Posted in Salt Lake City Market | Posted on 03-02-2015 | Written by Metrostudy News
- Despite a slowdown in 2014, the Salt Lake City housing market remains one of the healthiest in the country
- The supply of resale homes is at the lowest level seen in the market since prior to the recession
- Tight supply is a double edged sword – even as it pushes buyers into the new home market it increases prices there, and many cannot qualify
March 2015: Metrostudy’s 4Q14 survey of the housing market in the Greater Salt Lake region shows that despite a slow 2014, the market remains one of the healthiest in the country. New home production for both attached and detached new homes in the Greater Salt Lake market has experienced a decrease for the past 3 quarters. There were a total of 7,576 new home starts in 2014, which is a 9% decrease compared to 2013. However, with that said, the market averaged a 30% increase from 2012 through the first half of 2014; therefore, it is no surprise that the pace has tapered off.
New home closings for the year totaled 7,502, a 4% decrease from last year. 4Q14 starts totaled 1,953, down 4% from 4Q13, and 3% from 3Q14. New home closings took a slightly larger hit during the fourth quarter of 2014 for a total of 1,860, which is a 9% decrease from last year, and 8% from last quarter. Annual starts for Single Family detached homes totaled 5,566 for 2014, down 12% from 2013. Starts during the fourth quarter are down 3% from last quarter to 1,387. Annual starts for Attached (for sale)homes totaled 1,999 for 2014, a 1.2% increase over last year. Starts during the fourth quarter totaled 594, which is up 10% over this time last year, and up 38% from last quarter.
New Home Inventory & Month Supply
“According to the Wasatch Front MLS, the supply of used homes in the Greater Salt Lake market is at the lowest level seen in the market since prior to the recession,” said Eric Allen, Director of Metrostudy’s Utah/Idaho region. “New listings in December totaled 4,680, 13% less than December of 2013. This tight supply is a doubled edge sword. While pushing buyers into the new home market, due to the lack of available homes, prices continue to rise, making it difficult for buyers to qualify for those homes. Annual closings for used homes during 2014 totaled 31,268, a 4.8% increase from 2013. However, the average days on market has increased to 65 days, up from 56 last December.”
Mortgage qualifications have been a challenge for the past few years; however Fannie Mae and Freddie Mac have indicated that lending requirements may be loosening throughout the year, which could provide a new surge in the housing market. It appears that new home prices in the Greater Salt Lake market may have finally begun to peak, which will also have a positive impact on housing.
The median price for a new Single Family home is currently $330,720, which has increased 5% from last year at this time. The median price for a new Attached unit is currently $216,000 which is a 9% increase compared to this time last year, and 3% above last quarter.
New home inventory for Single Family Detached homes has been slowly increasing over the past year, however remains well within equilibrium at 6.8 months. There are currently 704 finished vacant homes on the ground, a 33% increase over this time last year. There are currently 1,356 townhome units in inventory, a 10.0 month supply, up from 8.6 months in 4Q13. Of these, 999 are under construction, a 7.4 month supply. There are also 302 finished vacant units on the ground, which is up 71% from last year. Condo inventory totaled 481 units, which is an 18.2 month supply.
Inventory of vacant developed lots (VDL), or finished lots, for single family detached homes has begun to increase once again. Compared to last year, VDL inventory increased 5% to a total of 16,248 lots. Currently the supply is 35 months, up from 29.2 months at this time last year. There were 6,658 new detached lots delivered to the market in 2014, a 48% increase over 2013, however the market is still in need of good, desirable lots. Vacant developed lot inventory for townhomes increased 2.4% from last year to 2,773, which is an 18.6 month supply. There are also 780 condo lots on the ground, which is a 39.7 month supply.
“While new home production waned for 2014, Metrostudy expects demand to remain relatively steady for 2015,” said Allen. “With lending qualifications projected to loosen, a strong job market, along with the possibility of slower rising home prices, many indicators suggest the market will continue to remain healthy.”
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