Market Insights: Salt Lake City Slowing, Offering Opportunities For Buyers

Salt Lake City was a pandemic hot spot but as the housing market evens out across the nation, one senior loan officer who works in the metropolitan area says buyers are seeing some relief.

According to data from Redfin, home prices in Salt Lake City were down 8.5% in March compared to last year, selling for a median price of $540,000.

The city was ranked fifth on a recent list of the 10 U.S. cities where home sales were down the most, in part because fewer out-of-state buyers are relocating to the “Silicon Slopes.” In November 2021, there were 1,506 sales, compared to 708 in November of 2022.

Cory Ure works at SecurityNational Mortgage Company in Salt Lake City. He recently sat down with Editor Kimberley Haas to talk about what he is seeing in the area.

Haas: So first, tell us a little bit about yourself and how you got into the lending space.

Ure: Prior to this I was in professional motorsports for 23, 24 years, I think. The last 10 of those I was working for a manufacturer that provided products to race teams, aerospace, original equipment manufacturers like Harley Davidson, Mack Trucks, and Cummins Engines.

Then one day that company got bought out by some venture capitalists. And in 2005, right before Christmas, I found myself without a job.

My wife at the time was a loan officer. After being around for a few months on my severance package and everything and trying to find someone to hire me at what I was making before, I decided I’ve got to start signing the front of the paycheck and not the back of the paycheck anymore. So I became a loan officer also. And that was 17 years ago last month.

Haas: What was the transition like going from the world of motorsports to becoming a loan officer? I can imagine there are a lot of people out there that might be reading this and saying, “Hey, you know, why not? Why can’t I give it a shot, too?” You know, come from a completely different background.

Ure: It’s total vertical learning curve. One of the strengths I did have is that I had a deep history in sales and I’m definitely not an introvert, so I don’t have problems reaching out to people and talking with people and such.

But one thing we lack in this industry, in general, is actually training. You do your licensing, you do all your education and all that. It really revolves around the law.

There’s nothing really about loan products and how to structure loans and processes and stuff. You get a license and then you have to figure all that out for yourselves.

So that was the vertical learning curve part of it. But I am a guideline freak. I don’t have a problem reading through the seller’s guide for Fannie and Freddie. That helped me a lot in the beginning in learning how to structure the products, structure the loans, seeing what boxes people could fit in based on where I knew the boundaries were on the playing field.

Haas: Tell me a little bit about what it’s like in the Salt Lake City area. It’s definitely someplace that people talk about when we’re talking about the housing market. What have you been seeing there in the last couple of years and what are you seeing now looking forward into the second quarter of 2023? I imagine you like many other places are starting to see more homes hit the market as the spring selling season begins.

Ure: I think like everywhere in the country, 2020 and 2021 were absolutely on fire. I don’t think there’s a realtor or a loan officer in the business that probably didn’t have their best two years ever.

The general Salt Lake City metro areas were some of the hottest areas in the nation. Just flat out. You can read any magazine at any time that would tell you that Utah was one of the hottest markets.

We also saw some of the biggest increases. Home values were going up 25% a year for about two and a half years there. So a lot of people now have a ton of equity. But we do have challenges in that.

We had a lot of people coming in from out of state with higher incomes than was paid in Utah. They were able to afford more house. And that started driving the home prices up.

We were seeing a lot of bidding wars. That went on across the U.S. but it was exceptionally strong here where people were paying 10% or more over the asking price to buy a home. I mean, I saw one where the home went for almost $200,000 over the asking price. Which is absolutely nuts. I mean, it was a $600,000 home. Someone paid $790,000 for it.

Now the challenge we’re facing is home prices and values have gone up over 50% since 2020 at the beginning of the pandemic, the dark times. But incomes haven’t increased that much.

One thing we’re looking at is the median household income in Utah is about $79,000, but the median home price is almost $560,000. And it takes an income of around $120,000 at the current interest rates to qualify for that $560,000 home. So we’re seeing a big disconnect between household incomes and the median home price here in Utah, which is pricing a lot of, especially first-time home buyers, completely out of the market.

On the flip side, things have slowed down since interest rates started going up a year and three months ago in January of 2022.

We’ve seen it slow down to the point now at least where first-time home buyers aren’t having to come to the table with $50,000 over the asking price. First-time home buyers usually don’t have that kind of money. They’re minimum down payment or down payment assistance type situations.

Values are not decreasing, even with the interest rates where they’re at and sales slowing down. What’s happening is homes are selling for the legitimate price of what they’re actually worth.

Sellers are now offering concessions again, where they weren’t the last two years at all. I mean, if you wanted someone to give you $10,000 toward your closing cost, they would just move on to the next offer. Now, sellers are actually entertaining concessions.

Haas: Now, did you see a lot of investors come into the area as Salt Lake City got all of this attention?

Ure: Oh yeah. One in five homes in Utah over the last two years was going to an investor.

Haas: Tell us about that and what’s that like when you’re dealing with it from your end as a senior loan officer? I know there are challenges for a lot of people in that situation, what do you see on your level?

Ure: It is frustrating. At one point in my life, I was a first-time homebuyer so I’ve had a lot of sympathy for a lot of these first-time homebuyers that were being completely shut down by investors coming in and paying cash. And we had big investors.

They’d go to a builder and say, “We’ll buy 10 homes right in a row from you.” Even some very qualified buyers couldn’t compete against these investors, especially these big pension funds and hedge funds coming in and paying way over value.

Maybe it’s part of the whole idea of making everybody a renter. You know, whether we’re leasing our car or leasing our house, that’s maybe where we’re going. I don’t know. But it was very frustrating. Very frustrating because it took so many homes off the market that could have gone to people here in Utah who wanted to own a home but were getting beat constantly by investors who would pay cash and close in 10 days.

Haas: Are you seeing a pullback in that space?

Ure: A ton. I honestly have not seen a whole lot of stuff being bought up by investors at all in the last year.

My wife is a real estate agent and over the last few years you would see quite a few scouts coming through for investors. You know, they’d come through and take pictures and take notes and they’d be on the phone with the investor. Most of these investors weren’t big time hedge funds or anything like that. They were smaller time deals.

In any open house I’ve done over the last nine, 10 months, I have not seen a single scout come through a house looking at it for an investor. So it has slowed down.

Haas: That’s the exact reason why we’re talking to people like you, Cory, people that can see, taste, hear, smell the atmosphere there. So to hear that things are pulling back in the Salt Lake City area gives me hope for some other areas of the country where the average family has had a harder time getting into housing.

Ure: That’s important to me because that’s my bread and butter. I don’t do a whole lot of business with investors, either they’re coming in with cash or they have their own cash sources to begin with. My bread and butter is the everyday person wanting to buy a house as their primary residence and occasionally they might wanna buy an investment property or a second home.

It makes me feel good because now I can start helping people again.

Haas: What are you seeing as we roll into Q2 of 2023?

Ure: Rates have started to come back down a little bit. It is coming towards spring. I’ve had several agents I’ve worked with who’ve had listings and those listings have gone under contract in the first week. That was unheard of even three, four months, months ago.

Haas: What are you looking forward to as a loan officer? Maybe even when it comes to new technologies and stuff like that? I know there are always new tools on the market for people in your profession to streamline things.

Ure: I think one thing that has helped, and I see helping more, are mobile apps. They’re becoming more and more effective. A few years ago they were very rudimentary. They’re getting much more polished now.

When you have mobile apps that people can, using their camera on their phone, scan their document and upload it directly into the file that makes it a lot easier.

Zoom has become a tool I have really utilized. It’s a good way to meet with a client face-to-face. And being that I’m licensed in numerous states, we can meet like we are in my office.

I think that builds a lot of trust with clients when you can actually see them. You can screen share and show them different loan scenarios. You know, whether it’s an ARM or a fixed rate, if you’re paying points, not paying points.

I personally feel that a well-informed client is the best client. Technology has made it a lot easier for me to provide information.

Haas: What’s your advice for somebody who is a loan officer that’s just starting out?

Ure: Keep plugging away. That would be my biggest advice to loan officers, whether experienced or just beginning, is keep your head down. Don’t listen to the crappy news. Just keep making those calls, keep talking with clients, keep up relationships. In fact, right now, because it’s slower, it’s a great time to get in touch with past clients you’ve been out of touch with.

I’ve always said that one of the hardest parts for me in this job is that in the time you get to do a loan for someone, from when you get them pre-approved to when they buy the house, it might be three months. You really get to know these people in that three months. You get to know everything, you know all these things about their personal life sometimes. And then it’s like you go to the closing table and they get their keys and it’s like breaking up with a girlfriend.

It’s like, “Wow, I guess we’re not gonna be talking anymore.”

It’s good to keep in touch with those people.

The real money is in the follow-up. Everybody knows at least, what do they say, 12 people that they could refer you to, whether it’s friends, family, coworkers, or whatever. And that’s the business you should always be after. The worst thing in the world is opening up Facebook or something and seeing one of your past clients just bought a new home and didn’t use you.

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