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The huge amount of foreclosed properties and bank owned homes for sale in the Utah market will continue to hinder the housing industry from recovering fast, analysts have asserted. However, they believe that demand for residential properties will soon rise as creation of new households outpaces residential supplies.
Analysts stated that the supply of bank owned homes Salt Lake City and foreclosures in the markets of North Utah County should decline first before the whole region can achieve a sustained sector recovery. However, a number of housing analysts believe that pent up demand for residential properties will eventually lift the slumping sector within the next three years.
According to them, the supply of available Utah bank owned properties for sale and new houses is starting to shrink in various areas, particularly in the north Utah County region, and most of these areas will have more need of new houses in the coming few years. Realtors estimated that new households in the north county region number around 40,000, while the number of new houses being built is around 30,000 units. With household formation seemingly outpacing home building activities, analysts reported that builders are staring to make plans to construct more new dwellings.
Even with a lot of bank owned homes for sale and foreclosures to compete with, most home builders are reportedly anticipating a surge in demand within three years. In the market of American Fork, home builders filed for 52 single family residential permits last year. The total might be small, but analysts reported that the figure represents a jump of 136% when compared with 2008 when only 22 construction permits for single family dwellings were issued.
In Lehi, the number of cheap houses for sale is expected to diminish soon as analysts expect prices to pick up as new home construction increases. In 2008, only 193 housing permits were issued in the city, but the number bounced back last year to reach a total of 281. Although this total is still way below pre-crisis period levels, most analysts are optimistic that home building activities will continue to pick up in Lehi and in the rest of the north Utah County market.
Supplies of foreclosed and bank owned homes for sale are predicted to continue to rise in most areas of Utah, but housing industry analysts believe that the rate by which new households is being created will eventually bring a balance to the region's residential market. They expect home building activities to increase in the next three years.