Utah is a busy, beautiful, lively, and peaceful place to live. It has mountains, lakes, deserts, and is home to the greatest snow on earth. Don’t forget about its low crime rate and low cost of living. It’s no wonder that its population is ever increasing. Utah is expected to reach over 3.21 million people this year and is projected to reach 6.84 million by 2060; that’s more than double within the next 30 years.
While speaking at the “CBRE 2019 Market Forecast, Darin Mellott, CBRE Director of America’s Research, said Salt Lake City’s economic position is “relatively positive” compared to other regional metropolitan areas. He pointed to strong employment and high demand in the real estate market among the reasons for optimism in the coming months.” (Lee) CBRE is a Los Angeles based, worldwide, commercial real estate and investment firm, with an office in Salt Lake City.
CBRE’s Chairman of America’s Research and Senior Economic Adviser, Spencer Levy, advised that economies predictably flow in cycles. “We’ve been predicting that the next recession is two years away for the last five years,” Levy stated. “The economy has outperformed from a resiliency standpoint that has surprised most economists in the world.”
Lawrence Yun, Chief Economist at the National Association of Realtors®, while presenting his 2019 Housing and Economic Forecast at the NAR’s REALTORS® Conference & Expo in November, expressed that “The current market conditions are fundamentally different than what we were experiencing before the recession 10 years ago… Most states are reporting stable or strong market conditions, housing starts are under-producing instead of over-producing and we are seeing historically low foreclosure levels, indicating that people are living within their means and not purchasing homes they cannot afford. This is a stronger, more stable market compared to the loosely regulated market leading up to the bust.”
While Yun expects a slight 1% increase in growth in 2019 with more in 2020, Freddie Mac gave similar reports in their forecast report in October. “We expect total home sales to decrease 0.9 percent to 6.07 million in 2018 and then regain momentum, increasing 1.8 percent to 6.18 million in 2019 and increasing 1.1 percent to 6.25 million in 2020.” The National Association of Realtors is expecting the average interest rate on a 30-year fixed-rate mortgage to increase from 4.6% to 5.3% in 2019 and 5.5% in 2020. However, these rates will be sustainable with housing affordability remaining positive.
Utah’s economy is doing very well. The unemployment rate for Salt Lake County is currently 3.1%, with the state of Utah having an overall rate of just 3.2%. Utah is experiencing a tremendous amount of growth due to new startup businesses, businesses relocating to Utah, and the booming of Silicone Slopes. This growth is increasing the demand in commercial and residential real estate and attracting large numbers of people to Utah. Added to the unique demographic Utah already has of larger than average size families with, on average, 3.4 children per family, versus the national average of 1.8 to 2.1 – depending on the source, there is a definite need for additional housing in Utah. These factors are all positive indicators of Utah’s economy and housing market through 2019.
“This type of activity in the economy should support the housing market, even as interest rates rise,” Yun declared.
If you are looking to enter the real estate market, whether for residential or commercial, contact us! We’d love to help you reach your goals this year!
Nelson, Brenda. Nov. 30, 2018. “Examining the 2019 real estate forecast”. Blog post. Standard-Examiner. https://www.standard.net/lifestyle/home_and_family/column-examining-the-real-estate-forecast/article_15b079c3-30c1-51d2-923e-0abd324c92c6.html
Lee, Jason. Nov. 28, 2018. “Happy New Year: Utah’s economic outlook positive heading into 2019, analysts say.” Blog Post. Deseret News. https://www.deseretnews.com/article/900044264/happy-new-year-utahs-economic-outlook-positive-heading-into-2019-analysts-say.html
*Graphs provided by Movoto.
As you can see from the Market Snapshot, there are currently more houses on the market, with a higher median list price, and listed for fewer days, on average, than there were at this time last year. The homes are also, on average, listed for a 10% higher price per square foot rate than last year.