Current Market Conditions

There are several factors to watch in order to determine the direction of the Utah housing market.

The growth of the community, the unemployment rate and current job demand, mortgages, home sales, and home price trends are the best economic indicators of the direction of Utah's housing market.

To better understand the 2008 housing market and beyond for the state of Utah I will focus on the five categories listed above in depth.

1. Population

Population Growth:

• Utah population growth from 2006 - 2007: 3.2%
• Estimated population growth 2007-2008: 3.1%

So how do we stack up nationally?

• U.S. Population Growth from 2006-2007: 0.9%
• Estimated U.S. population growth 2007- 2008: 0.9%

Net Migration:

• Utah 2007 Net Migration Forecast: 44,252
• Utah 2008 Net Migration Forecast: 41,200

2. Jobs

Job Growth:

• Utah employment growth October 2006-2007: 4.3%
• Utah employment increase October 2006-2007: 52,500
• Utah unemployment rate October 2007: 2.8%

And Nationally?

• U.S. employment growth October 2006-2007: 1.2%
• U.S. unemployment rate October 2007: 4.7%
  

3. Mortgages

Mortgage Rates:

• Projected 2007 Annual 30-Year fixed Rate: 6.4%
• Projected 2008 Annual 30-Year Fixed Rate: 6.5%
• Projected 2007 Annual 1-Year ARM: 5.6%
• Projected 2008 Annual 1-Year ARM: 5.1%

Foreclosures:

• Utah Delinquency rate 3rd quarter 2007: 3.92%
• U.S. Delinquency rate 3rd quarter 2007: 5.59%

4. Sales

Home Sales:

• Utah homes sold 3rd quarter 2007: 9,515
• 2007 3rd quarter sales down from 2006: 24.62%

5. Prices

Average Home Price:

• Utah average sales price 3rd quarter 2007: $288,307
• 2007 3rd quarter sales price up from 2006: $12.91%

5-Year Appreciation:

• Five-Year Utah appreciation rate: 54.36%
• Five-Year U.S. appreciation rate: 46.92%

So what does it mean for the future 2008 and beyond in Utah?

Now that we have accurately gathered all of the data from the Utah Department of workforce services, National Association of Realtors®, Mortgage Bankers Association, Global Insight, Utah Population Estimates Committee, Utah Association Of Realtors®, and the Office of Federal Housing Enterprise Oversight, it is important to zoom in a little further.

Utah is excepted to grow in population 3.01% faster than the U.S. average. Our job growth is expected to increase 3.1% more than the U.S. average. In Utah we have 1.67% fewer mortgage delinquencies than the U.S. average cutting down on foreclosures and keeping home prices accurate. The average home price in Utah is up from 2006 by almost 13% and if you read the previous blog you would know that Utah has been the highest appreciating state in the U.S. for 4 consecutive quarters, and the 5 year appreciation rate of your home in Utah is an amazing 7.44% higher than the U.S. average.

As far as home sales go, they are down from 2006, which fell in line with some record breaking home sales years in Utah. In order to understand the statistic of home sales being down here is an analogy that is completely appropriate for the situation. Let's say that the temperature in Utah was 120 degrees Fahrenheit every single day for 12 consecutive months. The next year the temperature dropped to 115 degrees for the first few months and eventually tapered off to 100 degrees Fahrenheit by October. Would you say that the temperature outside was cold? In this analogy the home sales are represented by the temperature. Homes were selling in Utah at record breaking unheard of numbers during the housing boom and when many parts of the nation fell flat on their face Utah tapered off to a normal comfortable level, important for future housing economic stability in our great state.

So from where I sit....

All signs point toward a stable and strong growth in the housing market in Utah. Owning a home is the key to creating wealth in the United States and we are lucky enough to be in a place where the housing market it is strong and equity continues to grow in our homes.