RISMEDIA, Jan. 26, 2007-(MCT)-Only 21% of new houses available for sale along the Wasatch Front last year were priced below $200,000, a steep drop from 70% just four years ago, a new report shows. Many Utahns-especially buyers of entry-level houses with low to moderate family incomes and little cash-cannot afford houses priced at more than $200,000.
"We're just not building much in that price range at all anymore," said Eric Allen, director of Metrostudy's Utah/Idaho Region, which tracks home-building statistics in Salt Lake, Davis, Weber, Utah, Wasatch, Summit and Tooele counties.
In fact, he said about 43% of new-home production along the Wasatch Front and in Summit and Wasatch counties last year was in homes priced above $300,000.
Allen said the escalating cost of building materials and the rising cost of land throughout the Wasatch Front and Back play a large role in the rising cost of new houses.
One example of the rising costs is the massive Daybreak development in South Jordan. Although nearly one dozen builders are involved in the master-planned development, there are no single-family houses available for $200,000 or less. Many houses in the development start in the lower $200,000s, although many buyers spend more after adding upgrades.
The good news for buyers is that housing prices may level off a bit this year as the state and national economies show signs of slowing down.
"We're not seeing builders in Utah drop their prices dramatically but some are offering incentives to get buyers now," Allen said.
In states such as Arizona, Nevada and California, builders have offered free car leases and free upgrades such as swimming pools to get new buyers, he said.
"But Utah is nowhere near that point. We still have one of the strongest markets across the nation."
There are signs, however, that Utah's new-home market is headed in that direction.
Richmond American is offering $10,000 toward options and upgrades for buyers who meet certain criteria, such as selecting a mortgage company and insurance company affiliated with the builder. The company also is offering special deals on financing through its home loan affiliate.
Fieldstone Homes is offering a $2,000 incentive to buyers who use an affiliate mortgage company. It also is offering a $1,000-off coupon to buyers who meet certain conditions.
Salt Lake Board of Realtors President Gary Cannon notes that although the market for houses — new and used — priced at $250,000 and below is brisk, interest in houses priced from $400,000 to $800,000 is slowing down.
In the south end of the Salt Lake Valley especially, he said, inventory of higher-priced houses is growing. "It is the first time in a long while where we are starting to see price reductions and added incentives from new-home builders."
Copyright © 2007, The Salt Lake Tribune
Distributed by McClatchy-Tribune Information Services.
