Most everyone agrees that the real estate “rebound” is in full swing, and has been for some time. But, as the experts say, real estate is local, and just as the bust affected each region differently, so has the rebound.
The chart below represents how home prices have changed over the last 3 years, comparing Utah to the rest of the country.
What does this mean?
Here are several takeaways from this information:
· Nationally, rates of home appreciation have returned to close to normal – The 100-yr average of real estate appreciation is 3.5%. The country is currently just under 4%, and while some areas are still exploding (parts of California, Florida, etc.), overall, things have “calmed down”.
· Utah is still charging hard – Utah is experiencing real growth (people are moving to the state and those that are here are having kids!). There is a real demand for housing and that demand continues to drive up the price of real estate.
· What happened in 2014? – The drop in home values in 2014 is surprising. This could be due to a simple correction (of overly-optimistic pricing in previous years), timing of new homes being built, etc. Most importantly, though real estate tends to increase in value, it’s not an unwavering trend (and this is just a 3-yr sample).
Not all of Utah is created equal
As a further example of real estate is local, below is the same chart, comparing just Salt Lake City, Provo, and Ogden:
Key Takeaways:
· Along the Wasatch Front, Utah County continues to outpace other counties – Though the rate of growth has evened out, Utah county continues to be a hotbed for tech companies and other startups.
· Salt Lake faltered, but came roaring back – With almost a 9% drop in home values in 2014, Salt Lake saw the steepest rebound in 2015, proof that the most populated city is still a favored destination.
· Ogden is the least volatile – Home prices remain affordable, even though Ogden has had the highest average 3-yr rate of growth amongst these 3 cities.
In a nutshell:
Utah’s true growth makes its real estate a solid long-term investment. But, that also means that if you’re thinking about buying, homes will likely be 7% more expensive a year from now, so act fast (if prudent)!
