Great News In The Housing Market

Local market fundamentals and conditions will be favorable for the real estate market for 2016. Job growth is expected to slow slightly but this will be offset by higher rates of net-migration and improving wage rates due to a tight-labor market. There are no signs of a bubble; both sales and prices are at sustainable levels. The market and now particularly prices are now largely free of the harmful effects of closures, short sales, and underwater mortages, which held back demand and prices. And there is no indication of waning demands as demonstrated by the extremely low "days on market" data. On the supply side, the inventory of existing home listings shows demand outpacing supply and there is little concern about completing unsold inventory from home builders; their inventories are very low as well. All these positive local conditions will be supported by a very healthy statewide economy in 2016.

But beyond Utah's borders both nationally and internationally, there are some potential dangers. Most prominent is the showdown in the Chinese economy and the possible unraveling of their debt bubble. China's problem has contributed in part to the recent selloffs in stock markets internationally. Declining oil prices have also negatively affected financial markets and put fiscal and financial pressure on oil financing countries; Brazil, Saudi Arabia, Russia, and Nigeria. These worrisome, international conditions raised talk in some of a showdown in the U.S. economy and perhaps a recession. The US economy is now in the 77th month in expansion, a little long in the tooth as expansions go. The average post World War II expansion is 62 months, just over five years. The longest US expansion 120 months (1991-2001). It's important to note, however, that recent expansions have been getting longer due to structural shifts in the economy (more service oriented) and technological advances in inventory management. 

International and national conditions are legitimate concerns, but over the next 12 months barring a cataclysim in China or the Mideast, they will have little impact on the local residential real estate market. Total residential sales will increase from 17,100 in 2015 to 19,000 in 2016. An increase of 11%. Sales of single-family homes will be up 10% and multifamily sales a little stronger with a 13 percent increase in sales. The median sales price of a single-family home will increase in the range of 5-7 percent while the increase in the price of multifamily units will be higher at 8 to 10 percent.In 2016, the median sales price of a home will be near $290,000 and near $205,000 for a multifamily unit.

Presented by James Woods Ivory-Boyd Fellow, University of Utah

Shauna Quick

Realtor

Exit Realty Success

801-550-4419

www.shaunaqsellshomes.com

shaunaqsellshomes@gmail.com