Everyone likes a deal. I handed a crisp twenty dollar bill to the cashier for my six year old’s toy. In return, the cashier gave me multiple smaller bills back as change. In shock, my little guy whispers to me in surprise, “Dad, they gave you back more monies than you gave them!”
Wouldn’t that be nice.
Yet, what many Utahn’s do not know is that more people will be cashing in on Utah in a big way. They feel like they are getting more than they bargained for. They see our market as one that provides opportunity, growth, and a great place to live. Nowadays, many locals feel prices are getting too high or they cannot continue at this pace. With 4 Utah Cities making Money Magazines Top 100 Places to Live in America you can expect more growth, more jobs and more people looking to live in the Beehive State.
Here are 10 facts to expect in 2018:
Continued Job Growth. We had a net increase of over 37,000 jobs last year. Expect more jobs but with moderate growth per the tight labor market.
Housing Values Are Anticipated to Increase 7% to 9%. Economist James Wood reported to the Salt Lake Board of Realtors that prices will increase with median sales prices as high as $325,000.
Millennials Likely to Be Our #1 Buyers. Salt Lake City has the 2nd largest population of millennial’s in the nation. Expect them to be first time home buyers this year.
Interest Rates Anticipated to Increase to 4.5%-5%. Year end rates were estimated by Mortgage Bankers association at 4.6%, National Association of Realtors at 4.5%, Freddie mac at 4.6%, Core Logic at 4.7%, and Realtor.com at 5%.
Expect More People: The Kem Gardner Policy Institute reported, “Utah’s population surpassed the three million milestone in 2016. Utah is currently the third fastest in population growth in the nation at 1.9 percent (behind Idaho and Nevada). Net inmigration of almost 27,000 in 2017 was the most since 2006 and contributed to 46 percent of the state’s total population growth. ”
Housing Affordability Will Be A Challenge. The Housing Opportunity Index measures the median household income. Homes affordable to the median income owners are currently at 59% in our market. Median Income buyers can still afford homes. As the median price increase more pressure will be put on buyers.
Housing Supply Challenges: More jobs coming into the state and more people will put pressure on housing needs . Wood reported there are more households than housing units available. Hence, an increase in values per supply and demand.
Labor Challenges: Labor shortages are slowing the building necessary to sustain our growth. Jeff Southward, president of the UVHBA board reported to the Daily Herald, “when the Great Recession hit the nation, many qualified laborers and construction professionals left the industry, and they haven’t come back.”
We Are a Strong Preferred Secondary Market: More investors are finding higher yields, value add opportunities, and affordable pricing locally compared to parts of the nation. As reported at the NAIOP Commercial Symposium, there is a record amount of investment capital in the Utah Market and will continue to come in. One commercial property received 112 offers – 75% of the offers were from out of state buyers! Currently there is more money available than deals to buy.
Supply Bottleneck For Building: Per high land prices, increased materials costs, and shortage of labor will impact the number of homes built. Building will take longer and cost more.
In the end, we are the #3 market to watch in the country. I am excited about this year. If you are looking at buying or selling this year caution is recommended. Let us take the emotional buying part out and help make the best financial decision. Let’s be smart, calculated, and treat any purchase as an investment.