70 Months of Appreciation
You’ve probably noticed that home prices have been increasing. Since you are reading this, you are probably well informed on the market. Nationally, this run started in May 2012 and hasn’t slowed. For 70 months we have seen an increase in median home price, year over year. This doesn’t mean that there haven’t been months that prices haven’t fallen or leveled. Salt Lake’s seasonality is typical across the nation.
Does this mean we are headed for a crash?
The previous run up of pricing was more than twice as long. Before the crash of the sub prime market, we saw 182 straight months of appreciation. From January 2002 all the way to February 2007, we averaged 6% a year. Amazing run, but the market was on performance enhancing drugs.
Will we continue to see increasing prices?
To over simplify things, the crash was caused by a drastic inflation of property values facilitated by cheap and easily accessible money. Just like steroids, sub prime mortgages pumped up the market, but were horrible for maintaining a natural, healthy existence. Current lending guidelines are tighter and interest rates are climbing. The cause of our present home pricing is simple economics: supply and demand.
What can we expect in the future?
We say this often, we don’t have a crystal ball to foretell the future. However, if you currently own a $300,000 property in Salt Lake, you can expect to see your home increase in value by $250 per day through the end of the summer. The appreciation will level off this fall and winter, but over the entire year, you should average a $50 increase in value daily. If you are currently in the market to buy a home, each week you wait for the perfect property, you lose almost $2,000 in buying power and if we get another interest rate increase happens, you lose 10s of thousands over the life of your loan. That’s just based on the median home price. The higher your price range, the more painful waiting becomes.
So, what should I do?
If you need a place to live, you should buy a home this weekend! If you are looking to sell, give us a call. Real estate is hyper local and personal. The Avenues saw a 20% increase last year, although the numbers were skewed by some spectacular remodels. Also, the subjective nature of your personal home can influence pricing. For an objective analysis on your properties value, or to get more information on a property, email us at Contact@utahcribs.com