New-house permits hit high

The number of new-housing permits issued in Utah during the first half of 2005 climbed to an all-time high, fueling an unrelenting charge of new home construction from St. George to Logan.

Across the state, 10,165 single-family home permits were issued during the first six months of 2005. That's up 17 percent from 8,671 permits during the same six-month period a year ago and up 29 percent over the first six months of 2003, according to the University of Utah's Bureau of Economic and Business Research.

At 660 permits, St. George topped the list of Utah cities issuing the most single-family home building permits during the first half of 2005.

Jeff Reber, managing partner of St. George-based Real Estate Asset Strategies, describes the building activity in Washington County as a "feeding frenzy," with offers reaching 20 percent above asking prices for undeveloped land.

"The majority of what's driving this are Southern California and Las Vegas," Reber said. "Most of what I call the 'fast money' is coming out of Vegas. Some of the land values in Vegas and just land itself as a commodity has disappeared. And so you've got huge numbers of developers in the Vegas market that are without their primary commodity, and so they are looking north."

Reber said it is rare for potential homebuyers in the St. George area to find a one-third acre lot selling for less than $150,000. In Entrada, an exclusive subdivision five miles northwest of downtown St. George, one-eighth acre lots have been selling for $400,000.

Yet the building frenzy is not confined to southern Utah.

Lehi ranked second at 483 single-family permits. Herriman was in third place at 436 single-family permits.

Don Wallace, president of Salt Lake-based Sorenson Real Estate, which is developing a 2,900-unit subdivision in Herriman called Rosecrest, said demand is outpacing available supply.

"Every time we have a new plat that opens up we have demand for about double the lots we have available," Wallace said. "The demand out there has just continued to increase. In the first few years of our project a lot of people were skeptical whether that was the place to go or not. That's not the case anymore. It's just exploded."

Part of Rosecrest's appeal, Wallace said, stems from reasonably priced homes compared with east-bench properties. Homes at Rosecrest start at $185,000 and go as high as $900,000. The development already encompasses 1,300 homes and is adding 300 new homes a year.