The Salt Lake City Housing Market
February 23, 2005
Single-family homebuilding was the bright spot for Utah construction activity in 2003 rising 14.2 percent from 2002. Permits were issued for 16,515 new single-family homes. Residential valuation stood at a record $3.0 billion through December, due in large part to the strength of the single-family construction market.
Local real estate professionals feel cautiously optimistic about the housing market. The caution comes from the possible increase in mortgage rates, pent up housing demands released during the active 2003 construction season, a prolonged war on terrorism (and Iraq), and rising oil prices. Local housing markets' performance is also affected by uncertain economic and political policies, consumer confidence, wages and job stability.
In 2003, Salt Lake County continued to be the center of residential construction activity in Utah. One-third of the 4,909 new single-family homes constructed were located in the county, mostly in the fast-growing suburbs. This represents a 33.1 percent increase from the 3,687 homes in 2002. Home prices rose 0.45 percent from the second quarter to the third quarter of 2003, according to the Office of Federal Housing Enterprise Oversight's House Price Index. Although Utah had a higher percentage increase in value than three other states, Utah still had the lowest increase in housing prices for the year-ending at 1.8 percent. According to Robert Farnsworth of the Salt Lake Board of Realtors, "We're starting to see a little bit of appreciation now." He states that the lack of appreciation stems from mounting job losses in Utah in recent years. "Jobs buy houses," he said. "If we have any type of positive job growth, we'll start to see more appreciation." Nationally, home values have increased at 6 percent, which was a 3.3 percent decrease from 9.3 percent in 2002.
Looking on the bright side, real estate experts predict that Salt Lake area home sales and prices are likely to improve. While employers in Utah are not yet hiring in mass numbers, fewer large-scale cutbacks and consolidations have taken place.
Local real estate professionals feel cautiously optimistic about the housing market. The caution comes from the possible increase in mortgage rates, pent up housing demands released during the active 2003 construction season, a prolonged war on terrorism (and Iraq), and rising oil prices. Local housing markets' performance is also affected by uncertain economic and political policies, consumer confidence, wages and job stability.
In 2003, Salt Lake County continued to be the center of residential construction activity in Utah. One-third of the 4,909 new single-family homes constructed were located in the county, mostly in the fast-growing suburbs. This represents a 33.1 percent increase from the 3,687 homes in 2002. Home prices rose 0.45 percent from the second quarter to the third quarter of 2003, according to the Office of Federal Housing Enterprise Oversight's House Price Index. Although Utah had a higher percentage increase in value than three other states, Utah still had the lowest increase in housing prices for the year-ending at 1.8 percent. According to Robert Farnsworth of the Salt Lake Board of Realtors, "We're starting to see a little bit of appreciation now." He states that the lack of appreciation stems from mounting job losses in Utah in recent years. "Jobs buy houses," he said. "If we have any type of positive job growth, we'll start to see more appreciation." Nationally, home values have increased at 6 percent, which was a 3.3 percent decrease from 9.3 percent in 2002.
Looking on the bright side, real estate experts predict that Salt Lake area home sales and prices are likely to improve. While employers in Utah are not yet hiring in mass numbers, fewer large-scale cutbacks and consolidations have taken place.
posted by Jim McIntosh at 8:22 AM
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