For the past several years, we’ve seen our real estate market go up and up and up, but lately, things have cooled off a bit. Prices are softening—not as many buyers are inquiring about our listings, and we’re not seeing as many showings happening.
The good news is that this is nothing to worry about. The housing market goes in cycles that typically last seven to 10 years. When interest rates rise and prices go up, these factors essentially make the housing market adjust.
“
Unlike other parts of the country, our job rate isn’t going down, and we still have a lot of people moving here.
”
In our case, it’s not a housing availability issue—it’s an affordability issue. Home prices and interest rates have risen so quickly that it’s made homes unaffordable for many people. We’ve also heard new construction builders say they won’t be building as many homes above $500,000.
Our local economy, however, is still doing fantastic. Unlike other parts of the country, our job rate isn’t going down, and we still have a lot of people moving here. This shift is nothing to be scared of, but it’s still something to keep in mind moving forward.
If you have any more questions about our Salt Lake City market or you’re thinking of buying or selling a home, don’t hesitate to reach out to me. I’d love to help you.
Is history repeating itself?
Right now, some people are worried about the state of our market. People are afraid that the extensive, fast growth we’ve seen over time is going to lead to the market bottoming out.
I’ve witnessed some truly heartbreaking transactions in the past. I have even seen sellers weep at the closing table. But, is our market as scary as some think?
Well, I look at a large quantity of information pertaining to real estate each and every day. There are so many economic factors that drive our market, and all of these factors are ones I closely examine all the time.
“
The bottom line is that our current real estate market is still going strong.
”
It is these same factors, which can cause issues, that can also cause a great deal of growth and opportunity. So if you’re concerned about our market, you may want to consider a few factors. Our market is not the same as it has been in the past.
Current interest rates are phenomenal and lenders are being picky—they are making sure that buyers are truly responsible enough to move forward in a transaction.
Another factor that is different about today’s market is that we’re seeing much more dynamic job growth these days. People are coming to our city for our jobs, culture, and amenities. The bottom line is that our current real estate market is still going strong. We are definitely in a healthy market.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
How has our Utah market done so far this year? What can we expect from it moving forward throughout the rest of 2017?
You may hear many different things about our market, but this update focuses on both its current state and how it compares to the rest of the nation on a year-to-date scale. To make this comparison, I used data from many different sources, including CoreLogic, the National Association of Realtors, Realtor.com, and our local MLS.
According to CoreLogic, our national market is anticipated to rise 6.7% by the end of the year. Year to date, it’s already risen 5.8%. This increase doesn’t mean what you might think it does for your home’s value, though, because CoreLogic takes into account average price points for the market. More specifically, the price range they used to calculate this increase was from $262,000 to $263,000.
When we talk about certain numbers regarding appreciation and growth, how they apply to your home’s value depends on its location, size, price range, and the four rules of real estate we’ve discussed before—curb appeal, kitchens, baths, and amenities.
From a national perspective, we have a very good market that’s seeing growth. If we scale it back to our local market, we find that Utah as a whole has gone up 10.7% over the last year. The Salt Lake metro area itself has gone up 8.8%. The only other state that’s experienced higher growth so far is Washington at 12.7%.
What makes our Utah economy so much different? People are moving here, staying here, and values are going up.
Nationwide, the average days on market for a home is lower than in Utah, but in our local market, inventory levels aren’t supporting the number of buyers. At this time last year, we had more home sales nationally than we do now. To quote Lawrence Yun, chief economist of the National Association of Realtors, “Lower-priced listings continue to be scooped up, but severe shortages are keeping many buyers on the sidelines.”
Basically, people get frustrated when they can’t find the home they want or they feel like it’s unattainable. As more buyers shy away, this means more opportunity for listings and builder inventory continues to be very strong.
Utah is the No. 1 destination for millennials. We were also ranked in the top 10 as far as the most employed states in the nation. On a national level, the unemployment rate is right around 4.9%. Locally, we’re at 2.9%. There are a few reasons for this gap, the foremost of which is we have one of the highest job-growth markets.
Our team has closed more than 130 transactions so far this year, and the average price point for all those homes is around $282,000. Inventory levels are low compared to where they have been because large portions of it have been bought up, which has caused values to go up.
“
People are moving here, staying here, and values are going up.
”
Interest rates, though, are still at a historic low, which brings up an important point—the terms of the market are just as valuable as the price of the property. Based on our current interest rates, properties are very affordable to the average income earner. In fact, it’s more affordable to buy a home than it is to rent—the percentage of income needed to afford median rent is at 29.2%, while the percentage of income needed to afford a median home is only 15. 8%.
If you’re in the market for a home, consider the following options.
First, use the link above that lets you search all homes for sale in your zip code so you can get a sense of appreciation rates in your area and what’s happening on a per-zip code basis.
Second, if you don’t own a home and are considering buying, think hard about taking advantage of these extremely low interest rates. Sometimes we hear about historic low interest rates but fail to see the value in them, but because they’re so low in relation to home values, they’re making those same homes more affordable.
The market could correct at any time, and you’re more likely to see that affect other parts of the country because they don’t have the economic growth we do and they don’t have the jobs we do. The stimulus we’re seeing and the amount of migration we’re experiencing make us different. Barring significant changes, we’ll continue to grow.
You can see the changes to accommodate housing right here in Salt Lake city. There are 350 square foot micro-units being built downtown because there isn’t enough inventory. There are also 65-acre developments being built in Spanish Fork. In short, we’re one of the best places in the country to live.
If you have any questions about our year-to-date market or you’re thinking of buying or selling a home, please don’t hesitate to reach out to me. I look forward to talking to you soon.
Should you wait to purchase a property or take advantage of the current market? I’ll go over the latest market trends you should know in order to make the best decision for you and your family.
Should you wait to purchase a property or should you take advantage of the current market? There are a few market trends that you should be aware of before you make this decision.
2016 had the strongest home prices that we’ve seen in a decade, with the average single-family home price of $295,000. Taking inflation into account, the average price in 2007 would have been around $290,000, so we have gone above and beyond that number.
As a result, some people feel like the housing market might be heading toward another bubble. However, there are three reasons why we are not approaching a new housing bubble:
Our population is growing quickly. Our city has one of the fastest growing populations in the country.
We are in the top five for employment and job growth.
The number of people moving into our state is up. Five years ago, we only had 2,000 to 4,000 people migrating to Utah from other states. Last year, 24,000 people moved in from out of state.
So, not only do we have strong growth, we also have strong demand and insufficient supply. Last year at this time, there were only 3,000 homes on the market. Right now, there are only 1,800 homes on the market, which puts pressure on pricing and causes prices to go up.
“
We are not heading towards another housing bubble.
”
If you are thinking of buying a home, now is a good time to take advantage of a low interest rate and purchase a home. You can even make a lateral move; maybe the home you want isn’t priced much higher than your current home’s value. You don’t have to take on more debt, but you can get into the home you want if that makes sense for you.
If you have any other real estate questions or if you would like help in your home search, give me a call or send me an email. I would be happy to help you!
Today, I want to go over the fall forecast and what you can expect from the Salt Lake City market moving forward.
As you've probably heard, interest rates are going to stay where they're at - they're not going to get any better. This makes now a great time to lock in a low rate and save in the long term.
On the inventory side of things, we've seen a rise of about a half of a percent. At the same time, we're about half a percent down in the homes under contract category. These stats simply mean that there is a tiny bit of surplus of available homes.
Overall, current conditions make right now a great time to move up. When a market is super hot, fantastic interest rates and a higher inventory mean that you have a great opportunity to find the perfect home. You will have more time to view homes because there is less competition in the market. Especially if you're looking to get a deal done by the end of the year, now is the time to start the process.
Simply put, there are plenty of buyers out there and plenty of homes to choose from right now. If you would like to take advantage of this very strong market, don't hesitate to reach out to us. We would love to hear from you!
Today, we want to share a quick market update with you, so you don't miss out on a hot spring market in Salt Lake City. Right now, we have just under 3,400 homes on the market. Last year at this time, we had almost 3,900 homes on the market! The difference in terms of homes under contract is 1,700 last year, and 2,200 hundred this year! What does all of this mean for you?
Real estate, like most industries, is a matter of supply of demand. Currently, we're seeing less homes on the market, and a lot going under contract. If you're on the fence about selling your home, now may be the time to consider putting your home on the market. As always, you need to get it ready to go and ready to show. We have a 75-point photography checklist, a professional stager, and good relationships with inspectors, all of which will help position your home to get top dollar.
If you're thinking about buying or selling real estate in this active market, give us a call or shoot us an email. We would love to help you make the most of the positive market trends we're seeing in Salt Lake City.
Today I am going to be updating you on the state of the Salt Lake City real estate market, as forecasted by economists in the Salt Lake Housing Forecast for 2015.
If you'd like the full report please just ask me for it and I'd be glad
to share it with you, but here is a break-down just for you:
Mortgage interest rates are absolutely fantastic right now. Most
rates are falling under 4% right now, and this means that you're
affordability when buying a home is very high. However, these rates are
expected to rise by the end of 2015, and some experts are estimating
that they could rise to the vicinity of 5.5%.
Appreciation in Salt Lake City is expected to be right around 4%.
If you have a $300K home and want to move into a $400K home, you could
do so very easily when you account for 4% appreciation over a year and
also interest rates that are at all-time lows.
If you are looking at buying or selling in this market, please
don't hesitate to contact me. Now is a great time to buy, but it's also a
great time to sell because we think this high affordability will push a
lot of first-time home buyers out into the market this year.
