A top Utah economist predicts Salt Lake County’s real estate markets will see a healthy 2015, even as the U.S. Federal Reserve is signaling a possible hike in interest rates.
Residential sales in the county are projected to rise by 7 percent this year and home prices by 4 percent, says James Wood, director of the University of Utah’s Bureau of Economic and Business Research.
The U. economist and others unveiled forecasts Friday to a gathering of thousands of the state’s real-estate professionals. With the potential of earning nearly $250 million in total sales commissions this year, Realtors welcomed the positive outlook.
‘How can you not help but dance with the way the markets are moving?’ beamed Dave Robison, president of the Salt Lake Board of Realtors, host of Friday’s gathering at Salt Lake City’s Grand America Hotel.
In 2014, Utah’s housing markets lost momentum from their rebound out of the Great Recession, Wood said. A surge in home prices slowed significantly from double-digit levels the year before, leading Salt Lake County’s median home sales price to end 4 percent ahead where it started in January.
Prices even fell in five cities in the county during 2014: South Salt Lake, Holladay, Cottonwood Heights, Murray and Riverton.
Nearly 30 percent of the county’s 11,490 home sales in 2014 were made in Salt Lake City, while half were spread across suburban communities: West Jordan, Sandy, West Valley City, Taylorsville, Draper, Herriman and Riverton.
Remnants of the housing crash — underwater home loans, high foreclosure rates and distressed sales — no longer are a major factor holding back real estate markets, Wood said. Strong economic fundamentals are now the primary drivers, with stellar job growth, low unemployment and an expanding national economy propelling Utah home sales.
Household debt remains elevated by historical standards and wages still are sluggish, but measures of consumer confidence are starting to turn.
‘We’re finally getting people back to where they feel a little better about what is going on,’ said David Crowe, chief economist for the National Association of Home Builders.
While interest rates remain at a 44-year low, Wood said, they ‘are very likely to sneak up a bit’ as the Fed eases back on its support of capital markets. While 30-year fixed mortgage rates were at 3.8 percent as of Wednesday, major forecasters are projecting they will rise to between 4.4 percent and 5.4 percent by year’s end.
Even that has an optimistic side, Wood said, because the effects of higher rates are likely to be offset by the easing of lending restrictions, making home loans more available.
Sourced from: http://www.sltrib.com/news/2121761-155/economists-predict-robust-year-in-salt
My Utah Home Expert 