Transcript Slide 1

UTAH HOUSING MARKET:
CYCLES AND CONDITIONS
JAMES WOOD
BUREAU OF ECONOMIC AND BUSINESS RESEARCH
DAVID ECCLES SCHOOL OF BUSINESS
UNIVERSITY OF UTAH
APRIL 2005
RESIDENTIAL BUILDING PERMITS IN UTAH
(Bureau of Economic and Business Research, University of Utah)
30,000
25,000
Cycle 4
Cycle 2
Cycle 3
20,000
Cycle 1
15,000
10,000
5,000
0
70 973 976 979 982 985 988 991 994 997 000 003
9
1
1
1
1
1
1
1
1
1
1
2
2
Statewide
Utah County
Residential Construction in Utah County as Percent of
State Residential Construction
Year
% of State
Year
% of State
1985
6.70
1995
19.74
1986
8.93
1996
12.02
1987
14.99
1997
15.91
1988
13.98
1998
19.07
1989
15.80
1999
20.20
1990
18.52
2000
21.47
1991
17.35
2001
21.71
1992
19.28
2002
22.14
1993
18.41
2003
20.48
1994
18.50
2004
19.46
CHARACTERISTIC OF CURRENT CYCLE
 Utah Ranks Third in Increase in Housing Inventory Since





2000 – 11.4%.
One Out of Every Eight Homes in Utah Built Since 2000,
Utah County One Out of Every Five
Ranked Last in Price Increases of Homes 2000-04
Share of First Time Home Buyer Market Grows in 2004 –
36% of New Home Closing Less Than $150,000 (Salt
Lake, Davis, Utah)
Sales of Existing Homes in Wasatch Front Counties – 38%
Sold for Less Than $140,000
The Share of Rental Units at Record Low for Cycle – 10%
of All Units Rental
CHANGE IN HOUSEHOLDS AND RESIDENITAL
CONSTRUCTION IN UTAH
(BEBR and U.S. Census Bureau)
25,000
20,000
15,000
10,000
5,000
0
1975 1978 1981 1984 1987 1990 1993 1996 1999 2002
Total Households
Residential Construction
WHAT DRIVES DEMAND FOR HOUSING?
•
•
Economic Determinants of Demand
Employment
Income
Housing Prices
MLS Sales
Interest Rates
Demographic Determinants of Demand
Household Formations
Age Structure
Migration
Marital Status and Headship Rates
Fertility Rate
CHANGE IN POPULATION 25 YEARS TO 34 YEARS: UTAH
(U.S. Census Bureau and Governor’s Office of Planning and Budget)
25,000
20,000
15,000
10,000
5,000
0
-5,000
-10,000
Change in Households 25 to 34 Years
20
28
20
25
20
22
20
19
20
16
20
13
20
10
20
07
20
04
20
01
-15,000
CHANGE IN POPULATION FOR AGE GROUP 25
YEARS TO 34 YEARS: UTAH
(Governor’s Office of Planning and Budget)
Ten Year Interval
1990-2000
Change in Population (25 to
34 years)
56,800
2000-2010
173,400
2010-2020
-35,200
2020-2030
70,600
UTAH AVERAGE ANNUAL PAY AS PERCENT OF U.S.
AVERAGE
(U.S. Bureau of Labor Statistics)
100%
95%
90%
85%
80%
75%
70%
1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
% of U.S. Average
MEDIAN HOUSING PRICE FOR SALT LAKE METRO
AND U.S. (OFHEO and National Association of Realtors)
250
200
$192,900
150
$75,500
$151,100
100
50
$66,700
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
0
U.S.
Utah
Average Sales Price for Existing Homes: First Quarter
(WFRMLS)
Year
(1st Qtr)
Salt Lake
Utah
Davis
Weber
Total
2003
$179,479
$170,639
$159,413
$127,474
$168,375
2004
$189,014
$171,793
$163,798
$120,255
$172,718
2005
$204,244
$205,133
$179,997
$141,451
$192,172
8.0%
19.5%
9.8%
17.6%
11.3%
% Chg.
2004-05