Posted in Salt Lake City Market | Posted on 11-04-2014 | Written by Metrostudy News
- Production at lower price points is dropping, with annual starts under $300k down 19%
- Median price for a new Single Family home is up 9% YoY to almost $331k
- Attached homes are the shining star in the market with starts up 15% on an annualized basis
November 2014: Metrostudy’s 3Q14 survey of the Greater Salt Lake market shows that while the housing market has been experiencing some slowing in the last few quarters, new home production remains healthy. According to Metrostudy’s quarterly survey, there were a total of 2,125 new homes (both attached and detached) started during 3Q14, which is a 16% decrease compared to 3rd quarter last year, however increased +13% from 2Q14. Closings for the quarter dropped 1% compared to last year and increased 9% from last quarter, for a total of 2,049. The pace for annual new home starts has declined for the past two quarters, causing a bit of concern within the industry. Annual starts totaled 7,739 at the end of September, -3% fewer than last year at this time.
Annual new home closings have increased 4% compared to 3Q14, however the pace slowed 0.3% from last quarter, to 7,694. Annual starts for Single Family detached homes have decreased 7% compared to last year at this time for a total of 5,711. However, new home closings have increased 3% over 3Q13 for a total of 5,734.
Attached (for sale) homes continue to be the shining star in the market with a +15% increase in annual starts over last year with 2,028. Annual new home closings totaled 1,960 as of the end of September, up 8% over last year at this time.
Annual New Home Starts By Price Range
“The mix of buyers has been heavily weighted towards the move-up market, leaving the entry- level buyer somewhat depressed, due to the rapid increase in prices and difficult lending environment,” said Eric Allen, Director of Metrostudy’s Utah and Idaho region. “This trend continues as annual starts above $300,000 have increased +17% over last year, while the pace has decreased -19% for starts under $300,000. While new home prices have increased very rapidly for the past few years, the pace appears to be slowing ever so slightly. The median price for a new Single Family home has increased +9% from last year at this time to $330,900, and is +1% above last quarter. The median price for a new Attached unit currently sits at $208,400 which is +7% higher than last year at this time, and +1% above last quarter.”
As of September, there is a 6.7 month supply of single family detached home inventory in the Greater Salt Lake market, which is down slightly from 7.0 months at this time last year, and up slightly from the 6.6 months recorded last quarter. Under construction inventory decreased 9% compared to last year at this time; however increased 4% from last quarter, and currently has a 4.8 month supply. Finished vacant home inventory has increased +32% from last year, however decreased -7% from last quarter to a 1.5 month supply. This is up from only 1.1 months at this time last year, and down from 1.5 months last quarter. There is currently a 9.0 month supply of townhome units in inventory,,which is up from 8.7 months recorded last year in 3Q13. Of this, 912 are under construction, a 6.5 month supply. There are also 273 finished vacant units on the ground, which is up +34% from last year, and is a healthy 2.0 month supply. Condo inventory totaled 732 units, which is a 30.2 month supply.
Inventory of vacant developed lots (VDL), or finished lots, for single family detached homes have recently leveled off with 15,343, virtually unchanged from last year. While overall lot inventory is essentially unchanged over the past year, lot deliveries have increased to the highest levels since 2009,” said Allen. “There have been 7,773 new lots delivered over the past year, compared to 4,893 in 3Q13. Despite the spike in deliveries, lots are being absorbed quickly, particularly for homes priced from $200,000-$400,000, where the supply remains within equilibrium at 19.2 months, while lot inventory for homes above $400,000 is 54 months.”
“Metrostudy expects demand to remain relatively steady for the next year, despite the pressures from lack of supply, rising prices and the possibility of increased interest rates,” said Allen. “The market is simply experiencing a cooling off period, coming off the heels of one of the most rapid recoveries on record.”
For information contact
Eric Allen 801.571.7700 x424
Metrostudy is the leading provider of primary and secondary market information to the housing and related industries nationwide. Metrostudy provides research, data, analytics and consulting services to help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. For more information, visit www.metrostudy.com
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