Half of Utah population unable to buy even average priced home
The housing situation in Utah and Millard County is bleak.
It’s constantly mentioned at local public meetings these days.
It was mentioned at last week’s county planning and zoning special meeting, for example, where amendments to Intermountain Power Project’s conditional use permit—the board enumerated all of the impacts the county wanted mitigated as part of the project’s switch to hydrogen and natural gas—were voted upon and sent to the county commission with a positive recommendation.
Among the big questions, of course, was where the housing for the thousand-plus workers set to stream into Delta in the next year or two was going to come from.
The same conversation is taking place in Fillmore.
New businesses and new jobs are on the horizon. Growth is traveling up and down Interstate 15 and is set to alter the character of that city. But where are all these people going to live?
Even now, jobs are plentiful on both sides of the county—but scant housing availability is keeping many from filling those positions.
There simply is no where to live and not enough new housing on the horizon to make much of a dent.
A new report published by the Kem C. Gardner Policy Institute at the University of Utah illustrates what is happening locally and statewide. Titled the “State of the State’s Housing Market,” the research report represents the inaugural effort to better understand what is happening in Utah’s housing market and how it is affecting the state’s growing population. The policy institute plans to publish similar research and market analysis each fall.
Among the report’s more startling findings is that housing prices have risen so fast in the past year, that now more than half of the state’s population can’t even afford a median-priced home. And the number of current renters totally priced out of home ownership grew from 63 percent in 2019 to almost 73 percent in 2020.
“Home prices in Utah have a history of rapid acceleration,” the report states among its key findings. “In the second quarter of 1994, the state led the country with an 18.3% increase in prices, and led again in the second quarter of 2006 with a 17.2% increase. But both these price spikes pale in comparison with the 2021 second-quarter increase of 28.3%, which ranks second among all states.”
Utah was outpaced only by Idaho, which saw home prices increase by more than 37 percent on year-over-year second quarter comparisons between 2020 and 2021.
Much of the rocketing rise in home prices is mostly being felt in Utah’s urban centers.
“Of Utah’s 15 cities with more than 50,000 population, 11 experienced price increases greater than 30%,” according to the housing analysis. “Certainly for most, if not all of these cities, the gains were record-breaking. Thirty percent price increases were unheard of in Utah before 2020–2021.”
Even in rural areas such as Millard County, prices rose by double-digits, locally by 11.5 percent between the January-to-June quarter in 2020 and the same period in 2021, according to the research report. This county actually might count itself lucky in that regard—housing prices rose 43.3 percent during the same period in Beaver County, 32.8 percent in neighboring Juab County and 48.6 percent in Sevier County.
Adam Richins, the county planner who also inspects new construction, said the demand for new housing in Millard County is outpacing local contractors’ ability to get projects finished.
According to the research report, the pandemic and disruption in the supply chain for construction materials—the report notes 30 percent of residential construction materials is imported from China—has exacerbated an already dire situation.
One local contractor said he is more busy now than he has been in almost 45 years in the construction business.
Bevan Johnson and his B&J Construction Inc. in Fillmore is a full-service home builder. He says while he hasn’t suffered the supply problems some of his colleagues in more populated areas have, he does have plenty of projects waiting for his workers to get to them.
“I’ve been at this over 40 years, and I’ve myself never seen it this crazy busy,” he said. “We had nine homes all going on at one time last summer. We currently have five going, standing in line waiting for us to get to them. It’s a good busy for us.”
Johnson said he credits local outfit Roper Lumber for keeping his company in materials.
“A lot of the challenges that have come to our friends and associates outside of the area, I’ve not seen them. Shortage of materials, I’ve been able to get lumber, I’ve been able to get concrete, our suppliers here have done a magnificent job,” he said.
Johnson said if anything he is most concerned today with the lack of younger tradespeople joining the building professions. He lamented that schools across the country are eliminating shop-type programs and essentially reducing the number of younger people entering the construction workforce at a time when older builders are leaving and retiring.
“We’re going to suffer this one for a long time, for many years to come,” he said. “There is a huge shortage of tradesman right now that gets worse everyday. The number of people retiring, there’s nobody to replace them,” Johnson said.
While new home construction is limited by materials pricing and the availability of contractors to do the work, the existing home market is downright nuts.
“Even the wildest days of the 2005-2007 real estate boom can’t match the past 12 months, with the bidding wars, lack of inventory, offers above listing prices, and plummeting days on market,” according to the State of the State’s Housing Market report. “By the summer of 2021, the median days on market was only six—that’s six days from the time a home was listed until an offer was accepted.”
In 2006, the median number of days an existing home was on the market was just more than two weeks. In the summer of 2020, it was exactly two weeks.
“No other statistic is a better measure of the growing imbalance between housing supply and demand than the median days on market. Six days on the market sends a strong signal of a severe housing shortage,” the research report noted.
Similarly in Millard County, real estate buyers and agents both have watched a microcosm of this, as inventory has dwindled, prices risen and listings appear and then disappear in a matter of days.
And the biggest finding of the research report, taking all of it into account is that this situation is simply unprecedented for the state.
You can access a copy of the housing market report online by going here: https://gardner.utah.edu/wp-content/uploads/StateOfState-Oct2021.pdf.
