The Salt Lake City real estate market is expected to appreciate at a faster rate than the national average for the foreseeable future.
Salt Lake City real estate investing should benefit from the area’s increasing number of distressed property sales.
Real estate in Salt Lake City has produced some of the highest home seller returns in the country as recently as the first quarter of 2019.
The Salt Lake City real estate market has plenty of positive indicators working heavily in favor of today’s real estate investors. For starters, demand remains largely intact, despite the area’s above-average appreciation rate. Meanwhile, Salt Lake City’s population continues to grow, but the number of owner-occupied housing units hasn’t shared the same growth correlation. While the number of people continues to increase, it’s not owner-occupied homes that are on the rise, but rather renter-occupied units. As a result, real estate in Salt Lake City has largely benefited passive income investors, and looks to continue doing so for the foreseeable future. Likewise, Salt Lake City real estate investors who get in sooner rather than later may be able to capitalize on both appreciation and attractive rental yields.
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Median Home Price Salt Lake City
At this time last year (May 2018), the median home value in the Salt Lake City real estate market sat somewhere around $361,000. However, having benefited from an appreciation rate that more than doubled the national average, the median home value in the Salt Lake City real estate market has reached $401,500 in a relatively short period of time. To put the last year into perspective, the median home value in the United States is now $226,700 after appreciating by as much as 6.6% in one year’s time. Real estate in Salt Lake City, on the other hand, managed to more than double the rate of the national average. Over the last 12 months, in fact, the median home value in Salt Lake City increased at a rate of 13.9%. Perhaps even more importantly—at least for Salt Lake City real estate investors and homeowners—the city’s latest appreciation rates look like they will be able to hold their course and once again outpace the national average. While median home values across the United States are expecting to increase approximately 4.1% in the next 12 months, real estate in Salt Lake City may be the beneficiary of a 6.4% jump.
Salt Lake City Foreclosure Statistics
The Salt Lake City real estate market is currently home to hundreds of distressed properties. According to RealtyTrac, there are at least 340 homes in Salt Lake City that may be classified as default, auction or bank owned. Meanwhile, the number of properties that received a foreclosure filing at the end of the first quarter (March 2019) increased from the previous month and this time last year, 47% and 16% respectively. It is worth noting, however, that the majority of distressed real estate in Salt Lake City hasn’t officially been foreclosed on, but rather is in a state of pre-foreclosure. About 81% of the homes identified by RealtyTrac are merely at risk of foreclosure, suggesting their owners have failed to keep up with mortgage obligations. There’s always the chance they can become current on their payments, but pre-foreclosures represent a great opportunity for today’s Salt Lake City real estate investors. If for nothing else, distressed homeowners are more likely to be motivated to sell, which bodes well for savvy investors who know where to look.
84104: 1 in every 1,149 homes is currently distressed
84128: 1 in every 1,196 homes is currently distressed
84120: 1 in every 1,384 homes is currently distressed
84116: 1 in every 1,428 homes is currently distressed
84118: 1 in every 1,683 homes is currently distressed
Salt Lake City Real Estate Investing
Investing in Salt Lake City real estate looks to be paying dividends for patient investors. Very few cities, for that matter, saw sellers realize higher home price gains from the time of purchase than Salt Lake City homeowners did in the first quarter of 2019. According to Attom Data Solutions’ latest Home Sales Report, qualifying the “cities with the highest average home seller returns in Q1 2019 were San Jose, California (84.1 percent); San Francisco, California (70.9 percent); Seattle, Washington (63.1 percent); Modesto, California (59.7 percent); and Salt Lake City, Utah (56.5 percent).” To put things into perspective, “the average home seller gain of $57,500 in Q1 2019 represented an average 31.5 percent return as a percentage of original purchase price,” said the report. That means Salt Lake City homeowners who sold in the first quarter of 2019 saw—on average—a return of 25% more than the rest of the country.
While Salt Lake City’s home price gains represent a wide variety of homeowners, price trends tilt heavily in favor of investors who got in at the right time. It is worth noting, however, that the time to invest in Salt Lake City real estate hasn’t passed. In fact, it looks as if there is plenty of room for appreciation. In the next year, Zillow expects real estate in Salt Lake City to appreciate by as much as 6.4%, which is 2.3% higher than the national average.
Price-conscious investors need not worry, either. Despite rapid appreciation rates in Salt Lake City, there are plenty of distressed sales to account for those who are looking for cheaper deals. Only one other city, in fact, saw higher increases in year-over-year distressed sales than Salt Lake City. According to the same Attom Data Solutions Home Report, “33 of the 135 metro areas (24 percent) posted year-over-year increases in the share of distressed sales, including San Antonio, Texas (up 22.2 percent); Salt Lake City, Utah (up 20.6 percent); New Orleans, Louisiana (up 11.8 percent); Indianapolis, Indiana (up 10.6 percent); and Raleigh, North Carolina (up 8.9 percent).”
Salt Lake City Real Estate Market Summary
The Salt Lake City real estate market has found itself the beneficiary of an appreciation rate that more than doubles the national average, and yet, demand remains largely intact. Despite increases in home values, more and more people are choosing to call Salt Lake City home, but I digress. As Salt Lake City’s population continues to grow, the addition of new renters are outpacing new owners. As a result, the rental market is surging, which bodes incredibly well for local real estate investors.
Have you thought about investing in the Salt Lake City real estate market? If so, what are you waiting for? We would love to know your thoughts on real estate in Salt Lake City in the comments below.
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