On August 23, in an article titled “Sales of New Homes Climb Sharply”, the Wall Street Journal reported new home sales continue to rise in July while the number of existing homes for sale continues to decline.
Before prices collapsed in 2008 and 2009, the inventory of existing homes rose sharply and new construction sales fell. This time around, existing home inventory is down and new home construction is on the rise. These trends signal a recovering housing market. The Case Shiller index published in late August confirmed prices are stabilizing (see our blog post on August 30th).
The greater St. George, Utah real estate market in Southern Utah is following this trend closely. Inventory of homes for sale has fallen from 2,238 to 1,784 homes for sale as of the June Local Market Update published by the Utah Association of Realtors. Months supply of inventory has fallen from 7.9 to 6, a 25% improvement. Last, median and average sale prices are up by 10.8% and 16.9% respectively year-over-year for the month of June.
The National Association of Home Builders is confirming the Southern Utah/St. George real estate improvement trend. In their Improving Markets Index, Washington County was identified as an improving market.
New Construction is booming if you haven’t noticed. Many developers are increasing their prices and lot inventory is disappearing so quickly that builders are having trouble keeping their marketing materials updated. As of our last count, there are at least 33 developer/builder subdivisions currently selling homes with Ence selling out at Lakota Ridge and opening two more projects in September.
Custom builders are also starting to see business pick up and lot inventories at attractive prices have shrunk considerably from 2009 and 2010. This is definitively not the real estate market defined by the 2008 recession, and the deals associated with those market conditions are very rare in 2012.