| Wednesday January 7, 2015:
The 2014 numbers are in! The median sold price for a single family home in Salt Lake County increased from $245,000 in the 4th quarter of 2013 to $255,000 in the 4th quarter of 2014, a 4% increase. Overall Salt Lake County home values haven’t changed much since September 2013 and if you think about it, it makes sense. We had declining home values from 2008 to the beginning of 2012 and then the market started really heating up and rallied from the first quarter of 2012 until the third quarter of 2013. During those six quarters the median home value in Salt Lake County increased 31%. This was due to a combination of low home prices, an improving economy, falling interest rates, a decrease in the supply of homes and an increase in demand for them. In April 2011 the 30-year fixed rate mortgage was at 4.9%. By December 2011 it had fallen to 4.0% and remained below that level until May 2013 when it was at 3.6%. These were record low interest rates. When interest rates were below 4%, we were booming. From May 2013 through September 2013 the 30-year fixed interest rate increased from 3.6% to 4.6% which increased the cost of home ownership right after the median sale price had just increased by 31%. The market went flat and has been since then. But check this out. Since September 2013, interest rates have gradually declined from 4.6% to 3.9% today.
And that’s not all. Fannie Mae just started offering 3% down 30-year fixed rate Conventional loans on December 15, 2014 and Freddie Mac will start offering them on March 23, 2015, just in time for the spring selling season. This is a pretty big deal. These 3% down Conventional loans will have a lower down payment and lower Private Mortgage Insurance (PMI) rates than a FHA loan and only require a FICO score of 620 or better. They will also have PMI that can be removed once the home owner has more than 20% equity in their home. Currently on a FHA loan, the PMI stays in place for the life of the loan and the cost is steep, adding 1.35% of cost to the interest rate. So a 4% rate is 5.35% on a FHA loan if you include the PMI, and that’s for the life of the loan. So the median sale price for a Salt Lake County home has been flat for five consecutive quarters, there are now less expensive low down payment conventional loan options for buyers, interest rates have fallen below 4% again and housing inventory is pretty tight right now in most areas and price ranges. It just might be a strong spring selling season this year. My fingers are crossed! One more thing I want to mention. Nearly 80% of my business comes from repeat clients, friends and referrals from the people I know. If you, a friend, a family member, a coworker or someone else you know needs help buying or selling real estate in the vicinity of Salt Lake County or just have questions they need answered, I would love to help them out. If you found this article interesting and would like to keep up to date with the Salt Lake County real estate market, I typically post two to three times a week on my SLC Homes Facebook page and you can find that at: https://www.facebook.com/SLCHomesNews Thank you! Kev
Kevin Coyle Copyright © 2015 SLC Homes, All rights reserved. |
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