SOURCE: Utah Economic& Business Review, Volume 65 Numbers 11 & 12, pp. 9, Bureau of Economic & Business Research

It's not just the temperature that is on the rise this time of year. So are home values. A check of the local Multiple Listing Service statistics shows a general increase going on all over the valley. The latest report is produced by zip code. While the Salt Lake County average was 16.7%, some areas saw even greater rises in home prices. For example zip code area 84102 was up 20.8%, 84103 increased by 25%. 84101 saw values climb by 28.5%. The highest increase was reported in zip code 84015, up a whopping 32.1%. All other counties in the Wasatch Front area experienced similar increases.

What this means, besides an increase in property taxes, is that a home valued at $250,000 last year in area 84015 is now valued at $330,250. And by all projections it looks like the Wasatch Front is going to continue to benefit from home appreciation for the remainder of 2006.

So what are you going to do with this newfound money?

There are basically three things you can do with it. The first requires no effort at all. Do nothing about it. Let the money stay in your home. Don't use it or spend it. Keep it for later.

Second, you can borrow against that increase to finance additions and modifications to your home. Using the money in this manner can actually further increase the value of your home.

Let me give you an example. A recent study of the east bench area homes comparing prices and features found that homes with 4 or more bedrooms, at least 2 full baths, and an updated kitchen increased the home value by more than the average costs of the construction when expanding from 3 bedrooms. It is best to consult with a Realtor to verify the potential resale value of your home with the planned improvements as you plan your remodel. Each home presents unique design issues that may affect the actual costs of construction.

The third choice is to use the equity to purchase income producing real estate. Using this newfound money as the down payment on one or more rental properties has the potential of generating income today, possible tax deductions, and additional appreciation in the future. This is not for the timid and you should consult with your tax professional before you do this sort of investing . Appreciation in the future is always speculative and not guaranteed.

Knowing that your home is worth more is always good for the ego and makes for good conversation at dinner parties. If you would like to know more about your home's value or these options, contact your favorite local Realtor or call Ron Bentley of First Utah Realty at 801-592-9604.

© 2005 Renovation Design Group.