2016 Utah Real Estate and Housing Market Predictions

States in the West are expecting some of the strongest 2016 Housing Market activity in the country, and Utah real estate is near the head of the pack. The government-backed mortgage loan company Freddie Mack has named Northern Utah in particular as one of the top housing markets in their 2015 year-end Multi-indicator Market Index. “Housing markets such as Salt Lake City, Provo, and Ogden have strong buyer demand and they’re also still largely affordable for the typical family looking for a median priced home,” states Len Kiefer, the company’s deputy chief economist.

Utah’s rise has not been meteoric, but the rate is impressive nonetheless. Between 2010 and 2014 Utah went from the 11th worst market in terms of the percentage of mortgage loans with negative equity to the 13th best. In the same time span, the foreclosure rate dropped from 3.3% to 1.2%. Utah has long since recovered from the recession, and all housing market predictions point to sustained growth.

Earlier this year on the “Hottest Housing Markets for 2016” published by real estate website Zillow Salt Lake City and Ogden ranked number 7 and 6, respectively. The ranking is a result of combining home value forecasts, current unemployment rates, and recent income growth. Furthermore, our own top ten rankings for the best investment real estate markets for next year and beyond listed not one but two different metropolitan areas in Utah. Utah’s economy has been coming on strong in terms of enticing hi-tech and manufacturing industries. Utah has recently been at the frontier of advanced manufacturing while also focusing on energy and information technology. Three of Utah’s cities (Salt Lake, Provo, and Ogden) made the list of “The Hottest 15 Metros for Advanced Industries” released last year from Brookings, a website devoted to independent research and policy solutions.

Check out the 2015 Utah Housing Predictor to Compare and Contrast this year’s forecast

Utah ranks as one of the top states in job growth and is holding steady with strong home prices, solid housing equity, and low default rates. However, through the first quarter of 2016 sales in the state have been down. This is due to weakening demand from a lack of inventory. There simply is not enough housing to keep up with those looking to buy. And rental prices mirror what is happening with home sales – prices keep climbing. Rental cost averages throughout the state are on par with the rest of the country, but a look at rental listings on sites such as Craigslist Salt Lake City shows that the cost for a one-bedroom apartment in a specific highly sought-after market is well above national norms. While the lower sales numbers are something that must be monitored, they are not that concerning. If sales were declining as a result of job cuts then this would be cause for alarm. Sales declining due to lack of inventory is a problem that is good and bad. High demand and low inventory is good for sellers and bad for buyers as home prices maintain or increase in value.

Utah Real Estate

Source: Zillow
Enjoy a gorgeous view of the Rocky Mountains in the Salt Lake City real estate market!

Influencing Factors for the 2016 Utah Real Estate Market

  • The Zillow Home Value Index shows that the median home value in the Utah housing market is currently $225,800. This is a 7.1% increase in the past year, and values are expected to rise another 4.8% by this time in 2017.
  • The Market Health Index for the same market is currently 8.4 out of 10. The Market Health Index shows the current health of a specific geographic location’s housing market compared to other markets across the United States. It is based on 10 or more matrices of past and present home value trends relative to, but not limited to, foreclosures, negative equity/delinquency, and the rate at which homes sell.
  • Homes currently spend an average of 92 days on the market.
  • The average rental cost in the state is $1,386, almost identical to the national average of $1,388.

Best Places to Live in Utah

The Salt Lake City real estate market had near historic growth last year, and 2016 looks to continue the trend. In 2015 there were 13,323 existing single-family homes sold in Salt Lake County. This was the highest level in ten years and the 3rd highest in the county’s history. The number of single-family homes sold last year brought in approximately $4.1 billion, a 22% year-over-year increase. With little change expected in the city’s market conditions Salt Lake looks to again be one of the top Utah real estate markets. Salt Lake City is the anchor in Utah’s advanced industry zone, and the region specializes in practically everything related to information technology and medicine. Along with positive job opportunities, Salt Lake City is also host to several cultural events, festivals, and performing arts.  Grantsville, Erda, and Stansbury Park are some of the hottest areas located in the Salt Lake area.

Some of the more valuable markets in the state are the Sandy and Park City real estate markets. The suburb of Sandy has seen a cool off as of the past year, but values still rose 6.4% to $267,000. Park City has more of an elite housing market with median home values of $679,700. Park City relies mostly on tourism, and it is home to two major ski resorts and the nations largest independent film event, the Sundance Film Festival. Forbes Traveler Magazine has named Park City as one of the 20 ‘Prettiest Towns’ in the United States. More shocking than the sticker cost is that the housing is moving at a remarkable clip. In the past year home values rose over 10%. Rental costs in both markets are some of the highest in Utah, with Sandy coming in at an average of $1,562 and Park City at a staggering $2,982.

Provo has quickly become one of the most desirable places to work, live, and raise a family in Utah. The median home value for the Provo real estate market is $205,600. This is one of the hotter markets with the home values rising 8.4% in the past year, but rental units are still modest at $1,124 on average. Once dubbed the “Next Silicon Valley” by The New Yorker, tech-savvy Provo houses two venture-backed firms worth $2 billion or more.

For those looking to stay near Salt Lake City but avoid the high price tag that comes with it need to look to West Valley City. West Valley City home values are a steal at $177,200. Like Provo, this real estate market has seen a lot of activity in the past year. Because of this, inventory problems seen throughout the state are becoming prevalent in this market as well.

Ogden real estate is one of the most affordable markets in the state. Median home values in the city are $125,500, and rental prices in the market are some of the lowest in the state at only $952. Ogden has experienced strong income growth as well as low unemployment in recent years prompting Newsweek magazine to declare Ogden a “middle-class oasis,” and data compiled from the U.S. Census shows that Ogden has the narrowest wage gap (the difference between rich and poor in terms of income) in the nation. The proximity in relation to Salt Lake City means that Ogden benefits from the influx of advanced industries. In fact, 11.3% of Ogden’s metro area employment is in advanced industry, slightly higher than Salt Lake City. This figure has been growing nearly 6% annually since the recession. As stated earlier, Ogden was ranked the number 6 housing market in the nation. But this is not the only honor that Ogden has been bestowed recently. Last year Ogden ranked number 1 on the “19 Best Cities to Start a Family” list published by DatingAdvice.com. The website determined that Ogden overachieved in all of the desirable qualities of a family-friendly city, ranging from great schools, safe neighborhoods, and transportation to entertainment and dining options. Farmington and Kaysville are some of the strongest areas in the Ogden metro area.

The city of Moab carries a median listing price of $240,000, but the reason that this is a desirable market is for its outdoor recreation and scenery. Because Moab real estate is located on the Colorado Plateau just south of the Colorado River, there are many opportunities for outdoor recreation. This includes everything from Whitewater rafting, kayaking, road biking, rock climbing, base-jumping, to hiking and backpacking. Recently Moab has experienced a large upswing of second-home owners. The mild winters and pleasant summers have attracted many people to buy land around Moab and build their own homes.

Check Out the Neighboring Competitors to the Utah Real Estate Market: