First-time homebuyers may find it difficult to buy homes in Utah in 2018, although they need to set their sights on suburban areas instead of the metropolitan region.
Svenja Gudell, chief economist of property data company Zillow, expects home construction to focus more on entry-level properties. Challenges for buyers, particularly for millennials, will persist in the following year. These challenges include a shortage of homes for sale.
Rising Home Prices
Zillow’s survey of industry experts and economists showed that they expect home prices to increase 4.1% in 2018 due to the lack of home listings. In September, a buyer had to pay around $245,000 for a median-priced home. This figure represented the 67th consecutive monthly increase on a year-over-year basis.
Another concern involves a shortage of construction workers. According to Ken Simonson, chief economist at the Associated General Contractors of America, many companies struggle to find skilled laborers amid continually expanding operations nationwide due to higher demand. While the expansions benefit other businesses, such as an industrial supply store, it prevents homebuilders from deploying more projects.
Homebuilders in Utah also face rising land and construction costs as other challenges to affordable housing. Zoning laws make it difficult to build lower-priced houses in cities near places of work, according to Gudell.
As a result, many of these companies will scout for land in suburban areas. First-time buyers, especially those with a limited budget, should be flexible enough to consider these areas. Despite an uptick in new home construction in Utah, many of these properties fall under the higher price range. Still, the bright side to a pickup in construction activity involves more business to construction suppliers.
First-time buyers may continue to be priced out of the market in 2018. Do you still plan to buy a house in Utah despite the expected challenges?