In 2006, Salt Lake City screamed to the top of the national appreciation list as values rose by about 20%. On the heals of this national exposure, several recent reports promote the area as remaining undervalued. Is it undervalued? Is it still a good real estate investor buy?
According to weekly data compiled for over 12,000 cities by Signil, the median asking price of a single family home in Salt Lake City is hovering right around $315,000. The Wage Adjusted Median Home Price falls significantly below the actual median at only $267,000. The local wage adjusted median home price is an adjusted median price calculation based on a ratio of the national to local median wages multiplied by the national median property value. It is used as a quick glimpse into the affordability and the future appreciation potential of local real estate markets. In Salt Lake City, it appears that real estate values have pushed toward the upper end of their current appreciation potential.
Weekly performance data for the Salt Lake City area further confirms a possible ceiling has been hit as the past six months suggest a steady rise in supply and relatively flat real estate values in both the median and higher price points. The increase in supply suggests that local building has caught up with demand neutralizing last year's imbalance.
Real estate investors that bought in strategic zip codes in Salt Lake City beginning in the middle of 2005 through the second and even third quarter of 2006 have done well and will likely continue to experience lower vacancy and relatively easy selling options. Rents have not kept pace with climbing real estate prices and, as a result, this weeks Cash Flow Rank on InvestorLINX slides to a low 78 out of the top 89 national metro areas.
Flat appreciation week over week, high real estate prices and lagging rent increases suggest however, that real estate investors thinking it's time to jump in now may be in for an unwelcome awakening.
About Signil: Signil offers InvestorLINX, an online market research site specifically designed to help real estate investors pick the best places to invest whether locally or nationwide. Weekly data updates, zip code mapping and easy to use ranking systems equip investors with the pinpoint data needed to invest for the highest returns. Real estate professionals should help their clients make more money and invest wisely by subscribing and gaining access to the monthly HOT SPOT Reports covering the best and worst by investment locations by zip code, nationwide - vacancy, migration, supply, demand, appreciation and absorption.
The Market Research Team
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