Posted in Salt Lake City Market | Posted on 08-21-2014 | Written by Metrostudy News
August 2014: Metrostudy’s 2Q14 survey of the Greater Salt Lake market, annual new home starts – both attached and detached – totaled 8,209 as of June 2014, up 9% from the annual pace last year at this time. Annual new home closings increased 8% compared to last year, for a total of 7,742. New home starts during the first half of 2014 have decreased 2% compared to the same time last year. Annual starts for Single Family detached homes have increase 6% compared to last year, however down -4% from the annual pace recorded last quarter (1Q14). New home closings have increased 7% over the pace last year. Annual starts for Attached (for sale) homes have increased 20% over last year’s pace, and annual new home closings are up 11% from a year ago. While the sentiment regarding the housing market may be waning, evidence shows that the market remains strong.
“Affordability continues to have a stronghold on the market, limiting the number of consumers that are able to qualify for a home,” said Eric Allen, Regional Director of Metrostudy’s Utah/Idaho market. “Home prices have risen rapidly over the past year, which has pushed many first time home buyers to the sidelines, or in a rental holding pattern. However, recent figures show that price increases across the market have been less dramatic than the past year or so. The median price for a new Single Family home has increased 11% from last year at this time to about $325k, while up only 1% from last quarter.. The median price for a new Townhome unit is 7% higher than last year at this time to approximately $205k, and 1% above last quarter, and the median price for a Condo unit increased 8% from last quarter to $174k.”
As of June, there is a 6.6 month supply of single family detached home inventory in the Greater Salt Lake market, which is up from 6.3 months recorded at this time last year, however remains within equilibrium. Under construction inventory for detached homes rose 3% compared to last year at this time, however decreased -3% from last quarter; and currently sits at a 4.6 month supply. Finished vacant home inventory (or otherwise known as spec homes) has increased 49% from last year at this time, and up 18% from last quarter. Despite the increase, the supply remains healthy at 1.6 months, up from 1.1 months in 2Q13. So far, closings have kept pace with the market, resulting in a healthy level of finished vacant homes, however it will be imperative to monitor as we push into the second half of the year.
There is currently a 9.2 month supply of townhomes in the market, which is up from 8.3 months recorded in 2Q13. Under construction inventory has increased 10% over last year, and remains within equilibrium with 6.8 months of supply. Finished vacant inventory has increased 85% from last year, however the supply remains healthy at 2.0 months. New home inventory for Condos currently sits at 26.3 months, a level considered above equilibrium. Inventory of vacant developed lots (VDL), or finished lots, for single family detached homes declined 3% from last year, however increased 3% from last quarter to a total of 15,571. Based on current absorption, this is a 30.7 month supply.
“While the overall supply of lots appears to be above equilibrium, there are areas and specific projects in the market that continue to have a negative effect on this supply,” said Allen. “For instance, there are just over 5,500 vacant lots for homes priced above $500k, which represents an 80 month supply. This compared to the 17.2 month supply of vacant lots for homes priced from $200k-$350K, a level considered to be below equilibrium. Vacant developed lot inventory for townhomes decreased 6% from last quarter, which is a 16.8 month supply. There is also a 42.1 month supply of vacant lots for condos on the ground. There have been nearly 7,700 new lots delivered to the market over the past year, while builders have absorbed 8,209, for a net decrease of 514 lots.”
The Greater Salt Lake housing market has enjoyed a strong recovery and rapid growth since 2011, and with that, improvements have occurred in the economy and consumer confidence. While the housing market may not be expanding at the same pace as last year, momentum is expected to continue. The fundamentals of the economy remain strong, which keeps those in the housing industry optimistic about the future.
Top Ten Projects (based on new home starts / Attached & Detached)
Daybreak – 476
Rosecrest – 249
The Ranches – 205
Independence – 166
Foxboro – 161
Sleepy Ridge – 133
Bingham Junction – 131
Iroquois – 110
Herriman Town Center – 91
Stansbury Park – 88
For information contact Eric Allen @ 801.571.7700 x424
Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide. Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. www.metrostudy.com
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