Prices Are On The Rise In 2016

Prices Are On The Rise In 2016

The Salt Lake Board of Realtors® today reported 13,323 existing single-family homes were sold by Realtors® in Salt Lake County in 2015, the highest level in nine years and the third highest in the county’s history. Only the pre-recession years of 2005 and 2006 showed higher sales levels (15,317 and 15,283 respectively). Single-family homes sold in 2015 represented a value of $4.1 billion, an increase of 22 percent year-over-year.

Last year marked a milestone in the number of multifamily homes sold (condominiums, town homes and twin homes). More than 3,830 multifamily units were sold in 2015, setting an all-time sales record. The share of multifamily units sold accounted for 22 percent of all residential sales, the highest share ever. Over the past 20 years, multifamily sales have averaged 18 percent of residential sales. In 2015, the value of multifamily units sold reached $774 million, an increase of 36 percent.

Housing prices continued to increase in 2015 as the median sales price of a home climbed to $272,000, a nearly 7 percent rise compared to 2014. The median sales price of a multifamily unit increased to $189,000, an 8 percent rise year-over-year.

Despite rising home prices, for those who can qualify, housing in Salt Lake County is still relatively affordable. The median household income in Salt Lake County in 2014 was nearly $63,000. Assuming a household with median income devotes 30 percent of their income to a mortgage payment (including taxes and insurance) that household could carry a mortgage of about $290,000. In 2015, roughly 56 percent of single-family homes sold in the county were priced under $290,000.

“There is still room for moderate house-price increases provided mortgage rate increases are gradual,” said Cheryl Acker, president of the Salt Lake Board of Realtors®. “In Salt Lake County, housing prices over the past 15 years have increased at about 1.8 percent annually in inflation-adjusted dollars.”

Mortgage rate forecasts for 2016 from a consensus of economists predict rates moving between 4 and 5 percent with a firm ceiling at 5 percent. Home buyers this year will continue to enjoy some of the lowest mortgage rates in the past 45 years.

For 2016, the Salt Lake Board of Realtors® predicts total residential home sales (all housing types) in Salt Lake County will surpass 19,000 units sold, an 11 percent increase. With demand for housing continuing to outpace available inventory, the price of a single-family home will rise 5 to 7 percent this year to a median price of $290,000. The price of a multifamily home will increase to a median value of $205,000, an 8 to 10 percent increase.

Spencer Clawson Headshot
Phone: 801-636-8426
Dated: March 23rd 2016
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