Salt Lake 2017 Housing Forecast
On February 3 Lawrence Yun, chief economist for the National Association of Realtors®, and James Wood, Ivory-Boyer senior fellow at the Kem C. Gardner Policy Institute of the University of Utah, presented the 2017 Salt Lake Housing Forecast report. This detailed report gives clarity to many questions we all have about the coming market in 2017. What does this year hold? Is there a pricing bubble? Will the market continue to rise or will housing appreciation slow or drop?
Here are some of the highlights of the forecast:
Highlights from last year
- $295,000 median sales price for a single family home, an
increase of 8.1 percent.
13 days for median cumulative days on market (CDOM), a
record low CDOM for single-family homes.
- 13,600 single-family sales, an increase of 1.3 percent – the highest level in 10 years
The number of underwater homeowners in Utah drops from a high of 21% in 2010 to 2% in 2016
Notable considerations for 2017
- No housing bubble for Salt Lake. One of the factors that indicate a housing bubble is affordability (or lack thereof). Prior to 2008 (the great recession) Wells Fargo housing opportunity index stood at 30 (50 or greater is considered a healthy and sustainable market). This indicated that the housing market had become untethered from household income. Today the Wells Fargo housing opportunity index stands at 70. Well above the healthy line.
- Housing shortage will continue to put upward pressure on home values. In 2016 the cumulative days on the market (how long a home sits ‘for sale’ before accepting an offer from a buyer) was only 13 days!! Even with new construction homes, there just isn’t enough property out there for the demand.
- More millenials will move into homeownership
- Mortgage rates will tick up
- Affordability will decline
The overall picture for the Wasatch Front looks very promising for 2017. The economic forecasters are expecting a 5-7% increase in home values over the course of the year.
I highly encourage you to check out the complete report for more details on the bullet points noted here.
Housing forecast and information from Salt Lake Board of Realtors