Utah Real Estate Market Continues to be Strong

All the recent talk of a bubble and the cooling off of the markets on left and right coasts seems to have only strengthened the local market for Utah. Many of the people selling in the coastal regions are moving inland, away from the natural disasters and high cost of living and realizing how beautiful a place like Utah really is. And real estate is local and is effected by local factors as much as by general factors, such as interest rates.

Here’s the most recent story about the Utah market from the Salt Lake Tribune. They mention that some areas have appreciated more than 40% during the last twelve months, but don’t let that fool you into thinking that the market is headed for a bubble. It’s not- and here are some reasons why:

First, the Utah market is not only appreciating- it’s correcting from the last few years of being flat while the rest of the country went up in value.

Secondly, being undervalued has brought in some investors, but most of the homes are being sold to homeowners. When markets get too many investors buying and flipping properties, like what’s happened in Vegas the last couple years, the appreciation is hollow. It’s self-created by the market and doesn’t have a solid foundation, so eventually the market has to correct downward. Utah’s market has not been mainly because of investors

Job growth is stronger than normal now and will continue to be during the next few years. An influx of businesses moving to the area and the low employment rate mean that there is, and will be a need for homes. This is a natural and healthy way for a market to appreciate.

Utah has the youngest median age of any state in the nation. Larger families and more children means more future housing needs for the area. A large percentage of the population in any area will continue to live in that area even after becoming adults, but the rate is higher than average in Utah, probably in large part because of the focus on family in the state.

There is still room to grow. Many areas around the country are running out of room, but Utah is still relatively rural and the metro areas, such as Salt Lake, Provo and Ogden still have some elbow room that allows new communities to be built and allows for homes in the first time buyer range to be built, getting these kids and young families started in the market so they can later move up (and pay more) for a future home.

What this all means is that the overall market in Utah is healthy and will continue to be strong for a while, regardless of what happens on the coasts, where most media is focused.

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9 thoughts on “Utah Real Estate Market Continues to be Strong

  1. I bought a home in a new development in Mapleton called Harvest Park. There web address is HarvestPark.net. My town home is yet to be finished and I closed seven months ago in July of 2006. The builder, Brandon Dubois of Dubois Construction promised to complete it at least 12 times and he has not. I have several items missing. A missing medicine cabinet, an unpainted ceiling, broken jets on a tub, etc. I am not the only one, check with the other residents in Harvest Park. They have many more complaints than I do. Every person has a problem–ask the Bishop of Mapleton 4th ward. The people in charge of the development are clueless. Everything is moving so slowly. I am so pissed that I put my home up for sale. It is a risk to bash my investment, but gullible Utah investors will still put out money for this award winning Harvest Park. But verily I say unto you, it should be named HARVEST HOAX!!!!!!!!!!! And they should win an award for stupidity and bad business sense. Contact me if you want any information and I will give you the truth…vistoral@juno.com

    UPDATE (ALLOWED BY MODERATOR):
    The issues have been completed. I only wish to put this in the past.
    -Joe-
    4-14-08

  2. While Utah has the focus on family and thus the large amount of grown children staying in-state into adulthood, I (and everyone my age that is in a position to buy) am apprehensive. A substantial amount of Utah’s households are single-income households as many mothers are not in the workforce. These solitary incomes are also less than comparable occupations elsewhere in the nation. On top of all that, there are significantly more dependents per household in Utah than in the rest of the nation. If all that weren’t enough, but even with low costs of housing, Utah continues to lead the nation in personal bankruptcies consistently, year after year. Perhaps it is the large number of young parents and young homeowners taking on the financial learning curve earlier than the rest of the country. But whatever the reason, a massive hike in real estate prices simply can’t be sustained in Utah. It’s been my observation that Utah has become home to a large number of out-of-state people of two groups. One groupg made a lot of cash in coastal bubble markets and want to avoid having to turn around and buy at bubble prices in the same market. The other group must escape a bubble market in which they have been priced out of a home. They see Utah as a beautiful, clean, safe state with affordable housing and seek refuge here. Sellers are then able to ask more for their homes, as out-of-staters think they’re getting a steal. One man’s sticker shock is another man’s bargain!

    This trend was pushed even higher when flippers wanted on the bandwagon and further fueled the hike.

    As coastal bubbles pop and their residents stay to reap the benefits of what is NOW a buyer’s market, our supply of out-of-state market-inflators is being cut off and we are stuck back at square one…single income households with quadruple the mouths to feed (as the rest of the US). This is not a healthy market.

    Your analysis would be encouraging to me and my grumpily-renting peers if these other factors weren’t so impossible to ignore. At this rate, I would not buy a house. I fear that a correction (and not the kind that brings prices UP) is on the horizon and I don’t know if I want to live in the house I could afford, for more than 10 years. When I grow my family, I’ll want a house we can all fit into. And at current Utah prices, I couldn’t afford a home like that.

  3. The items have been fixed after eight months. So I am not as pissed, and to make matters worse, the man I just ripped on lives in my development and is suppose to be in my ward/church (LDS religion) so that makes things weird. Nonetheless, I think the area is cursed because there have been 3 sewer back ups, flooded basements, delay, delays, delays, and stupidity. The sign I put out was taken without warning and The covenants say we can’t have them but the builders have for sale signs in 5 places–so it is a little hypocritical. One sign misspells “Constuction” which just caps the iceberg. I do believe the place has been built on an old Indian burial because there are just too many weird things happening here. Thanks for replies and reading my ventings. Have a good day.

  4. Joe…
    I understand your need to vent. I have known a lot of people who have had difficulties building their new homes. However I feel compelled to say I think you’ve taken it a little too far. You seem to be bashing this guy under the guise of being a religious fellow. And the builder attends this same church as you, right? How hard that must be for him to feel comfortable there now that you’ve taken this road. My question is, what are you doing rounding up everyone in your church, including your bishop, trash talking him? Doesn’t seem like a very righteous act. I don’t know much about your religion, but what I do know is the LDS church members pride themselves on being kind unto others and living “the golden rule”. I’m not sure you really thought this through before you put your builder’s name in such bad context where anyone can see it on the internet. Granted I don’t know this guy, or you for that matter, but I felt a need to defend him since he most likely has his own side to the story. Who knows, you might have been an incredibly difficult person to work with, or some of the things that happened in your community could have been totally out of his control. Whatever the situation is though, I think you should give the guy a break and take a look at yourself and your own need to trash talk someone at the expense of their reputation, or hurt you could cause him and his family. Just a thought.

  5. Pingback: News for Mormons » Utah’s Housing Market “No Longer Insulated”

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