According to Metrostudy’s 2Q16 lot-by-lot survey of every subdivision in the St. George/Mesquite market, there were a total of 496 new home starts – both attached and detached units – during the quarter, up 20% over 2Q15 and up 18% over 1Q16. New home closings in St. George during the quarter totaled 425, 5% over last year at this time and 31% higher than last quarter. Annual new home starts in St. George totaled 1,669 for the twelve months ending in June 2016, an increase of 21% compared to the same period last year, and new closings totaled 1,547, up 14% over last year. The Mesquite market area started 72 new homes in 2Q16, up 41% from 2Q15 and quarterly closings totaled 71, up 3% YoY and up 1% from 1Q16. In the Mesquite market, annual starts totaled 215 as of June, up 8% compared to last year at this time, and annual closings totaled 200, down 13% from 2Q15.
“While rising home prices nationwide have pushed many first-time homebuyers out of the buying pool, the St. George market has done a better job at providing more homes in the lower price points,” said Eric Allen, Director of Metrostudy’s Utah/Idaho region. “Approximately 59% of all new home starts in the St. George market are priced below $350,000. Last year at this time, 61% of all new starts were priced in this same segment. As of June 2016, the median price for a new detached home in the St. George market is $333,800, 3% higher from last year and up 1% from last quarter. Due to the increased starts pace of attached homes, the median price for a new attached home/unit was $181,300, which is 26% lower than last year at this time, and down 2% from last quarter. The median new home price in Mesquite is currently $229,600, which is down 8% from last year at this time, and 1% below last quarter.
Annual Starts by Price Range
As of June, new home inventory for attached and detached homes in the St. George market area totaled 872, an increase of 16% from 2Q15. Based on the current pace of absorption, this translates to a 6.8 month supply, up from 6.6 months at this time last year. Under construction inventory was 635, up 43% since 2Q15. Despite this increase, the supply of under construction homes is well within equilibrium at 4.9 months, up from 3.9 months at this time last year. Finished vacant home inventory decreased 26% from last year, and down another 15% from last quarter, for a total of 200 homes. This is a 1.6 month supply, down from 2.4 months recorded last year at this time. The rapid increase in under construction inventory has some in the industry a little worried, however finished vacant inventory remains well below equilibrium. New detached inventory in Mesquite totaled 94, 31% higher than last year and 15% above last quarter. This is currently at 6.7 month supply, up from 3.9 months recorded last year. Attached inventory sits at 198 homes/units, a 76.6 month supply. Of this total, 196 are finished and vacant, a 75.9 month supply.
With the increase in annual starts, vacant developed lot inventory in the St. George market has decreased 3% since last year. As of 2Q16, there were a total of 5,043 vacant developed lots (VDL) on the ground, a 36.3 month supply, down from 45.2 months in 2Q15. There were a total of 1,528 new lots delivered to the market over the past twelve months, which is 36% more than last year at this time. Vacant developed lot inventory in Mesquite decreased 8% from last year to a total of 1,507, which is an 84.1 month supply, down from 98.5 months in 2Q15.
“Despite the many threats on the national and global stage, the St. George market continues to expand at a rapid pace,” said Allen. “The market is benefiting from many second home buyers coming from the Wasatch Front, as well as out of state. The increased job growth is also creating home buyers within the local market. While we are anticipating production in the second half of the year to level off slightly, the market should experience one of the strongest years since prior to the recession.”
For further analysis of the St. George market, reach out to regional director Eric Allen: firstname.lastname@example.org