A Closer Look at the Crazy Numbers in Our Market

It's a crazy time in the Salt Lake real estate market, so we wanted to give you some numbers that tell the real story of home prices and appreciation.

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Recently, we talked about a few economists' take on the Salt Lake market. Today we're back to give you some more crazy numbers that are a little bit different and more interesting and paint a more complete picture of what’s really happening in our market.

For starters, let me say that it perturbs me a little bit when people talk about the 'spring market' and yearlong statistics because we're a seasonal market. If you look at our market's appreciation on a graph, you won't see the median price grow consistently in a linear way. For example, appreciation in Salt Lake last year was 8.3%, but prices peaked in June. Starting in July, prices declined all the way through to December. This means that in the spring rush, we saw prices skyrocket over 13% and then retract throughout the rest of the year.

Last year at the peak pricing time in June, we hit a median price of $275,000, and as of the end of January 2017, the median price is back up to $275,000. So what might we see over the next five months?

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If this appreciation continues, homes will get up to $10,000 pricier every 30 days.

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As many expert economists predict, we'll see 5% to 7% appreciation this year. However, based on what happened last year, it's extremely likely that we could see double-digit appreciation between now and the Fourth of July. That's crazy! That would mean the market is appreciating 2% per month.

I don't want to push you to hurry and buy a home, but if this trend continues, a home that's $300,000 today could be valued at $306,000 by March 15. Every month, its price could go up $6,000 to $10,000.

Too many buyers sit on the sidelines 'waiting for the right house to come along.' In an appreciating market, that's a real estate fallacy. The same goes for buyers who are 'waiting for a killer deal.' If you're looking at houses in the $750,000 and under price range, you can't wait for a killer deal because the best house you'll get is the house you buy the soonest in this strong seller's market.

I know this can be frustrating, but we want you to be educated with the real numbers, not some sales pitch. If you have any other questions about our market or you're looking to buy or sell a home, give us a call or send us an email today. Don't wait any longer!

What I Learned at Breakfast

Every year, a bunch of us Realtors get together at the Forecast Breakfast. There, Dr. James Wood, an economist who is also an expert on our market, shared his predictions for 2017.

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I recently had the pleasure of attending the Forecast Breakfast. Every year, a bunch of us Realtors get together, including Lawrence Yun from the National Association of Realtors.

Dr. James Wood, one of the foremost economists at the University of Utah, shared his predictions fro the 2017 Utah residential real estate market. He also went over a few important statistics from last year.

We always work hard to give you this kind of information, but sometimes it helps to hear from the experts. Here are some of the highlights from the breakfast:

Dr. Wood said that, for the first time in 40 years, the rise of households in Utah exceeds the number of new housing units. In other words, demand is really outpacing supply.

Dr. Wood also told us that apartment vacancy rates are at the lowest levels they have been in decades despite the historic boom in new construction apartments. Since 2012, we’ve added 20,000 apartment units in Salt Lake, but demand is still outpacing the supply.

With that in mind, Dr. Wood told us, “2016 was the best year for the Salt Lake County housing market in a decade when it comes to the number of sales. In Salt Lake County, just over 13,600 sales occurred.” In 2009, the typical Salt Lake area property sat on the market for an average of 80 days. In 2016, that number dropped to 13 days, which is absolute insanity!

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With market conditions like these, you need to be ready to make your move.

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When it comes to his predictions for 2017, here is a direct quote from Dr. Wood: “We can expect another 5% to 7% increase in pricing . . . These fundamentals combined with exceptionally strong demand, as well evidenced by record low days on market, will push the median sales price of single- family homes to the $310,000 to $315,000 range. It’s currently sitting at $295,000. Condominium sales should be even stronger.”

Dr. Wood continued by saying, “Overall, it’s going to be a tight market for buyers and renters. Prices are not going to come down, interest rates are not going to come down, and availability is not going to improve much. You just have to pull the trigger.”

A lot of the time when we present statistics proving that now is a good time to buy or sell, I do get comments from people who say, “Of course you’d say that; you’re a real estate salesperson!” However, everything I just told you is a direct quote from Dr. James Wood, a foremost economist on our local market.

He is really saying exactly what we would say. If you combine rapidly increasing prices with rising interest rates and super tight inventory, the best deal you will get on a house is on the house you buy the quickest. In Dr. Wood’s words, “You just have to pull the trigger.”

I know that everyone likes to shop around and wait for the right house, but you simply cannot do that in our current market. If you have any other questions about our market or would like to learn more about the buying or selling process, just give me a call or send me an email. I would be happy to help you.