Wednesday, February 12, 2020 / by Justin Critchfield & Michelle Aspseter
Will Home Prices Continue To Rise in Utah?
So, what does the future look like in Real Estate for the State of Utah?
Home Prices to go up by 6%
If you recap the last year, in 2019 home prices went up by 7%. That was huge.
The question on everyone’s mind now is:
Are the prices for homes going to crash in 2020?
All the indications are showing that the prices are going up. 2020 is going to be nothing like 2007. The experts are predicting that the home prices are going to go up by 5% in 2020.
Our guess this time is a 6% increase in home prices in 2020. Home prices are going to appreciate at least 6% this year because of low-interest rates. Low interest rates are a huge factor contributing to this appreciation. Interest rates are dropping and are going to stay low for the coming year.
Average Income to appreciate by 4%
In 2019 job pay increased by 4.4%. That’s your income for an employee in Utah going up 4.4% on average. It is predicted that in 2020 the average income for an employee will go up very similar to that again. Because of that, the home prices are to go up at least 4%.
This factor is going to continue to make housing still a possibility with low rates and increased pay. Hence, it will drive the price up to 6%.
Was last year a blip in market values?
If you consider last year to be a blip in market prices, a 4% increase is clearly seen on a 25-year basis. Think of it this way, if you bought a house in 2011 for an average price of $200,000 to $300,000, home prices have gone up 10%+ every year since 2011. You can well imagine that $300,000 house giving you a $30,000 bonus check every year.
Here is what’s happening. People are getting 30 grand on every anniversary in equity. For buyers, if it’s going to keep going up, which it is, for them a $30,000 gamble is a pretty safe bet.
Even if it doesn’t go up to 30 grand a year, you are still going to win. You are going to be in a home. You are going to be stable. Your rents are going to go up and you’re getting insanely low interest-rate.
After the worst crash of the United States lifetime and after the depression we climbed back up in 2016 and are now double that in 2020.
Since 1996, here in the state of Utah, home prices have gone up 4.5% including the year of the Great Recession. If we didn’t have that, the home prices would have gone up by 8-9% per year.
Here is what you should do
Get into the market now and buy your home now. The longer you wait, the less inventory and choices you will have to choose the house. This also means there will be more competition if you wait any longer.