A lot of the calls I have been getting revolve around the question, “are home values really inflated in Tooele County“? I think what peeps want to know is are we going to see another housing bust in the near future. Is real estate a good long term investment?
No one knows for sure, but this article by Keeping Current Matters should give some comfort to those thinking of buying a house in Tooele.
KCM quotes from Zillow, and publishes a few graphs that suggest that while we have experienced price appreciation similar to those just preceding the fall, other circumstances indicate that home ownership is in good shape.
Here is what they had to say.
Last week, the National Association of Realtors (NAR) released their most recent Existing Home Sales Report. According to the report:
“The median existing-home price for all housing types in January was $240,500, up 5.8 percent from January 2017 ($227,300). January’s price increase marks the 71st straight month of year-over-year gains.”
Seventy-one consecutive months of price increases may have some concerned that current home values may be overinflated.
However, at the same time, Zillow issued a press release which revealed:
“If the housing bubble and bust had not happened, and home values had instead appreciated at a steady pace, the median home value would be higher than its current value.”
Here are two graphs that help show why home prices are exactly where they should be.
The first graph shows actual median home sales prices from 2000 through 2017.
By itself, this graph could heighten concerns as it shows home values rose in the early 2000s, came tumbling down and are now headed up again. It gives the feel of a rollercoaster ride that is about to take another turn downward.
However, if we also include where prices would naturally be, had there not been a boom & bust, we see a different story.
The blue bars on this graph represent were prices would be if they had increased by the normal annual appreciation rate (3.6%). By adding 3.6% to the actual 2000 price and repeating that for each subsequent year, we can see that prices were overvalued during the boom, undervalued during the bust, and a little bit LOWER than where they should be right now.
Based on historic appreciation levels, we should be very comfortable that current home values are not over-inflated. But, now I’m going to show you what has happened to housing prices locally so you can make that decision yourself.
Price Increases In Tooele County By Year
Tooele County: The average sales price per square foot across all areas in the county is $111.32. That is up from the low point year of 2012 of $64.58. An increase of $46.74 SQ.FT.
Tooele City: Prices have increased in the city a whopping $55.67 a SQ.FT. since 2012. when the low point was $56.33 to $112.00.
Grantsville Utah: Over the last 7 years, single family property has sold for more than $20.37 more per SQ.FT. than the $80.45 it sold for in 2012.
Stansbury Park UT: In 2012 homes in Stansbury Park sold on the average for $77.20 SQ.FT In February of 2018 that price was $114.15.
Erda Utah: In Erda Utah prices on average increased from $88.62 in 2012 to $95.47 this year. This is an upward trend of only $6.85 over the last 7 years.
Lake Point Utah: From $91.97 to $103.05 SQ.FT from 2012 to February 2018 is only $11.08 per year increase in the price of houses sold in Lake Point.
Inflation Of Home Values Is Local
You can see from the numbers that as much as we can’t depend on the national statistics when evaluating property appreciation, the same is true neighborhood by neighborhood.
The differences in price one city from the other in an area can only be explained by the old phrase “all real estate is local”. And you need a local agent to decipher the difference in growth as well as price.
First glance shows a huge percentage of increase in Tooele city, but not so much in the outlying areas.
To an outsider this could look like inflation. To a local pro however, that understands the impact of new home construction and large lot restrictions in some of the communities it means a strong healthy market for homes. It means that a lot of new houses are being built in Erda, Lake Point & Stansbury Park UT.
Call me, Berna Sloan 435-840-5029.
Let me answer more are home values really inflated in Tooele County questions.