New Construction Market Update
We continue to see unprecedented times in the real estate market. This is not unique to Utah; many other states are also experiencing an increase in demand, values increasing and costs to build soaring. Home equity in Utah went up an average of $39,000 in 2020 (based on data from CoreLogic on home with mortgages). It’s really remarkable that we have seen such in increase despite going through the Covid-19 pandemic. We have also seen an increase in out of state buyers relocating from other areas citing lower home prices, differing political climates, etc.
There is still a whole lot of new construction going on in Utah but we are facing some challenges:
- As mentioned above, supply of homes is not meeting demands.
- Under different circumstances a buyer could go to a builder and pay the set price of the home. However, we are seeing a lot of builders doing multiple offers/highest and best. As well as only releasing a few homesites at a time.
- Many trades are facing shortages of supplies & skilled workers (lumber, electrical supplies, plumbing supplies etc). This is causing an extreme jump in prices of materials and therefore the cost of homes is going up.
Notwithstanding all of the above, we do have some solutions! There are builders who are not doing highest and best and simply have a reservation list. We are on the reservation for several builders in Utah County so let us know what your needs are and see what we can do!