New home prices in Utah soar

Looking to buy a new home in the greater Salt Lake market? Get ready to pay a lot more.

High demand, soaring land prices and expensive building materials are pushing new home prices to record levels, according to a report released Wednesday by Metrostudy, a Houston-based real estate research company with offices in West Jordan.

The median price for a new single-family home in the greater Salt Lake area rose to $282,000 in the second quarter, a roughly 24 percent increase from the median price of a new home in the second quarter of 2005.

In fact, nearly one of every four new single-family homes for sale in the Salt Lake region in the second quarter had an asking price of $300,000 to $399,000. Just a year ago during the same quarter, one of every four new single-family homes in the Salt Lake area was priced at $150,000 to $199,000, the report said.

The greater Salt Lake region includes Davis, Salt Lake, Summit, Tooele, Utah, Wasatch and Weber counties.

In this year's second quarter, 18 percent of all new homes for sale were priced above $500,000, compared to 11 percent priced above the half-million-dollar mark in the second quarter of 2005.

Only 1 percent of new single-family homes in this year's second quarter were priced from $120,000 to $149,000. No new homes in the second quarter were priced below $120,000.

While prices continued to soar, so too did the number of unsold new housing units.

In the second quarter, total unsold new housing inventory in the Salt Lake region climbed to 12,102 units, a 29 percent increase from 9,418 units in the same quarter in 2005.

New housing inventory includes units under construction, finished vacant units and model homes, and consists of single-family and multifamily units.

Eric Allen, director of Metrostudy Utah, said while unsold housing inventory has increased, there is no cause for alarm.

"It's still very low," Allen said. "It's still healthy. It's not at an out-of-control rate."

Total housing inventory in the second quarter represented a 9.7-month supply, meaning that if no new homes were started, it would take 9.7 months to sell the current new housing inventory.