Utah’s housing market enjoyed a good year in 2015, although a shortage of homes on the market posed a challenge for homebuyers. Double-digit price increases from a year ago were common in many communities, along with multiple offers on some homes, while the limited inventory helped keep a lid on home sales.
As 2016 begins, many industry experts believe we’re heading towards a more balanced market, one in which inventory will gradually increase and sales will climb at a moderate rate. If the forecast holds true, it could be welcome relief for potential homebuyers who may have been frustrated by last year’s heated marketplace and the limited number of homes from which to choose.
The National Association of REALTORS® (NAR®) forecasts home sales nationwide to rise approximately 3 percent in 2016 to 5.45 million units, up from an estimated final tally of 5.3 million units in 2015. The national median existing-home price is expected to rise to around 5 percent in 2016.
Here in Utah we saw a 7 percent increase in sales and a 3 percent overall gain in average sale price in 2015. The real story this year was the shortage of inventory. At the same time we saw closed units increase we saw a whopping 19 percent decline in inventory numbers from a year ago.
We currently only have about four months of inventory market wide. Some sellers are reluctant to list for fear of not finding a replacement property. Others may not have enough homeowner equity to sell if they purchased their home at the top of the market in 2006-2008 and paid a premium price.
Where does this all leave us for 2016? Although we don’t have a crystal ball, we tend to agree with recent Realtor® forecasts that project moderate increases in home sales in 2016 by about 5-6 percent, and stable price increases of about 2-3 percent year over year.
Population growth along the greater Wasatch Front should continue to help fuel that demand for housing. The Salt Lake City and surrounding area has a projected population growth of approximately 300,000 in the next five years. Most of the increase will be from organic growth, but also from new residents due to a friendly business tax environment, low cost of living, and recreational opportunities that companies see as desirable to move their businesses to Utah.
So if you’ve been thinking about buying or selling a home, 2016 may be a good time to make your move. Industry experts are predicting a more balanced housing market with improving home sales. We know you may have questions about the market and the process of buying or selling a home. Please give us a call, text or send an e-mail and we’re happy to answer any of your questions and see if the time is right for you to get into the market.