Utah housing booming

Utah's housing boom continued during the first half of 2006, although at a slower pace, as the number of new single-family housing permits issued climbed to an all-time high, according to a new report.

Across the state, 10,391 single-family home permits were authorized during the first six months of 2006, a 2.2 percent increase from 10,165 permits in the same period a year ago, according to the University of Utah's Bureau of Economic and Business Research.

Utah's increase in residential building activity comes as sales of new homes across the United States fell in June for the first time in four months.

James Wood, director of the U. bureau, called the latest numbers significant given the record level of activity the state experienced last year.

"We're basically pretty much on the level we were last year," Wood said. "I haven't heard any comments that builders are worried. I think we're lagging the country a little bit here, and it's still very strong."

But while permits for single-family homes in Utah rose, multifamily units — consisting of townhouses and condominiums — fell to 2,795 units in the first half of the year, a 12.3 percent drop from 3,187 units during the same six-month period in 2005.

At 747 permits, Lehi topped Utah cities, issuing the most residential building permits during the first half of 2006.

James Dixon, a Lehi councilman, said the building boom is the result of the city's vast open, developable land.

"There are many platted subdivisions throughout the city that are developing homes on them now," Dixon said. "It's not just Traverse Ridge. It's north, south, east and west, all points."

The total value of all residential permits — which include single-family homes, condominiums, townhouses, mobile homes, apartment units and cabins — in the first six months of 2006 reached $2.5 billion, up 15.1 percent from $2.2 billion during the same period of 2005, according to the U. report.

Residential valuations include the cost of materials and labor but not the cost of land or architectural fees.

Wood said the state is on track to reach the $5 billion mark in residential valuation by the end of this year, making up more than 6 percent of Utah's gross state product, which is valued at $80.4 billion, according to Jeff Thredgold, president of Salt Lake-based Thredgold Economic Associates and an economic consultant to Zions Bank.

Thredgold said the $5 billion forecast in residential valuation is consistent with the strength of Utah's housing sector in the past 18 months.

"Utah's economy is doing very well," Thredgold said. "Right now we are third in job growth. We're up about 55,600 jobs in the last 12 months. That's a growth rate of 4.8 percent."

Thredgold said Utah is not only adding a lot of jobs but also a number of higher-paying jobs.

"That lends itself to stronger housing activity and more in the way of middle to higher-end housing construction," Thredgold said. "If we're creating jobs, that's one thing. If we're creating a lot of good jobs, that provides obviously more capacity for people to build."

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