While new-home production in the Greater Salt Lake market remained stable during the first three months of the year, builders continued to focus on reducing finished inventory, according to a report released Tuesday.

The report from Houston-based national housing market research firm Metrostudy indicated that during the first quarter of 2009, the Greater Salt Lake region saw only a 1 percent decline from the same period last year.

"New-home closings have been consistently greater than starts," Eric Allen, director of Metrostudy's Utah/Idaho region said in a news release announcing the figures.

New-home inventory in the Greater Salt Lake market has been steadily decreasing, bringing the supply of total detached-home inventory to a level that is now considered balanced between supply and demand."

The first-quarter report indicated total new-home inventory — which includes units under construction, finished vacant units and model homes — in the Salt Lake market stood at 7,488 units, for a 10.4-month supply.

At the end of the 2008 first quarter, total detached housing inventory — stand-alone, single-family homes — represented a 7.4-month supply, a drop of 46 percent compared to the end of the first quarter of 2007. There were only 1,430 units under construction, a low 3.1-month supply, at the end of the 2008 period.

According to the release, Metrostudy used finished vacant inventory as a fundamental indicator of the health of the new-home market.

During the 2009 first quarter, detached finished vacant inventory declined for the fifth consecutive quarter and stood at a 3.7-month supply, slightly above the balanced market level of two to 2.5 months, Allen said in the release.

Detached finished vacant inventory declined 39 percent from the first quarter of 2008 and 12 percent from the fourth quarter of 2008, he added.

The first quarter 2009 inventory of attached housing — such as condominiums or town houses — fell 10 percent compared to the same period last year, the report said, with the market supporting a 16.1-month supply of attached inventory in March.

The economic slowdown also has resulted in significant price reductions from builders, Allen said.

"This return to affordability is a healthy and necessary result of the housing downturn, as prices are falling in markets across the country," Allen said.

In the Salt Lake area, the supply of new homes is most noticeable among those priced in excess of $600,000. Those had a 13-month supply in March. The most aggressive price cuts came on homes priced above $300,000.

The area median price for a detached new home decreased 14 percent since March of last year to $301,445. The median price for an attached unit was $198,173, a 12 percent drop.

E-MAIL: jlee@desnews.com