Posted in St. George - Mesquite Market | Posted on 11-06-2014 | Written by Metrostudy News
- Strong new home production growth in both markets continues to buck national trends.
- First time buyers are squeezed as home starts over $300k are up 62% over last year
- New Home Prices Continue to Rise: Median Price in St. George is $341k, up 10% YoY while Median Price in Mesquite is now $227k, up 52% YoY
November 2014: Metrostudy’s 3Q14 survey of the St. George and Mesquite housing market shows that while new home production in many regions nationwide has retracted for the past few quarters, St. George and Mesquite continue to buck that trend. According to Metrostudy’s quarterly survey, there were a total of 394 new homes started during 3Q14 in the St. George market (both attached and detached), up 35% compared to 3Q13, and 11% more than last quarter. New home closings totaled 389 during the third quarter, which is 31% more than last year at this time, and 25% more than last quarter. Annual new home starts have increased 42% compared to last year’s pace, for a total of 1,639 homes, a level not seen since before the recession. Annual closings totaled 1,474 as of September, which is an increase of 33% compared to the pace last year.
The Mesquite market area started 74 new homes during the third quarter of 2014 which is up from 52 (+42%) starts during 3Q13. Annual starts as of September totaled 235, which is an increase of 9% compared to this time last year when there were 127. Quarterly closings totaled 63 during 3Q14, up 58% from the 40 closings in 3Q13. Annual closings totaled 241, which is a 63% increase compared to the pace last year at this time
“The mix of buyers has been heavily weighted towards the move-up market, leaving the entry-level buyer somewhat depressed, due to increasing prices, interest rates and difficult lending conditions,” said Eric Allen, Director of Metrostudy’s Utah/Idaho region. “This trend continues as starts for homes above $300,000 increased 62% over last year, while starts under $300,000 are up only 16%.”
While new home prices have increased rapidly for the past few years, it appears that the pace may be starting to taper. The median price for a new detached home in the St. George market is $341,400, which has increased +10% from a year ago, however down 1% from last quarter. The median price for a new detached home in Mesquite is currently $227,800 which is up 52% from last year at this time, and up 8% from last quarter. The median price for an attached unit is $160,100
As of September, there is a 5.9 month supply ofsingle family detached homes in the St. George market, which is up from 5.0 months recorded at this time last year. Under construction inventory increased +49% compared to last year at this time, and up +15% from last quarter. This is a 4.1 month supply, which is up from 3.8 months recorded last quarter. Finished vacant home inventory has increased +60% from 3Q13, however down -8% from last quarter. This supply remains healthy at 1.4 months.
New detached inventory in Mesquite increased +4% from a year ago, and up +9% from last quarter. Currently, this is a 5.8 month supply, and well within equilibrium. Under construction inventory increased +63% from last quarter (24), which was a 1.5 month supply, to a current level of 2.1 months. There is currently a 1.8 month supply of finished vacant homes on the ground, down from 2.6 months in 3Q13.
Inventory of vacant developed lots (VDL), or finished lots, in the St. George market have increased +9% since last year to 5,531. Despite the slight increase in overall lot inventory, absorption (starts) has also increased, which has caused the supply to drop. Based on the current pace of absorption, there is a 40.5 month supply, down from 52.5 months recorded at this time last year, and down from 43.3 months last quarter. There have been 2,112 new lots delivered over the past year, compared to 696 in 3Q13. While lot inventory remains above equilibrium, the market has been in need of new replacement lots in the “A” and “B” locations. Vacant developed lot inventory in Mesquite decreased -6% from last year to a total of 1,559. At the current pace of absorption, this calculates to a 79.6 month supply, which is down from 156.4 months recorded in 3Q13.
“The St. George market continues to enjoy the expansion of the local economy and housing market, which have recovered nicely from the recession,” said Allen. “Metrostudy believes demand will remain steady for the remainder of 2014 and through 2015, as long as prices and interest rates remain relatively flat and employers continue to hire at a similar pace.”
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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