Once again, 2018 brought a lot of growth to the Salt Lake City area. Most experts expect that our area will continue to grow in just about every way. With a secure economy, new inventory entering the market, and a steady increase in home values, it’s no surprise that Salt Lake’s real estate outlook for this year is nice and bright.
#1. Utah is Growing, and Newcomers Want Homes
People from all over the country are being drawn to Salt Lake City—in fact, Utah is leading the country in population growth. The city’s economy is thriving and we’re adding jobs at a rapid pace, and our unemployment rate reflects that. The unemployment rate is currently 3.2%, while the national average is nearly 3.9%. People have good jobs (many of them in our burgeoning tech industry), and they want to buy homes to go with those jobs. This is keeping the demand for homes high.
#2. Inventory is Surging, but Home Prices Aren’t Dropping
Multiple factors have caused Utah’s housing shortage. We’re finally seeing an increase in home construction and more inventory hitting the market, but it’s not making homes more affordable for buyers. Part of this is that construction costs continue to rise—this includes everything from the skilled labor needed to build a home to the price of materials.
The end of 2018 also saw more homes in general on the market than we’ve seen in recent months. This should make it easier to find a home if you’re wanting to buy.
#3. The Market is A Little More Balanced
The affordable starter home has been elusive over the past few years. Lack of inventory has been the major cause, and the market has been skewed in sellers’ favor. Lower percentage rates enticed homeowners to refinance and stay put. With millennials growing up and getting better jobs, they’re ready to buy, and supply just hasn’t kept up with the demand.
The good news if you’re looking to buy in 2019? The market is beginning to see a balance between buyers and sellers, according to Fox13. While home prices continue to steadily rise, there are fewer offers on homes and it might be a little easier for buyers to find something than it has been. Also, homes aren’t moving quite as quickly.
#4. Home Values Are Increasing at a Slower Rate
However, home prices aren’t projected to increase as much in 2019 as they have in recent years. The 1-year forecast, according to Zillow, is 7.8%.
#5. Mortgage Rates
Mortgage rates will likely continue to rise in 2019. They’ve climbed steadily for the past two years, and nobody expects that to change anytime soon.
Nearly all major housing authorities agree that rates will climb to above 5% in 2019. While rates are still historically low, if you’re thinking of buying, it might be smart to do it before rates go any higher and limit your purchasing power. They’ll be between 5.0% and 5.5% for most of the year, according to the experts.