If ever there were a time to look into buying a home this would be it, says Dave Harvey, president of the Utah Home Builders Association of Greater Salt Lake and owner of Harvey-Jenkins Realty and Construction, Inc.
"Right now," he says, "new-home construction costs are low, as low as I've seen them. The profit margin is such that the builders are just barely making it."What makes it possible for them (builders) to be competitive is that within the past year we've had a sizeable number of contractors and subcontractors move out of the state to look for work. The buyer's market has helped what builders there are. Their share of the market has improved.
"And what builders are left are the stable ones. They know the red tape of the building business and have been around for quite a few years. The ones that are here are on pretty solid footing.
"One thing is, you can't get the price any lower. You can't cut it down any more than it is. It (profit) just is not there right now. But that will change. I see homes going up in cost."
Looking at the market, he says he sees a recovery taking place in building and construction. One indicator is the increasing number of renters moving out to become home owners. He said vacancies are down and that with no new construction of apartments the past couple of years, renters are being pushed out into the housing market.
Another thing that has helped is that Utah has had some good, low-interest money available to first-time buyers. He says there has been a glut of homes on the market that were not selling. Those who bought the starter homes with low-interest loans are selling and moving up into this market, and new buyers are coming in to buy the starter homes.
There is also a sign that out-of-state people are moving in to buy. Harvey said that out-of-staters are discovering what a great bargain real estate is here in Utah.
"I'd say that about 15 percent of the buyers are coming in from out-of-state," he adds. "They are realizing that Utah is a great place to live and to buy a home."
For those in the market, Harvey suggests that they look at a builders reputation and customer service. They should check to make sure a builder has a good reputation, that he's been in business for a while, that he pays his subcontractors, and that he honors his warranties.
He did say that he sees a shortage of developed lots coming up in the future.
"There are not many subdivisions being developed right now. Those improved lots that are being sold were developed a couple of years ago. This is going to increase the price of homes in the future.
"Also, materials are going up . . . copper is up and so is lumber. Builders are trying to absorb these costs right now to make the homes more attractive with the higher interest rates, but they won't be able to do this for very much longer. Costs are going up.
"No, I see the price of homes going up, especially if the interest rates drop.
"If a persons is thinking of buying, then I would buy now. One thing about it, if you buy at a higher interest rates you can always refinances when the rates go down. But, you can't go back and buy a home at old prices."
With the tight market, and Harvey says this is the tightest market he's seen in the 20 years he's been in the business, some benefits to the consumer have come about. The newer homes being built, for example, have a new look. Builders are using new types of materials and new, exciting designs.
"You're seeing things today that were not around a few years ago. Builders are getting better designs and more attractive homes," he says.
Nationally, the average price of a home is about $85,000. Here in Utah, he believes, the figure is down around $72,000.
Last year there were 2,100 single family units build in Salt Lake County. Harvey expects about the same number to be built this year.