Metrostudy has released data from their 1Q17 survey of the Salt Lake City housing market - and the results show affordability pressures rising even as labor shortages threaten future home production.

Regional Director Eric Allen's report highlights include:

  • 1Q17 New Home Starts Experienced a slightly Deeper than Normal Seasonal Decrease – Down 16% from 4Q16 but up 8% over 1Q16 levels
  • Through 1Q17, Annual New Home Starts are up 14% YoY
  • The rapid increase in prices and severe lack of available labor continue to be the biggest strains on the Greater Salt Lake housing market; with the pressures of high land prices, low labor and high demand from out of state buyers, controlling costs is very difficult for builders

“The rapid increase in prices and severe lack of available labor continue to be the biggest strains on the Greater Salt Lake housing market,” said Eric Allen, Regional Director of Metrostudy’s Utah / Idaho offices. “As such, it will become more difficult to maintain the pace of new home production if these issues don’t subside, however there does not appear to be much relief in the near future. Production for new homes above $300k continues to increase at a very rapid pace, while inventory remains well within or below equilibrium. While new home production in the $200k-$300k price segment accounts for 34% of total starts market share, these segments have only grown 6% over the past year. On the other hand, new home starts from $300k- $800k have increased 25% since last year at this time, and account for 57% of all new home starts in the market. With the pressures of high land prices, low labor and high demand from out of state buyers, controlling costs is very difficult for builders.”

20170529 Utah Housing Market Chart