2017 was another solid year for residential real estate in Salt Lake County, with property values increasing across the board in all categories. So let’s get into it.
Median Prices Rise Again:
The median price of a single family home in Salt Lake County increased from $295,000 in the 4th quarter of 2016, to $330,000 in the 4th quarter of 2017, a 11.9% increase. If you look at the same time frame from 2015 to 2016, the increase was 8.1%. In the last three years it has increased 29.0%, from a median price of $256,000 in the 4th quarter of 2014.
The median price of a single family home in Salt Lake City increased from $300,000 in the 4th quarter of 2016, to $330,000 in the 4th quarter of 2017, a 9.1% increase. If you look at the same time frame from 2015 to 2016, the increase was 9.5%. In the last three years it has increased 32.0%, from a median price of $250,000 in the 4th quarter of 2014.
The median price of a condo/town home in Salt Lake County increased from $210,000 in the 4th quarter of 2016, to $230,000 in the 4th quarter of 2017, a 9.5% increase. If you look at the same time frame from 2015 to 2016, the increase was 5.0%. In the last three years it has increased 32.2%, from a median price of $174,000 in the 4th quarter of 2014.
The median price of a condo/town home in Salt Lake City increased from $199,000 in the 4th quarter of 2016, to $218,000 in the 4th quarter of 2017, a 9.5% increase. If you look at the same time frame from 2015 to 2016, the increase was 5.8%. In the last three years it has increased 29.0%, from a median price of $174,000 in the 4th quarter of 2014.
Housing Inventory Remains Scarce:
We are starting out 2018 with very low inventory. This is the third year in a row where the 4th quarter results show that slightly more homes were sold than were listed in Salt Lake County, with 3,186 homes listed and 3,248 homes sold, during the 4th quarter of 2017. During the 4th quarter of 2016, 3,032 homes were listed and 3,230 were sold.
The chart below shows the 2nd and 4th quarter results for single family home sales in Salt Lake County since 2007. The top line is the median sold price, the middle line is the number of homes listed and the bottom line is number of homes sold.
The difference between the number of homes listed and number of homes sold is the light green section in the middle of the graph. You can see that when the number of homes listed and the number of homes sold are close to being equal at the end of the fourth quarter, in the following six months, home values rise. You can also see that during the recession when the number of home listed far outpaced the number of homes sold, values declined. You can also see that during the 4th quarters of 2013, when the number of homes listed slightly out paced the number of homes sold, that the median price of a home rose less in the first half of 2014.
I see no reason why the first half of 2018 wouldn’t be the same as the first half of 2017. I expect we’ll see many multiple offer scenarios on homes that are priced to sell, and increasing home prices in the first half of 2018 in the range of 7 to 10%. If you’re a buyer, get out there early, if you’re a seller, you might want to wait to list your home until spring, in order to make a extra bucks on your sale. If you’re buying and selling, let’s talk, it depends on your situation.
30-year Mortgage Rates are still at Historical Lows:
The 30-year mortgage rate is about 4.0% right now, and has been in the range of 3.8 to 4.3% during 2017. The 15-year mortgage rate is currently 3.4%, and has been in the range of 3.1 to 3.5% during 2017.
The 30-year mortgage rate is expected to increase this year, with a consensus estimate of 4.7% by December 2018, according to MarketWatch.com, a financial advice web site. We’ll see what happens, it’s hard to predict.
Federal Tax Reform Changes:
Last month, on December 22nd, Trump signed the new Republican tax bill into law. According to NPR, it’s over 1,000 pages long. I haven’t read it, but I’ve read a couple articles about how it will effect home owners.
First the good news. The new tax law doesn’t change the capital gains tax exclusion for capital gains realized from the sale of an owner occupied primary residence, occupied for at least 2 out of the last 5 years. That will remain at a $250,000 capital gains exclusion for a single person and $500,000 for a married couple.
However, the mortgage interest tax deduction for an owner occupied home has been reduced. The maximum amount of mortgage debt that you can write the interest off on your federal taxes has been reduced to $750,000 for a married couple or $375,000 for a single person. It was $1,000,000 for a married couple or $500,000 for a single person.
The new tax law also limits your deduction for state and local taxes, which includes property taxes, to a combined total of $10,000 for a married couple and $5,000 for a single person. There was no previous limit on this.
These two new tax laws will only effect a small portion of home owners along the Wasatch Front. The people that will be most effected are people that live in high priced markets, like Park City or San Francisco, and those in who live in states with high property and state taxes, like New York State.
If you have any questions about buying or selling real estate in and around Salt Lake County, wonder what your home is worth, or have a friend that needs help buying or selling, please contact me. I’ve been a local Realtor since 1999, and absolutely love what I do, and I can’t do it without you.
Thank you!
Kevin Coyle
Realtor Broker MBA CRS
SLC Homes
M: (801) 243-0699
Kevin@SLCHomeBuyer.com
