12 December 2006

Tooele County Market Report 2006

As we approach the end of the year, I've been reading lots of news items telling about the "recovery" of the housing market in '07. It occurred to me that I'm not sure I want to recover more than we have in 2006!

Let me give you some of the growth and appreciation numbers from this year.

As we all have heard, (and some have experienced) we had some fairly amazing appreciation. I was taught early on in my career that a 3-5% increase per year was fairly normal. More than that was icing on the cake. What do you suppose 20% would be considered?

As of this moment, according to the Wasatch Front Regional MLS, for year to date '06, our average selling price stands at almost $174,000, or a 22% increase over '05. Keep in mind, '05 finished almost 12% higher than '04! So we are talking about over 2 years of amazing appreciation in Tooele County, only rivaled by Washington County (St. George).

In addition, the average days that a home stays on the market has dropped from 59 days in '05 to 39 days this year.

But here's the one that really got to me: Average Listing price right now for a new listing is over $190,000! I don't know how long we can stand this kind of housing "recovery", but I suspect it will correct itself soon.

I'm not talking about a reversal by any stretch of the imagination. People will always want to move here because this is an amazing place to live and raise your kids. But I would expect a return to a more sustainable rate of 5-10% for the next year or so, simply because the market is driven from the bottom up. What I mean is, the 80k buyer moves up to the 120k house whose owner moves up to the 180k house and so on. The problem is becoming a matter of not having any 80k houses! Or, frankly, 120k houses either!

So while I expect 2007 to be another wonderful year in Tooele County Real Estate, I would not be shocked to see something of a slowdown. Now, don't panic if this proves to be the case. Remember, appreciation could drop in half and still be twice what has always been considered a "healthy" rate. Remember that when the media is talking about a "housing recession" next year!

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