2014 Salt Lake County Housing Forecast
At the end of January, I had the opportunity to attend the 2014 Salt Lake County Housing Forecast Breakfast presented by the Salt Lake Board of Realtors. This was my third year in attendance and, while not as promising as last year's forecast, this year still looks great. This year's report was prepared and presented by James Wood, Director of the Beaureau of Economic and Business Research at the Univeristy of Utah (GO UTES!).
The overall consensus is that Salt Lake County will see a projected 5-7% increase in value, while sales should increase about 7%. These numbers are right in-line with those of a healthy market. I will detail a few things that justifies this predicition. Keep in mind, however, that this prediction is a county-wide forecast. Different areas (e.g., Sugarhouse, Downtown, Sandy, etc.) will experience different results due to different supply and demand constraints in those areas.
In 2013, the sale of single-family homes rose 5% from 2012. The total number of homes sold was 11,686 up from 11,062 a year ago. This tells me two things: First, that buyers are continuing to be confident that the market isn't over-priced; Second, that there is continued demand for housing. This translates to an estimate 7% increase in the amount of sales in 2013.
That being said, the lack of supply will continue to steer this number. If there aren't enough houses on the market for the demand, prices will continue to rise. One interesting statistic that I came away with was that the number of "under water" mortgages (homeowners who owe more on their house than it is worth) has decreased from 1 out of 5 (in 2012) to 1 out of 12.5. This allows sellers to sell and buyers to buy. There are still more buyers than sellers and 2014 will continue to be a seller's market.
Utah's Economic Growth:
In 2013, Utah's economy experienced an increase of 40,000 jobs and had an unemployment rate of less than five percent. Utah ranks fourth in the nation in relative job growth. There are companies relocating to Utah (Adobe, EA, etc.) and there is an increased demand for qualified workers. More workers relocating to Utah means a greater need for housing. A greater need for housing means an increase in value because more buyers are competing for those houses that are on the market.
One sidenote is the prediction from the National Association of Realtors that interest rates should rise throughout the year. Though, they aren't expected to rise much above 5.5%. This is still about 3% less than what rates were at the begining of the 21st century. These rising rates will have an effect on buying power, but not to a great degree.
As mentioned before, Salt Lake should see a 5-7% increase in home values and a 7% increase in the number of sales as compared to 2013. The amount of new buyers entering the market, new buyers relocating to Salt Lake, and the still-limited supply of housing will cause an increase in price and activity.
However, every area in Salt Lake will be different; this was a county-wide prediction. For a detailed analysis on how the market will affect your home, please contact me using the information below. As always, if you are looking for properties, please visit SmallLakeCity.com to have a look at what is currently on the market.
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