May 9, 2003 — Not since the first quarter of 1978 have there been so many permits issued for new single-family homes in Utah. For the months of January, February and March 2003, 3,458 new single-family homes have received building permits. The value of these new homes exceeded $500 million and, along with new apartments and condominiums, pushed residential valuation to a record $605.0 million for the period.
Diane S. Gillam, accountant at the U’s Bureau of Economic and Business Research (BEBR) at the U’s David Eccles School of Business, says the upward trend should have legs. “Barring higher-than-anticipated increases in mortgage rates, or an increase in unemployment, the single-family home sector should continue to buoy the construction industry for the remainder of 2003, perhaps even reaching above the record levels of 1977,” said Gillam.
Continuing a trend from 2002, St. George led all other cities in the construction of single-family homes with 247. The south and west portions of the Salt Lake Valley also saw significant numbers of new homes: West Jordan with 172, Herriman with 170, Draper with 118 and West Valley with 116. Syracuse, in Davis County, added 137 homes and Lehi, in Utah County, issued permits for 127 new houses. In addition, permits were issued for 335 new apartment and condominium units in West Jordan, and 181 apartment units in Orem.
James Wood, Director of the BEBR, says the numbers are not as promising in all sectors. “Nonresidential construction has lagged mainly due to two factors: an oversupply of office, retail and warehouse space and the lack of new business investment because of the national recession. The pace of nonresidential construction activity is not likely to pick up significantly in the near future,” said Wood.
The nonresidential construction sector fell 36.6 percent from year-ago levels and is off 56.6 percent from two years ago. Nonresidential construction value for the first three months of the year totaled $134.3 million. Just two projects over $10.0 million were issued permits-a new Cache County Jail, valued at $13.0 million and an office building in Sandy, valued at $12.8 million.
The additions, alterations and repairs sector began to rebound from lower levels in 2002 and posted an increase of 20.7 percent over 2002 levels, to $91.0 million. Significantly, the nonresidential additions, alterations and repairs sector rose 27.9 percent from first quarter 2002, which reverses a downward trend that began in 2001.
Total permit-authorized construction value for the first quarter of 2003 was $832.5 million, an increase of 8.5 percent over the same period in 2002.