National Market is Mixed, but What’s Happening in Salt Lake City?
When should I buy real estate?
This is, perhaps, the # 1 question we get here at Utah Cribs. Unfortunately, there is no perfect answer. The “right time to buy” depends on each buyers current situation. At the close of 2016 we find ourselves once again making a lot of predictions about what the future may hold. I have recently read articles that firmly assert we are currently in another housing bubble. I’ve then turned on the TV and heard news casts that state we are seeing a robust real estate market, with no signs of a downturn. With all the conflicting information coming from all sources of news, which regrettably include Social Media, let me shed some light on Salt Lake City’s real estate market by giving you some facts. (not opinions)
Rents are still rising in Salt Lake City
In a Nov 1st article by Business Insider they did an in-depth look at rental rates with most of their date from Zumper and Zollow. In many luxury rental markets we are seeing year over year declines in rental rates. There are many reasons for this: new product (lots of inventory), price ceiling, and many potential renters are choosing to buy instead. Salt Lake City, which is not considered a luxury market for rental, saw a 12% year over year increase in rental rates for a 1 bedroom apartment. That’s one of the biggest jumps in the nation and yet we are still only the 53rd most expensive rental market in the nation. So will rental rates decrease in Salt Lake City? Probably not.
Interest Rates are Going Up
Yeah, you’ve heard about it for years. Ask any expert around, rates are going up, they already have. For a in-depth, trusted, and current read on this take it from the best expert I know, Josh Mettle. Or you can just take it from me, rates are going up. Read Josh’s thoughts on this here: http://utahcribs.com/blog/market-overview/interest-rates-moving-higher-will-continue/
More Homes are selling, and SLC pricing is still increasing
In Oct of 2016 in SLC 1077 single family homes sold. That’s up 2.6% over last year (which 2015 was still a great year for SLC real estate). Median price for a single family home in Oct 2016 was $298K up 10.4% over same time last year. Will appreciation still continue? Well, we still have under 3 months’ supply of housing in Salt Lake County.
Even if we take the most pessimistic look in Salt Lake City, we are still likely to see appreciation in median home values in 2017, even if appreciation slows. We are for sure going to see interest rates rise from 30 year lows. We will also likely see rental rates rise.
So, should you buy? Do you care about saving money? Then yes, you should buy.
I know there is a more pessimistic view out there, I can often have the same view if I listen to others opinions, read social media, and don’t pay attention to the real facts. The fact of the matter is even if we are in another real estate bubble nationally you will not see things “burst” or even get cheaper in the near future here in Salt City. Thus, waiting is what costs you money.