State economic outlook strong
Home in Utah have increased in value. In a 12 month period ending in March home values increased 17.01 percent, ranking Utah first in the nation in home appreciation. The increase in economic growth and net - migration is responsible for this rise in home values.
Provo-Orem and Salt Lake City had an increase of 19.67 percent and Ogden-Clearfield showed an increase of 15.70 percent, with Logan recording a modest rise of 10.28 percent.
St. George had much greater gains in 2004 and 2005, but in 2007 still recorded a 4.25 percent increase.
In a five year period, competing with the west, east and southwest markets which saw declines, the Utah market rose 48.29 percent. The average home value rose across the United States 53.53 percent in that same five year period. The limited labor availability in Utah may slow the states economy in the next 12 to 18 months. However, Utah should continue to keep up with the best in the nation. The price of housing in Utah is likely to moderate, but the outlook looks promising.
Current home prices have experienced a drop in the real estate market on both coasts and in the southwest. The interior west real estate market may experience more strength because of this situation.
Wages will also change in Utah this year. The minimum wage in the state has been $5.15 since September 1, 1997. Plans for an increase in this wage is set for three steps as set forth in legislation enacted by congress. In the next two years, beginning July 24 2007, the wage will increase from the current $5.15 to $5.85. In 2008 it will move to $6.55 and finally to $7.25 ending July 24, 2009.
The demands for products produced in Utah is increasing. Over 2000 Utah companies exported goods last year to almost 200 countries in Europe, Canada and Asia. In the last 12 month period, Utah has added almost 54,000 new jobs, with a current growth rate of 4.5 percent. But the high demands for labor in Utah has caused the unemployment rate to experience a record low, averaging 2.4 percent. This is the lowest average in the country.
Employers of the smaller companies are facing challenges because of these factors. Competition for employees is increasingly tougher because it is difficult to match the salaries and benefit packages of the larger companies. The economic outlook in Utah will likely improve. Tighter labor availability, soft coastal housing markets producing more solid interior performance will aid in the declining budget deficit. In addition to modest inflation and stability in long and short term interest rates, will aide Utah in the global marketplace.