GREATER SALT LAKE CITY HOUSING 1Q19: As Affordability Struggles Continue, Attached Product Gains Momentum
- Annual new home starts are up 2% year over year, while quarterly starts are down 11% from 1Q18 levels
- Much of the decrease in quarterly starts can be attributed to the decreasing availability of lower priced homes
- Currently only 28% of all new home starts are priced under $300k – and most of them are attached product.
According to Metrostudy’s most recent quarterly lot by lot survey of every subdivision in the Greater Salt Lake City market, annual new home starts totaled 12,975 as of March, which is a 2% increase compared to the annual pace in 1Q18. Annual new home closings have increased 10% compared to this time last year to 12,404, and appear to be climbing. New home starts for Single Family detached product totaled 1,170 during 1Q19, which is down 12% compared to 1Q18. Annual starts are nearly unchanged compared to last year at this time for a total of 8,760. New home closings during the first quarter decreased 2% from 1Q18 to 1,864, while annual closings increased 6% compared to last year to 8,485. On a quarterly basis, new home starts during the first quarter of 2019 saw an 11% decrease compared to 1Q18 and are down 15% from last quarter to 2,586.
“While the quarterly numbers may seem alarming, part of the decrease is due to seasonality, and another part is due to the decreasing availability of lower priced homes,” said Eric Allen, Regional Director of Metrostudy’s Salt Lake market. “Currently only 28% of all new home starts are below $300,000, most of which is for attached product. New home closings during the first quarter totaled 2,776, which is a 10% increase over 1Q18, however down 14% from last quarter.”
New home starts for Townhomes in the first quarter of 2019 decreased 12% compared to 1Q18, however closings for the quarter jumped 45% from the same time last year. Annual starts are up 13% year over year to 3,661 and closings increased 24% to 3,309. Annual starts for Condominium units as of March decreased 20% compared to the annual pace in 1Q18 to 554, however annual closings increased 2% compared to the same time for a total of 610.
As the Greater Salt Lake housing market continues to battle with affordability, attached product (such as townhomes and condos) is gaining acceptance and momentum. Currently, 33% of all new home starts in the market are for attached units, which has grown from 25% just 5 years prior. The median price for a new Attached home in the market is now $276,100, which is a 7% increase compared to last year at this time. The median price for a new detached home has also increased 7% over the past year to $395,700.
According to the Wasatch Front MLS, used home sales for the past twelve months dropped 3% for a total of 38,639 as of March. Currently there are approximately 6,537 used homes listed for sale, which is a 2.0 month supply, up from 1.5 months at this time last year, and unchanged from last month. While we anticipate the market to become a bit more volatile, Metrostudy does expect demand to remain strong through 2019. Interest rates are projected to remain stable, however this will take some urgency away from buyers. It will be imperative to manage costs and monitor inventory as we progress throughout the year.
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About Metrostudy: Metrostudy is the leading provider of primary and secondary market information to the housing and residential construction industry. Metrostudy’s actionable business intelligence informs investment decisions that mitigate risk and grow revenue for builders, developers, lenders, suppliers, retailers and manufacturers. It’s the construction industry’s only integrated data intelligence solution supported by the most extensive U.S. geographic coverage. Learn more at www.metrostudy.com
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