You’ve heard us say it before... “No one can really predict exactly what is going to happen in the real estate market..” But, you can look at historical data, talk with trusted experts, and keep up-to-date on current local trends. And that’s where we come in :) We check out the stats, we interpret the stats, and then we share our information with you. You’re welcome.
Last week we were guests at the Salt Lake Board of Realtors 2018 Housing Forecast breakfast. We had the privilege of listening to Jim Wood, who is the Ivory-Boyer Senior Fellow at The Policy Institute at the University of Utah. Basically his role is to research, analyze, and comment on the housing, construction, and real estate industries, as well as the Utah economy.
Here are our top takeaways from the meeting:
- House prices are expected to rise
It’s no surprise that that strong demand for housing in Utah has driven home prices up for the past couple of years. Just how much have prices gone up? Quite a bit actually. The median sales price for a home in Salt Lake county has risen 50% since 2011.
And we can expect this upward trend to continue. Home prices are expected to rise in 2018... although we don’t expect to see the double-digit increase we have in the past. It’s likely prices will increase between 7-9%. This is good news for homeowners who can enjoy a little more equity. It’s also good news if you’re looking to sell. Higher prices translates into top dollar for that property.
- Townhomes and Condominiums are, and will continue to be, a super hot market
2017 was the best year ever for multifamily units with sales topping one billion. The steep rise is most likely due to the increased demand for affordable housing options. Townhomes and condominiums seem to be especially popular among millennials who are eager to enter the market as first-time homebuyers.
You can expect this market to stay super hot through 2018 because it’s not showing any signs of slowing down.
- Affordability will continue to be an issue to watch in 2018
We’ve been told for months that mortgage rates are on the rise, and while no one knows exactly by how much or when, it’s been estimated that rates will probably end up somewhere between 4.5% - 5% in 2018.
We pay special interest to mortgage rates because every 1% the rate rises, your buying power is affected 10%. That’s why you’re hearing so much about interest rates lately. The past couple of years we’ve seen mortgage interest rates at historical lows, which has been great for the housing market.
Rates below 5% in 2018 would preserve favorable housing affordability for another year. So, if you’ve been thinking of buying your first home, a move-up home, downsizing, or buying an investment property, now is the time to get serious about those homeownership goals. Because lower mortgage rates maximize your ability to buy a better home with more affordable payments.
So there's the scoop. If you have further questions about the state of the market or if you think 2018 is the year to make your dream of home ownership into reality, we’d love to talk to you. Call a member of the BHURDinUtah team today and we’ll work with you to get you on the track to your new home.