There has been so much growth in the housing market over the last 5 years that many people are wondering if we have hit the peak and are about to start a turnaround. In this episode, we talk about the real numbers behind the housing market and what experts are saying about our future growth.
Hey this is David Pestana team leader and broker here at Rise Realty. Today I want to give you a third quarter market update year over year from last year and what’s happening in the real estate market and please as I comment on the market I want you to comment below and tell me what you think of the market and what stats are important to you. If you think I’m full of it or if you believe the stats let me know. All right, again please subscribe to our channel and follow us and again comment below. Now to start I want to talk about price everyone wants to know about price. Well in the last 12 months we’ve seen 11 and a half. Percent increase in price in fact That’s the highest percent increase that I’ve seen over the last 10 years. So when it comes to the. Economics of housing it’s very strong so much so that our prices are just going up now. What I don’t like about 11 1/2 percent is that it’s not really a sustainable number. You can’t have 11 and a half percent increase for year over year at some point. We need to slowdown in that number. The second stat that we’re going to talk about is total homes sold. Now from year over year we’re down two point nine percent which is 377 homes. So like the year before were just over 13000 and now we’re just under 13000. There is there is a normal cooling in the market generally around this time as far as total number of homes sold. Even though price continues to increase. But what we’re seeing is we’ll see if this is a trend or not. But right now it’s just a small variation. So a lot of homes are being sold. So in comparison that the total number of homes sold are still at a very very high level so we’re selling a bunch of homes and. We always ask ourselves if no new homes came on the market how long would it take to sell all the existing inventory. So we have this inventory stat and this stat shows that basically it’s it’s basically one point six seven months or about 50 days if. No homes were sold are no additional inventory came on the market we would sell every home on the MLS. And that’s still very much a seller’s market. And that’s why you’re seeing home prices skyrocket so much because you know every house that is listed is still has a ton of buyers looking at it. Now if that number starts to extend out too far then you’ll start to see softening in the home market. But for right now it’s still pretty strong. A lot of people start to talk about whether we’re going to have a decrease in the real estate economy. And again I ask them you know what’s their reasoning. And they may talk about what’s being said on the news but I want to ask you what fuels real estate economy. And the answer is jobs. The more jobs that are in the state of Utah and the higher paying those jobs those people in their own personal lives are going to feel very confident about what’s happening and optimistic. And so right now in the state of Utah we’ve seen the one or some of the most some of the lowest unemployment rates ever. We went from three point three percent last year which was really good unemployment to 3 percent this year. And in fact articles say that we created almost as many jobs as people that were looking for jobs. So in terms of job creation we are number one in the nation not just in not just like doing good for here but in the nation. So we’re creating a lot a ton of good jobs and people are moving to the state of Utah to fill those jobs which is driving the housing market now being kind of a tech sector as well. Many of those jobs are a higher than average paying which is definitely. When they come here. We have a great housing market and a lot of options. Bigger homes for them to choose from. So long as jobs are good we’re going to see the economy here very good. And the housing market good as well. If you see that job market dramatically changed that’s when you see the housing market change. The last thing that we’re really concerned about is interest rates. The Federal Reserve is determined to increase rates to a normal level which they say is around 6 percent. Today we’re at 5 percent. And we started as low as three and a half percent. So we’re moving up. And what we’re going to see in the next year is as a lot of rate increases generally about once a quarter. The Federal Reserve increases the rate a quarter percent. All right. So how does that affect everybody. Well higher interest rates mean higher payments. So even if the price of homes stayed level you would pay more for the House in terms of a monthly payment. And as the monthly payment goes up it’s going to pinch people’s budgets so they may not be able to pay more and more for houses as price goes up. So interest rates are probably going to what’s what’s going to slow down the price increases in homes going to absorb it a little bit. And that’s exactly the design of it. They said that as as the economy is good they’re going to take advantage by raising rates just in the opposite way where the economy’s bad. They stimulated it by by lowering the rates. So we’re we’re going to see that happen this year and our generals and our fundamentals are still really good. We have great employment good paying jobs here and a lot of demand because of the influx of people into the state. So we don’t see housing market necessarily slowing down. For those reasons the only potential reason is because interest rates are going up which is going to absorb some of the price increase. But the fact is we don’t want 11 percent price increase every year. We’d rather be around that 4 or 5 percent would be much better for everybody. All right. Thank you. Thanks for watching. We hope that you’ll enjoy this episode. Please subscribe please comment below if you. Think what I said was crazy. Go ahead and comment if you agree please let us now. Let’s get the discussion going. I’d love to hear what you have to say.