Utah's housing market: Inventories growing, but prices holding their own

Utah's housing market remains among the strongest in the nation, but house sales are slowing and inventory across the Wasatch Front is growing, according to a new report.

While such a scenario would seem to set the stage for house prices to decline, the recent Metrostudy report indicates that is unlikely to happen any time soon.

"We just haven't seen a lot of price declines," said Eric Allen, director of Metrostudy's Utah/Idaho region. "There's other markets that are seeing big decreases in their actual home prices, but we're not seeing that in Salt Lake.

"There's some incentives and whatnot out there for buyers, but prices are stable."

The price of new houses continues to grow, according to the report. Houses priced below $200,000 accounted for just 17 percent of new home production in June. Two years ago, 48 percent of new homes were in that price range.

At the same time, production of new houses costing $300,000 or more grew from 23 percent to 49 percent of the market.

The study covers the Salt Lake market area, which includes Davis, Salt Lake, Summit, Tooele, Utah, Wasatch and Weber counties.

With 2,585 new vacant houses from which buyers can choose, inventory is still at a healthy level, Allen said.

"It is a great time for a homebuyer right now because they do have more options out there," he said. "They have choices now; they don't just buy the first thing they see."

Still, the number represents a 112 percent increase in the number of finished vacant homes compared to this time last year. That should be watched closely to make sure Utah doesn't follow the pattern of troubled housing markets across the nation with too many empty homes and not enough buyers, he said.

Luckily, Allen said, Utah's economy remains strong, with robust job growth and record low unemployment rates. "We're still creating a lot of new jobs, and we're able to put a lot of those people in houses right now."

High inventory in St. George has become a significant concern, however. A second Metrostudy report released this week noted a 50 percent decline in new house closings in the area and a 5 percent increase in total inventory in the past 12 months.

"I think the bottom line is, there were too many homes built in that market, so now we're going through the process of slowing production," Allen said.

As a result, he said, house prices in and around St. George and Mesquite, Nev., have dropped notably. "It's become very competitive down there."

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E-mail: awelling@desnews.com