September 2022 has about the same inventory level as we had "pre-covid" September 2019. Last month I wrote that we'd watch this level and see if inventory levels continue to climb. It did.

The genuine concern was the number of SOLD homes. For September 2022, we sold 203 homes; we haven't seen lows like that since February 2016, when we sold 205 (January 2016, we sold 187 Ironically around that time, inventory hovered around 1000-1300 listed homes before going lower into 2017, then remaining around the 700-800's available homes. Remember, this is specific to "greater St George residential." I typically do not pull in Hurricane or Zion areas, so comparing past data trends is easier.

St George Utah Housing Market Report

A fall 'sold homes' decline isn't unusual for our area, but we've been on the decline for most of the year, which IS unusual. Typically, this would be catastrophic, but this was an expected correction resulting from overinflated prices created by the covid buying frenzy.  

If the red line (inventory) continues to climb and the black line (sales) continues to descend—this will force further market corrections. I suspect this will be the case, as I've said for over a year. The government's efforts to reduce inflation (housing prices) are working…but there is concern that their efforts may do more than "correct" and may very well cause a significant fracture of the fragile real estate market. Our prices are STILL on the higher side, so the real question is, what will be the stabilizing point? Will we go back to pre-covid sale prices, or will we see prices drop further than those averages?

Sold Homes St George Utah Market Conditions

The number of SOLD listings comparing 2019 with 2022 shows we are down around 27-39% since May. But, it's interesting to note that the Median Sale price has been UP over 70% in the past few months. A concern I see—if prices are up 75% since 2019---and we get back to the "pre covid" market (also 2019), what will that do? Even the excellent credit borrowers having 20% down will still be underwater. It's not going to be an issue if those buyers hold and ride out any storm—but we still aren't sure if we are going into a storm, or maybe what we just saw with prices skyrocketing WAS the storm. Perhaps a double storm is on the horizon; we are in monsoon season, after all.  

A 70+% housing increase in a short 2-year period is unheard-of. The Feds, which are currently strategically forcing lower prices and reversing our gains, may create a domino effect. Even if we resumed course on the projectile of home sale appreciation we were seeing back in 2019—which was averaging around 7% at that time. That still results in a possible 49% reduction of values for buyers who partook in the covid buying frenzy. This assumes the stabilization point is the pre-covid era of 2019.

Should you buy?

Yes, if you're going for a longer-term hold. Interest rates are still climbing and likely will continue. Yes, this will pressure the housing prices downward, but that will likely be a shorter-term loss, whereas the interest rates will probably stay high for a longer period. Higher rates will likely average out any equity loss at some point; housing prices will forever be a moving target and always a safer investment. If you're buying long-term or your "forever" home, as long as you're comfortable with the payments, we'll just ride the storm out as we've always done in real estate. Right now, we have more inventory, and our sellers are more flexible with terms; this is what buyers have been waiting for these past couple of years.

If you have one, stop charging money on your HELOC, and work on paying that down. Don't close the account; having a HELOC as a backup is smart financial security. Rising rates will impact HELOC's and cause higher payments. Work on your 6+ month saving plan to help ride out the possible storm. 

Investors---get ready, storm chasers.

Paula Smith RealtyPath St George


I am Paula Smith, Associate Broker with RealtyPath of St George. I have been a licensed, full-time real estate agent in Southern Utah since 2006.  I have been selling residential real estate during all of the changes in the market and witnessing our St George area become one of the fastest-growing cities in America. I keep my finger on the pulse, paying attention to market conditions. If you're ready to buy or sell, I'm ready to make it happen.

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