2020 Real Estate Market Forecast
/At the beginning of each year I like to take a few minutes and talk about what the experts are predicting in our local real estate market in the coming months. Much of the information I’m sharing today come from James Wood, Ivory-Boyer Senior Fellow, Kem C. Garder Policy Institute, University of Utah as commissioned by the Salt Lake Board of Realtors. I have linked his full report at the bottom of this post.
Before we get into the outlook for the coming year, I’d like to summarize what happened in 2019. In Salt Lake County last year the number of sold single family homes was almost exactly the same as it was in 2018. The difference is only 17 units. Prices increased by 7% to a median price of $380,000.
It was expected that the double digit price increases that were seen the the previous years would not happen again, and the experts were correct. That creeping up of the median home price has made it more difficult for buyers to afford homes. Historically low interest rates have helped buyers qualify for more expensive homes, but even that has its limit. So we have seen a bit of a slowing in the increase in home prices.
I’m in my tenth year as a realtor and I’ve seen the market bottom out and increase rapidly. It’s been a period of lots of seeming volatility. If one steps back and looks at the housing market a bit more long term though, it does level out. From 1996 to 2019 prices have increased at 4.6% each year. When you look at it that way, it is growing more sustainably.
Condo and townhouse prices and sales grew more than single family homes. Because homes have become less affordable and due to shifting buyer preferences, the prices on condos and townhouses in Salt Lake County increased by 10.6% last year.
And, finally, one last statistic. in 2019 76% of properties that were listed on the MLS sold. That is much higher than the long term yearly average of 57%. So 2019 was a good year for real estate - on both sides of the buying and selling coin - prices rose more conservatively and a better percentage of homes sold.
So what is to come in 2020? According to the experts this year will continue to be a year of increasing prices. The rate of increase is, however, expected to slow further to about 5%. And the median price will increase to about $400,000. Hand in hand with that, Utah’s average pay increased by 4.4% in 2019 and is expected to remain above 4% for 2020. That will help buyers to keep up with the raising prices.
Mortgage rates are also expected to stay low. If you average the forecast among lenders it will be around 3.75% this year. For more info on 2020 mortgage rates, check out this blog post from a couple weeks ago.
To sum up, the experts are still forecasting a year of growth in the Salt Lake County real estate market. It will be more moderate than it has been in the past few years. To see all the lovely graphs and data, click on the link below to the Forecast Report.
And contact me to get started in listing your home and searching for your new one!
