5 Reasons why i see stable growth in the Salt Lake City market over the next few years.

4 Replies

I Just wanted to see if anyone had a differing opinion than me on housing stability outlook.. 

That being said, here are a few reasons I see some stable growth, here in Utah & Salt lake county specifically, but also across the nation. 

1.The Median home prices have typically appreciated at 4% per year, out pacing inflation (most of the time) we saw higher than avg growth starting in 03-07. The recession obviously corrected the market and the Trend of appreciation I believe has reset (green line) This being said we are still 17% short of where we should be (missing 5 years of appreciation does that) However, I believe that we should begin to see somewhat stable growth in the future. 

2.( this is specifically for my county) we typically see a year over year change in prices around 4% and that is about where we are back to as of 7-1-15. With a lack of inventory currently, there is upward pressure of pricing. 

3. Interest rates make housing much more affordable. 

4. They aren't giving money away for residential. This ensures that if people are getting a 30 yr mortgage, they can actually AFFORD it! 

And finally, #5. there are two types of buyers in the world, Landlords and Owner Occupants. When You can rent for what you could own for, That is scary. As long as you can purchase a house with 20% down, and have it cash flow well, the housing market will be very stable. 

To Wrap up... We may experience highs and lows, but I believe that as a whole, the nation has learned their lesson not to over leverage ourselves.  What do you think #BPNation ? 

 @Jordy Clark :

Interesting post. Couple of items 

  • I love seeing data, however, the slides are difficult to see. Are they available as attachments or in a different format? Or am I missing something simple to be able to view larger? 
  • Interest rates are going to have to go up in the future. My personal opinion is they have been kept artificially low and as they start to trend up appreciation will tend to flatten out or put downward pressure on home prices to keep affordability in-line. 
Originally posted by @Charles Knudsen :
 @Jordy Clark:

Interesting post. Couple of items 

  • I love seeing data, however, the slides are difficult to see. Are they available as attachments or in a different format? Or am I missing something simple to be able to view larger? 
  • Interest rates are going to have to go up in the future. My personal opinion is they have been kept artificially low and as they start to trend up appreciation will tend to flatten out or put downward pressure on home prices to keep affordability in-line. 

 PM me and id be more than happy to shoot you the slides. 

Interest rates are going to rise, no doubt about that, but they wont go up more than .5% /yr at most. I do think it will slow the appreciation rate, but i think we will go at a rate of 5% appreciation in salt lake and utah counties for the next while. Especially if inventory remains low. 

Interesting post Jordy and thanks for the info.  Good or bad, I am more of a "seat of your pants" kind of guy.  I am guessing that there will be some downward pressure as buyers thin out a bit and rates creep up, but the SLC market needs that IMO.  Probably this winter just as I have 3 rehabs that will near completion in late fall.  :)  Actually the market needs a bit of a slow down in SLC IMO.  If I represented buyers right now I would be exhausted.