Why Home Prices in Tooele County UT Keep Going UP

Housing costs increase
Home prices Up in Tooele County UT

We probably don’t care why housing prices are on the rise all across the country, but, we do care why home prices in Tooele County UT keep going up, up, up.

Those of us that live here and enjoy the tranquility and the laid back lifestyle of this community know why. You add the availability of all of the cultural and entertainment benefits of Salt Lake City & now you can know why we expect it to continue.

My good friends at Keeping Current Matters posted this article yesterday about the real estate market and I thought I should send it on. (with my comments of course).

Some of the things you may want to be aware of when you go thru this info is the influence that new construction has on home prices, and the tremendous price difference between listings in SLC and available homes in the various cities in Tooele County.

Remember the old info about supply and demand

  1. Tooele County with 567 single family new home sales is 7th in the nation in growth.
  2. Not much development land North, South or East.
  3. New construction woll continue to be Westward.
  4. Grantsville Utah is fastest growing city in Utah.
  5. Stansbury Park UT is only 10 units behind Grantsville in new construction permits.
  6. Lake Point Utah has had the highest percentage of increase for new construction in State.
  7. Supply of homes in Tooele County is at the 2 month level.
  8. Prices for a 4 bedroom, 3000 sq.ft. Rambler in Tooele County ten years old or less, is listed @ $120 SQ.FT.  The same house in Salt Lake County is $ 153 SQ.FT.
  9. To really see why home prices in Tooele County UT keep going up multiply the difference per square foot on a 2000 sq.ft. home in Tooele to your dream home in SLC.

Here is what KCM had to say.

Why Home Prices Are Increasing | Simplifying The Market

Why Home Prices Are Increasing

There are many unsubstantiated theories as to why home values are continuing to increase. From those who are worried that lending standards are again becoming too lenient (data shows this is untrue), to those who are concerned that prices are again approaching boom peaks because of “irrational exuberance” (this is also untrue as prices are not at peak levels when they are adjusted for inflation), there seems to be no shortage of opinion.

However, the increase in prices is easily explained by the theory of supply & demand. Whenever there is a limited supply of an item that is in high demand, prices increase.

It is that simple. In real estate, it takes a six-month supply of existing salable inventory to maintain pricing stability. In most housing markets, anything less than six months will cause home values to appreciate and anything more than seven months will cause prices to depreciate (see chart below).

Why Home Prices Are Increasing | Simplifying The Market

According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes for sale has been below six months for the last five years (see chart below).

Why Home Prices Are Increasing | Simplifying The Market

Bottom Line

If buyer demand continues to outpace the current supply of existing homes for sale, prices will continue to appreciate. Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should.