By: James Wood
Several housing market indicators suggest Utah may have a housing shortage:
- Home sales are hot. In the past two and a half years, the typical “for sale” home sold in 25 days.
- Prices of “for sale” homes continue to climb at a brisk pace. Home prices along the Wasatch Front counties are up nearly 25 percent in three years, pushed up by demand running ahead of supply.
- The number of new listing of “for sale” homes have been disappointing. Sharply rising prices generally bring more sellers into the market and boosts the number of listings but listings have lagged well below demand limiting home buyer choices.
- Apartment vacancy rates are at the lowest level in decades despite the historic apartment boom. The boom has added 20,000 units statewide since 2012, a seven percent increase in the rental inventory but the rental market remains extremely tight.
- Apartment rents are increasing at five to eight percent annually in many markets and rents have topped $2.00 a square foot in downtown Salt Lake City and Sugarhouse. To date, however, there has been very little market resistance to high rents.
- Home builders have virtually no unsold inventory and are producing at full capacity.
- The supply of new homes is held back, according to builders, by serious labor shortages, high land prices, and municipal zoning, fees and regulations.
And then there’s the recently released demographic data by the Kem C. Gardner Policy Institute, perhaps the most compelling indicator of a housing shortage. The demographic data, in this case household growth, identifies the likely cause of a housing shortage rather than adding to the list of symptoms given above. Acco