December 13, 2008

The State of Real Estate in Northern Utah

I wanted to share a link with our blog readers that comes from the Salt Lake Tribune and shows the state of the market in Northern Utah from Salt Lake County to Weber County. Tracking is done by zip code for the past five years. A reader can track by quarter, the variance in the median price for that zip code to see how the market has changed from 2002 to now.

For example, in the Kaysville-Fruit Heights area the median price for 2002 (The Olympic Year) ranged from $160,600 at the start of the year to $182,950 by the end of the year or an increase of 14%. In 2003, the median price ranged from $170,000 to $193,250. In 2004, the range was from $169,643 to $199,500. In 2005 the range was from $180,000 to $229,000. In 2006, the range was from $225,000 to $334,900. In 2007 the range was from $257,000 to $347,000. So far in 2008, the range is from $266,000 to $295,950. In this very stable and popular area to live, the median prices have returned to their 2006 levels. Since 2002, the prices have changed from $193,250 to a high of $334,900 in 2006 (73% increase) to $295,950 (12% decrease) in 2008.

Although our sellers don’t like the current uncertain market, especially when prices have decreased, the overall five year trend shows very positive gains real estate values in the Kaysville and Fruit Heights areas. To search your own zip code and see your own comparisons please click here. You may want to save this link on our blog for future reference.

If you compare the appreciation rates (graph below) for real estate nationally since 1980 to 2006 (in five-year increments) you can see that normal appreciation ranges from 5% to 5.8%. If you look at the appreciation rate from 2000 to 2006 the average appreciation rate was 14.83% which created a bubble that we are now adjusting for. If you are looking for investment purposes, it is wise to plan on about 5% appreciation rates when estimating returns on real estate just to be safe.

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Another interesting chart to review is how real estate did when compared with the Dow, S&P, and NASDAQ from January 1, 2000 to September 30, 2008. You can see in the graph below that real estate is up by 72% while all the stock market indices were all down during this period. Another good reason to consider real estate as part of your retirement and portfolio planning.

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