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The Big Picture

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Over the last couple months, I’ve read some articles that have been cautionary regarding the state of the national real estate market, specifically in the metro areas in the western U.S., where homes are expensive, the housing market has rallied since the Great Recession ended, and the economies are strong.

Home values in LA, San Francisco, Portland, Seattle and Denver, are beyond the pre-recession prices, and people are noticing.  Salt Lake City is rarely mentioned in any of these articles, but we are also beyond pre-recession housing values, and have been for a few years.

Some predict that some of these markets will level off over the next year, due to the lack of affordable housing, increasing interest rates, personal income not keeping up with inflation in the housing market, and as a result, people being priced out of the market, causing a decrease in demand.

In the table below I present the big picture from 2007 to 2018, in Salt Lake County and Salt Lake City, as well as all the individual cities in Salt Lake County and the neighborhoods of Salt Lake City.

The first four columns show the 2nd quarter median values for a single family home.  There are four years that I think are significant, 2007 (the peak of the previous boom), 2011 (the bottom of the bust), 2015 (the average year that homes returned to 2007 values), and the current year, 2018.

The column marked “Exceed ’07“, is the first year that the median housing value, exceeded the 2007 values for that specific city or neighborhood.

The three columns to the right of the table, show the percent decline in median value from 2007 to 2011, the increase in median value from 2011 to 2018, and the big picture from 2007 to 2018.

Please note that these numbers are not adjusted for inflation.  Also, the numbers for Bluffdale and Emigration Canyon are hard to interpret due to the wide range of prices and scarcity of sales in Emigration, and the change in post recession housing stock in Bluffdale, which has added a ton of affordable condos and townhomes.

Salt Lake County 2nd Quarter HomeValues By City & Neighborhood
from 2007-2018 & Percent Changes
($ are Median Price of a Single Family Homes X $1,000)
2007 2011 2015 2018 Exceed ’07 2007-11 2011-18 2007-18
Salt Lake Co. $256 $202 $276 $358 2015 -21% 77% 40%
Salt Lake City $247 $195 $281 $370 2014 -21% 90% 50%
NE Burbs 2007 2011 2015 2018 Exceed ’07 2007-11 2011-18 2007-18
Canyon Rim $306 $225 $315 $436 2015 -26% 94% 42%
East Mill Creek $345 $231 $342 $490 2016 -33% 112% 42%
Holladay $414 $304 $365 $575 2016 -27% 89% 39%
Mill Creek $278 $184 $278 $365 2015 -34% 98% 31%
Murray $262 $180 $260 $320 2016 -31% 78% 22%
Olympus Cove $439 $390 $594 $661 2014 -11% 69% 51%
South Salt Lake $225 $171 $180 $294 2016 -24% 72% 31%
SE Burbs 2007 2011 2015 2018 Exceed ’07 2007-11 2011-18 2007-18
Cottonwood Hts $318 $257 $352 $462 2015 -19% 80% 45%
Draper $439 $369 $419 $513 2016 -16% 39% 17%
Midvale $215 $165 $232 $305 2015 -23% 85% 42%
Sandy $299 $221 $296 $400 2016 -26% 81% 34%
NW Burbs 2007 2011 2015 2018 Exceed ’07 2007-11 2011-18 2007-18
Kearns $169 $115 $180 $236 2015 -32% 105% 40%
Magna $185 $123 $177 $254 2016 -34% 107% 37%
Taylorsville $208 $155 $220 $283 2015 -25% 83% 36%
West Valley City $203 $138 $200 $269 2016 -32% 95% 33%
SW Burbs 2007 2011 2015 2018 Exceed ’07 2007-11 2011-18 2007-18
Bluffdale $488 $350 $440 $411 Inconclusive -28% 17% -16%
Herriman $316 $265 $314 $406 2014 -16% 53% 28%
Riverton $329 $240 $305 $403 2017 -27% 68% 22%
South Jordan $356 $279 $360 $440 2015 -22% 58% 24%
West Jordan $250 $185 $255 $321 2015 -26% 74% 28%
East SLCity 2007 2011 2015 2018 Exceed ’07 2007-11 2011-18 2007-18
Emigration $377 $865 $550 $552 Inconclusive 129% -36% 46%
15th & 15th $390 $311 $406 $538 2014 -20% 73% 38%
Harvard Yale $485 $360 $534 $693 2014 -26% 93% 43%
Highland Park $300 $234 $300 $414 2014 -22% 77% 38%
St Mary’s $574 $400 $521 $682 2017 -30% 71% 19%
Sugar House $325 $260 $334 $465 2014 -20% 79% 43%
CentralSLCity 2007 2011 2015 2018 Exceed ’07 2007-11 2011-18 2007-18
Avenues $378 $340 $470 $590 2014 -10% 74% 56%
Capitol Hill $265 $194 $224 $360 2014 -27% 86% 36%
Central City SLC $213 $174 $240 $308 2014 -18% 77% 45%
Liberty Wells $211 $183 $229 $330 2014 -13% 80% 56%
9th & 9th $390 $292 $343 $465 2014 -25% 59% 19%
U of U $296 $226 $306 $419 2015 -24% 85% 42%
West SLCity 2007 2011 2015 2018 Exceed ’07 2007-11 2011-18 2007-18
Glendale $135 $86 $160 $230 2014 -36% 167% 70%
Poplar Grove $131 $78 $163 $210 2014 -40% 169% 60%
Rose Park $171 $106 $181 $266 2015 -38% 151% 56%

If you look at the overall increase in the median value of a single family home in Salt Lake County, from 2011 to 2018, values have increased 77% during that seven year period, from $202,000 to $358,000.  This is equal to an annual compounded increase of 8.5%.

However, if you look at the big picture from 2007 to 2018, for all homes in Salt Lake County, the median value is up 40%, from $256,000 to $358,000, which is an annual compounded increase of 3.1% over that eleven year period.  Salt Lake City is up 3.75% for the same period

According to Freddie Mac, normal appreciation for a single family home in the United States from 1968-2018, is an average annual compounded rate of 5.0%.  If you look at 1978-2018, that number is 3.9%.

So since 2011, the appreciation in the median home value of a single family home in Salt Lake has far exceed the national average, but overall since 2007, the rate of appreciation is less than the national average.

Another thing to consider is the 30-year mortgage rate in 2007 compared to 2018.  In July 2007, the average 30-year mortgage rate was 6.7% (Per Freddie Mac) which works out to $645/month for every $100,000 borrowed.  In August 2018, the rate was at 4.55%, which works out to $510/month for every $100k, 21% less than 2007.

I believe we’re probably well past the half way point of our local real estate boom, nothing lasts forever, but for right now, housing inventory remains low, buyer demand is high, and the price of building materials has significantly increased, along with the price of labor and land, and I believe that our boom will continue into 2019.

I mentioned the national real estate market above, so here’s a quick comparison between the Median home values in June 2018, for cities in the western U.S, compared to Salt Lake.

  • San Jose, CA: $1,287,600
  • San Francisco: $953,600
  • LA/Long Beach/Anaheim: $646,300
  • San Diego: $583,700
  • Seattle: $455,600
  • Sacramento: $400,100
  • Denver: $397,700
  • Portland: $391,200
  • Salt Lake City: $370,000
  • Salt Lake County: $358,000
  • Las Vegas: $264,300
  • Phoenix: $254,700

If you have any questions about buying or selling real estate in and around Salt Lake County, wonder what your home is worth, need a contractor referral, or have a friend that needs help buying or selling, please contact me.  I’ve been a local Realtor since 1999, and I educate my clients on the market and process.

Thank you!

Kevin Coyle
Realtor  Broker  MBA  CRS
SLC Homes
M: (801) 243-0699
Kevin@SLCHomeBuyer.com

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