Should You Be Worried About a New Housing Bubble?

If you’re concerned that we might be looking at a new housing bubble, here are some market statistics to put your mind at ease.

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Are we looking at a new housing bubble here in Utah?

It’s a question a lot of people are asking because—in case you didn’t know—home values in Utah have risen 48% in the last five years. That is absolutely unprecedented, and it has some people worried.

The good news is that according to renowned economist James Wood, there is no sign of another housing bubble happening in Utah anytime soon. Why? There are a couple special characteristics of a housing bubble that aren’t present in Salt Lake County and Utah County.

That first is a rapid rise in household debt. For example, in the three years preceding the great recession of 2008, household debt rose 35% in our state. That rise was primarily due to the refinancing of existing mortgages, taking out home equity lines of credit, or picking up a second mortgage. There is currently no sign of that happening here. Our debt load is very healthy.

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There are many indicators that prove we’re nowhere near a housing bubble.

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The second characteristic of a housing bubble is a lack of affordability. To determine affordability, we look to the Housing Affordability Index. For a frame of reference, if the index is at 50, that’s considered a nice, healthy market. Right before the market crash, the affordability index in Utah was at 30, which is well below a healthy mark. As of the end of 2016, our affordability index was a whopping 70, which is one of the best in the country.

There are two more indicators specific to Utah that prove there’s no bubble in sight.

The first is the fact that we’re experiencing a housing shortage. We have a larger number of households in Utah than actual housing units. In other words, there are more people who want homes than there are homes available. This is quickly driving up prices for both homes sales and rentals. However, we’re still well within affordability limits.

The other indicator is the condition of our state economy. From 2000 to the middle of 2016, the entire country had a job growth rate of 11%. In Salt Lake County, our job growth rate was 33%. In Utah County, the job growth rate was 35%.

I hope that puts your mind at ease. If you’re looking to buy or sell or you have any more questions about this topic, please don’t hesitate to reach out to me. I’d be happy to speak with you!

The Lesser-Known Tax Benefits of Owning Property

Tax season is right around the corner, so today, I want to highlight some potential tax breaks you should ask your tax professional about.

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Tax season is nearly upon us, so today, I wanted to touch on some of the lesser-known benefits of owning a home.

Let me start by saying that I’m not a CPA, and I recommend that you get your taxes done by a professional. These items are merely things you can bring to their attention to possibly write off on your 2016 taxes.

1. Interest paid on your mortgage. Everyone knows about this one, but did you know in some cases, you can write off taxes on your taxes? If you pay state or federal taxes, you may be able to include them on your 2016 return.
2. If you have made any improvements to your property for medical reasons, the cost may be a tax deduction.
3. If you use a portion of your home for a home-based business, you can get an additional write-off. I know at least here in Utah, many people have things like a salon or a multi-level marketing business on the side. If you run a business out of your home, be sure to talk to your CPA about it because there is a healthy tax break you may be able to claim.



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If you use a portion of your home for a home-based business, you can get an additional write-off.

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4. If you purchased a home last last year, part of the expenses of purchasing that home are also items you can write off. You’ll need a copy of your settlement statement, but if you can’t find it, give your agent a call or go to the title company that closed the transaction.
5. If you sold a home in 2016, you might not have to pay taxes on your profits. Did you own the home for more than two years? If you did own the property for more than two years, was it your primary residence, and if it wasn’t, did you at least occupy the home for two of the last five years? If you can answer ‘yes’ to both of those questions, odds are you won’t have to pay taxes on your home sale profits up to first $250,000 worth of profits if you’re single, or $500,000 if you’re married.

Hopefully this is some good news for you! If you have any other questions, don’t hesitate to give me a call or send me an email. I’d love to help!

Don’t Miss These 5 Holiday Events in Utah

Want to enjoy some holiday festivities without spending your brains out this Christmas? I have five ideas that are both fun and budget-friendly for families to do this season.

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Today I wanted to give you five cool ideas for things you can do this Christmas in Utah that don't involve spending a ton a money. Here are some alternatives that won't leave you waking up on December 26th with a spending hangover:

1. Sledding at Big Cottonwood Canyon. In my opinion, this is the number one sledding hill in the state. It's a ton of fun.
2. The Midway Ice Castle, a short drive outside of Salt Lake City. The ice castle looks simply amazing, and it has a light show and ice skating. It will be up and running again this year.
3. The Heber North Pole Express. This is another close drive just outside of Salt Lake City. You can ride this really cool train with your kids and taste hot chocolate and all kinds of treats. Santa usually makes an appearance, too.
4. Visit Temple Square downtown. It's becoming world famous because of how gorgeous it is during Christmas. Do yourself a favor and take TRAX down because parking gets crazy down there.
5. Volunteer at a soup kitchen. Your whole family can take some time to help out for a good cause. You'll feel better about yourself and the holiday season.

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I promise you'll have a great time without breaking the bank.

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If you and your family check out any of these fun things to do in Utah, I promise that you'll have an awesome time this season without breaking the bank. If you have any other questions about these activities or about Utah area real estate, you can always give me a call or message me through my website. I look forward to talking with you soon!