construction process, cutting into profits and pushing up the price for the next buyer. Random shortages of dishwasher screws, windows, or tile grout were eclipsed by the drastic surge in lumber prices.

Construction crews had to deal with the pandemic at the jobsite.