First time buyers who aren’t paying cash to buy a home are often confused as to the purpose of an appraisal is in order to get a mortgage. Most buyers I’ve worked with in this situation believe that the appraisal is done to protect them but really, it’s done to protect the bank.  I use this example to explain:

You arrive in this new city of Salt on a stagecoach from Evanston, Wyoming. You are your bride are excited as you’ve got a great new job at a copper mine and her folks have given you both a downpayment for a starter cottage near the Salt Lake Temple locals built downtown. A relative told you to look up Ezrus Smith, a man of many talents who is a horse trader, a banker and sells real estate. Ol’ Ezrus only has his own interests in mind (you don’t know this) and tells you owns a sweet little home with 10 acres of land around 600 North and 300 West for $15,000.  As a relative referred him to you, you trust him and agree to buy the property.  The bank doesn’t have a policy to have an appraisal done and the deal closes escrow.  The banker trusts Ezrah and everyone is happy with the transaction…until…you get fired and must move back east to live with relatives.   The home goes into foreclosure and during the process the bank finds out that the property wasn’t and isn’t worth $15,000, but merely $6,000. The bank is out what was considered a large amount of money back then and, like other banks, decided that before they lend money for a home purchase, they will send out an appraiser to prove or disprove the price. The banker sues Ezrah and he is found guilty, goes to jail for a bit and stays out of the real estate business.

When you get an offer accepted on a property where you’re getting a loan there’s a ‘subject to’ contingency already written into the contract, meaning IF the property doesn’t appraise for the purchase price you have the right to cancel the contract and not lose your earnest money. Back in ‘Covid Days’ people were so desperate to win a multiple offer situation they eliminated that contingency to make a seller feel better about the offer. It’s a risk that you might overpay for a home, but some are willing to buy/do anything to get the property in their name. There are options when an appraisal comes in low: the listing agent can submit comparable sales to prove the list price, the seller can lower the under-contract price to the appraised price, or you can back out. In this situation I generally see the seller adjust the price to the appraisal, but not always. Also, your broker can run comparable sales data on any home you want to purchase and run their own analysis/opinion of price before you make an offer.

There is some good news in real estate these days…the market is SOFT, which means buyers are getting an advantage if they want to jump back into the market. I’m not talking about the mortgage interest rates that keep climbing but the simple logic that there’s more inventory than we’ve had in some time and that’s to a buyer’s advantage.  There’s almost twice as many listings as have been closing recently so that points to lots of choices for buyers. One industry expert says “We are witnessing the greatest buyers’ market in the history of real estate” after Redfin reported that sellers now outnumber buyers by almost 60%.

Although mortgage rates are now @7+%, here’s a glimpse at previous decades and their rates: 1975-9%, ’85-13.5%, ’95-7.9%, ’05-5.7%, ’15-3.9% and ’25-6.7%.

That figure is a national average, as some areas of the country have very few homes for sale vs a ton of them.  Sellers are outpacing buyers, but many are sitting in their Lazy Boy loungers thinking to themselves, “I really don’t have to sell, let’s see what I can get for this place!”  Homeowners are still pricing themselves like its COVID days, expecting dozens of offers over asking price the moment the property hits the market, but those days are gone.  I have once client who’s had at least six offers -all about the same price- and has refused them all, saying they are ‘Too Cheap”.  I become a broken record by repeating over and over, “A property is worth what a buyer is willing to pay, not worth what you need to get out of the sale.”  In our Salt Lake market, there were 962 price reductions in February vs 1,742 in June and there will be more to come as we head into the November/December holidays where folks would rather nest than buy or sell properties.

Buyers are seeing higher rates due to inflation, war, high oil and food prices, and massive layoffs, etc. The Fed just made a big move last week to raise rates in response to growing inflation.  For the first time since 2023 the Federal Reserve unanimously hiked its interest rate to hopefully ensure price stability and promote full employment in the economy. Despite rising rates I’d say write offers if you see properties you like, as it doesn’t cost a dime to make an offer. And, many sellers now are offering to help pay your closing costs to get the loan done.

Unless you’re a cash buyer, you have to get pre-approved with a lender, bank or credit union as you have to prove to a seller that you can purchase, have had a credit check, a job, a down payment, etc. before they agree to negotiate with you.

The right time to buy is when YOU are ready, willing and able.  And methinks rates could be 8% by the end of the year, so get pre-approved now and let’s go shopping!

Last week I explained why banks require appraisals when you get a home loan. This practice didn’t start until 1980. I think one of the reasons was because in 1974 the Equal Credit Opportunity Act allowed women to get a credit card without a male co-signer and apply for mortgages and car loans without co-signers. This increased the demand for housing as for the first time in history in the U.S. women could buy on their own and were hungry to do so.

Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) were created by Congress in 1938 as part of the New Deal after the Great Depression to support the housing finance system.  Their primary role is to buy mortgages from lenders, either holding them in their portfolios or packaging them into mortgage-backed securities (MBS) that are sold to investors. This process provides lenders with cash to issue more loans, ensuring a continuous supply of mortgage funds for homebuyers and investors in multifamily properties

By purchasing mortgages Fannie Mae and Freddie Mac reduce risk for lenders and investors, making loans more affordable and accessible to their customers.   They support the secondary mortgage market, which allows banks, credit unions, and mortgage companies to continue lending even during periods of financial stress which in the long run helps maintain lower interest rates. Fannie Mae and Freddie Mac support roughly 70% of all U.S. home loans.  They also promote affordable housing by backing loans such as conventional loans and require appraisals in most cases. And they just updated their appraisal forms that are now mandatory for all appraisal required transactions.

The rules for appraisals have been updated, and your lender may not require a traditional appraisal for a home mortgage. There are several alternatives now including drive by and desk appraisals when it’s a simple loan/purchase with strong comparable data. Your mortgage lender/bank/credit union is the one that determines whether or not an appraiser has to visit the property measure it, draw a floor plan, not any issues in condition or if an automated underwriting system will fit the need of the lender to prove value in the purchase.

Utah’s housing market is soft, which is great for buyers, but interest rates hover around 7% and may go up further with the next meeting of the FED this week.  The Kem C. Gardner Policy Institute here at the University of Utah reported last week that with an average monthly mortgage payment of $3,669, home ownership is out of reach for roughly 91% of renters here in our State.

Sure, rates can come down and there are deals to be found in housing, but you must start by getting pre-approved with a lender if you’re not paying cash. The lender can pull your credit and counsel you on options now to buy or help fix your credit so you can buy at a later date.

    It’s about time we looked at the ever-changing demographics of our state to see where we stand these days.  According to usafacts.org our state grew in population by 35,900 between 2024-2025 with the annual 1% increase primarily driven by births outpacing deaths. In the ten years prior to that, we grew by 17.9%.

We know Utahns like to breed and although our population grew due to births, it’s interesting that birth rates have gone down in the past decade. According to the EPHT Health Indicator Report Utah had 44,992 live births in 2023 which is a rate of 13.0 per 1000 residents, down about 26% in the past decade. Yet, the U.S. birth rate for 2023 was 10.7 per 1,000, making Utah stats way above the national average. And according to utahbusiness.com our total fertility rate fell to 1.801 in 2003. We were the 4^th most fertile state in the country, but as of 2023 data, we’ve dropped to the 10^th highest. There has been a 15-year trend in Utah’s fertility rate, with the sharpest drops among the 25-29 and 30-34 age groups. There was an interesting minor blip in the birth rate during ’23-’24 due to delayed pregnancies from the COVID Pandemic.

Utah County has had the largest population increase in Utah as of data from 2025, with Summit County losing 109 residents. But, between 2024 and 2025, Tooele County gained 3.1% in population, Washington County up 2.5% and Iron, Box Elder and Morgan County were almost in a tie for third place growth per the U.S. Census Bureau. Our neighbors in Idaho saw a 22% increase in population between 2015-2025, Nevada increased by 14.9% and Arizona by 13.7%.

In my world of real estate sales, I’m running into almost an equal mix of people moving in and out of Utah. Given that NO city in the world has ever recovered from a Salt Lake running dry, some are leaving because they are afraid of the potential toxic dust containing arsenic and heavy metals when the winds blow over the lake, and with out our lake we really won’t have much snow in our mountains as the lake level and our ski resorts are connected. Lower the lake, less snow.  Yet, I keep working with folks moving here to attend or teach at the U of U Med school. Some are surprised at our cost of living, but that depends on where they come from. Clients moving here from San Francisco are happy as hell with rental and home prices given that it’s impossible to find a one bedroom apartment for rent in San Francisco for less than $4000 as compared to an average of $1,300-$1,427 per month in Salt Lake City (per apartments.com). The techies have discovered our State and many companies have relocate here or are planning expansion offices here.    Our Job market is strong, and according to the Department of Workforce Services, our unemployment rate in May of this year was 3.7%, meaning 96.3% of our employable citizens have jobs. The U.S. rate for the same month was 4.3%.

Salt Lake City Corp. is concerned about the Great Salt Lake drying up and the remaining dust killing all of us with toxic chemicals. I recall when SLC set up the E2 Business program under then-Mayor Rocky Anderson in 2003.  I signed up and was the first company to do so. Several of my fellow Realtors at the time thought I was promoting bigger lawns because I was ‘going Green’ (for reals!). Our city is diligently trying to keep getting our town greener through a program called ‘CLIMATE FORWARD SLC’. Tyler Poulson, founder of Collaborative Climate, a firm specializing in climate and clean energy solutions for public, private and non-profit clients of which SLC is one is leading the study.

His firm polled several local businesses last December about what types of sustainable measures local businesses are doing and their financial/tech issues as to how to be more sustainable. Climate Forward SLC-a continuation and enhancement of former city priorities- has a goal for us to reduce greenhouse gas emissions here by 40% in 2040. Where are these emissions? In our buildings, on the roads and via materials and food waste we all contribute to daily.  A study called ‘existing conditions report’ on the website notes risks, carbon sources, and input that’s been collected earlier this year on city’s website such as the fact that air quality ground level ozone impacts-local air pollution-has reduced outdoor air quality, in the past 30 years, as well as indoor air pollution data and choices for things like home and business appliances that affect air quality. Per our carbon emissions, the goal is obviously to reduce burning fossil fuels. Our primary sources of greenhouse gases: electricity generation (40%), natural gas consumption in buildings (29%). We have a cleaner electric grid, but Poulson says we need to get to 0% carbon emissions from electricity usage in the equipment we buy and the vehicles we use.

He contends there are keys to eliminating emissions: cut energy waste, electrify everything to reach a 100% clean grid.  We can choose to upgrade our home appliances for households by replacing gas machines like our furnaces and our gas stoves by electrifying a household like changing out HVAC and water heaters with heat pumps and kitchen ranges with induction ranges. Per transportation: emissions can be eliminated at the tail pipe with electric vehicles, taking TRAX and electric buses or opting to walk or bike.

He reported that our national grid is getting cleaner, as solar just exceeded coal in the US grid this year, adding wind is the #1 renewable energy source in the US. The Euro union reports that 25% of electricity is coming from solar in the summer months. Utah has ‘renewable communities’ with new program this winter in 16 local governments with a goal of a net goal of 100% clean, 100% electric grid with 0 emissions. You’ll get more info in the mail from Rocky Mt. Power in the mail to sign up as an individual household.

For more info: Slc.gov/sustainability/climate-forward