A housing shortage is predicted as demand grows and home-buying activity increases. In a May Enterprise Business Newspaper article by Dale Gunther, vice chairman of the board of People’s Utah Bancorp, he makes the case that the housing needs for the state’s expected population growth will create a shortage. He also predicts a housing boom in the not-too-distant future.
Building permits were down in 2010 but a predicted 15,000 new households per year for the next eight years will turn the trend around.
Gunther states, “Demand is already building as frugal buyers continue waiting for the market to bottom out. Once they feel it has – perhaps when interest rates begin to rise and employment steadies – there should be an increase in home buying activity, ultimately resulting in increased home prices.”
The Utah Department of Workforce Services estimates 20,000 new jobs this year and next year’s job growth around 30,000. The improved employment environment will influence the real estate market. New jobs mean an improved optimism in the future and a willingness to invest in the future, specifically in real estate purchases.
“It means that if you are waiting to buy a home, whether an existing or newly constructed structure, time is running out,” says Gunther. “Most economists agree that we are at the bottom of this recession and that home prices, building costs and interest rates have nowhere to go but up.”