Why You Shouldn't Wait to Buy A Home in Salt Lake - Simple Analysis

If you are considering a home purchase in the Salt Lake City, Utah area, you may be getting mixed signals as to whether you should buy a home now, or wait another year.

A recent article Forbes Magazine stated, "In Salt Lake City, the median home sale price for the third quarter this year rose 14% over the same time in 2006, according to data released today by the National Association of Realtors (NAR). That's the biggest increase of the country's 50 largest metros measured." (November 21, 2007)

I would suggest that since September the appreciation rate has slowed to about 7-10%. We will know for sure on January 1st, 2008, but my guess is that it will fall somewhere in that range. I would also suggest that it will likely continue to slow until it returns to the 3-5% range where it historically sits. Being on the tail end of the housing booms is a desirable position from my viewpoint.

Currently I am still seeing many listings at 10, 20, even 30 and 40 Thousand Dollars TOO HIGH. These listings are part of the 2/3rds of the listings that are not selling in our market. That's right, two-thirds of all listings did not sell in the third quarter of this year (2007). Recently we have walked away from negotiations when Sellers have been unrealistic with their pricing. Although it has been occurring more frequently, there are still homes that are priced at market value, or close enough to it to come to reasonable terms.

What does all this mean? Is it a good time to buy or isn't it?

Remember, even though many listings are overpriced substantially, one-third of residential home listings did sell last quarter and the median price of those homes that sold was 14% higher than it was in 2006.

The bottom line is this: Home prices in the Salt Lake area will not rise by 20% over the next year, but it is very likely that they will rise somewhere between 3 and 8% between now and December of 2008. That means that buying the same home then as opposed to now will cost you somewhere between $9,000 and $32,000 more than buying it today. In terms of monthly payments, at 6% interest, that same house will cost you $45 to $160 more per month in one year than it would cost you if you bought that home today. That is $45 to $160 per month for the life of your loan.

Because over half of all listings are currently overpriced, it is more important than ever to use an agent who will work on your side of the transaction. As an Exclusive Buyer's Agent, my job is to get the lowest price and terms for you, the Buyer. Most real estate agents work for the Seller. We work for Buyers and Buyers only.

For more information, just call us at (801) 969-8989 or contact us via the link on this page.

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