Construction is booming in Cache Valley and Smithfield is one of the fastest growing areas in the valley.
SALT LAKE CITY – Utah is booming when it comes to residential home construction, but development experts are still wondering if construction will ever catch up with statewide demand.
“Utah is the fastest-growing state in the nation,” according to Utah Sen. Chris Wilson (R-2nd Dist.). “With Utah’s changing demographics, strong economy and diverse job market, demand for housing will continue to rise.”
That view is supported by a new study released Jan. 11 revealing where new houses are being built, with Utah taking the top spot.
Utah is the state with the most new construction now being developed, with 11.7 new builds per 1,000 residents. That’s more than twice the national average of 5.23 new builds per capita.
That’s good news, right?
The problem is that the report, developed by portlandrealistate.com based on recent data collected by the U.S. Census Bureau, also says that the average value of a home in Utah is nearly $555,000.
Utah’s residential construction values reached $2.37 billion in the first quarter of 2022, according to the Ivory-Boyer Real Estate Center at the University of Utah.
That figure represented 4,055 building permits issued for single-family units; 2,156 permits for condos, town-homes and duplexes; and another 3,458 permits for apartments.
“Even with inventory significantly higher than it had been in the previous two years, it still does not address what has been a problem in Utah for years,” according to Norada, a website guiding real estate investors. “There are still not enough houses.
“Homebuilding soared in Utah in 2022, putting the state on the national map for its housing boom. It made a decent dent in Utah’s housing shortage, but not enough to erase it.”
Here in Cache County, that shortage is particularly acute. The Kem C. Gardner Policy Institute at the University of Utah estimates that Cache Valley will need 11,600 new housing units between now and 2030.
The problem is property values, according to the June 2022 final report of a Housing Crisis Task Force organized by County Executive David Zook.
That report said that the average Cache County home appreciated in value from $172,000 in 2010 to $307,000 in 2020, an increase of 78 percent. Between 2020 and May 2022, that same home’s value skyrocketed to $518,000, a 68.8 percent increase since 2020 and a 185 percent increase since 2010.
The report goes on to say that, given today’s market prices and household incomes, not only have those increased values pushed home ownership out of reach for many first-time homeowners, but most residents of Cache Valley could not afford to purchase the home they now live in.
Wilson said that the Legislature is considering tackling the issue of affordable housing this year.
Possible solutions being discussed by lawmakers include allowing more flexibility with land use; providing down payment assistance to potential home buyers; creating subsidies for new construction of affordable housing or rentals; decreasing access to short-term rentals; increasing housing density near access to public transportation hubs; providing rental assistance; providing incentives to encourage cities to zone for higher-density/affordable housing; allowing local governments to manage affordable housing; and providing consistent policies across the state.
The Utah Legislature is set to convene on Tuesday, Jan. 17.