Housing boom, high energy prices are among Utah business highlights for 2005
While one-fifth of the nation's housing markets were considered overvalued, according to a February report by National City Corp., Salt Lake City was named the most undervalued housing market of 99 cities examined across the nation.
However, word of Utah's bargain home prices soon spread, leading to a real estate comeback that ranks as one of the state's top business stories in 2005.
It did not take long for home prices to rise, fueled by job growth, in-migration and low mortgage rates.
By September, Utah's housing market was on fire, with home prices climbing at their fastest pace in 10 years. As out-of-state investors and homebuyers pushed demand higher, multiple offers on single properties became a common occurrence.
According to a report by the U.S. Office of Federal Housing Enterprise Oversight, for the 12 months ended Sept. 30, Utah's home prices increased an average 11.37 percent, propelling Utah to a No. 22 ranking among all states and the District of Columbia in house-price appreciation, a sizable comeback from the second quarter of 2004, when Utah ranked dead last.
"Our local economy has actually done extraordinarily well this year," said Kelly K. Matthews, executive vice president and economist at Wells Fargo Bank. "Part of what makes that an interesting story is that at the same time that we had these very high energy prices, we continued to have very low, long-term interest rates. Therefore we have been able to have this housing boom in most all aspects of the market."
A leading contributor to the state's real estate boom was a surge in new jobs. For the 12 months ended Nov. 30, Utah added 41,200 new jobs, a growth rate of 3.6 percent, according to the Utah Department of Workforce Services. The construction industry was responsible for adding nearly one in four of those new jobs, with 9,700 new positions created for a 12.8 percent growth rate.
Rich Thorn, president of the Utah chapter of the Associated General Contractors of America, said all sectors of Utah's construction industry are in high demand, including carpenters, cement finishers, heavy equipment operators, electricians and truck drivers.
"The construction industry is a major driver of Utah's economy," Thorn said. "These are, relatively speaking, high-paying jobs. Whether it's residential, the heavy highway industry, underground utilities or commercial building, they're all pretty strong right now."
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