Tooele Transcript Bulletin – News in Tooele, Utah

April 18, 2017
Local building permits up 38 percent during 2016

But market still short of homes as labor shortage drives up housing prices 

Tooele County builders are doing their part to keep up with the area’s growing housing demands.

The county saw a 39 percent increase in new home construction in 2016 compared to 2015, according to data from Grantsville and Tooele Cities, and Tooele County.

However, based on the average number of homes sold during the last two months in Tooele County, the local market currently has less than a one-month supply of homes on the market, according to data collected by the Wasatch Front Multiple Listing Service.

“We were busier in 2016 than we were in 2015,” said Randy Young, owner of Tooele-based Randy Young Construction. “And it looks like 2017 will be even better.”

Young said his new home building activity has reached pre-recession levels.

County-wide, including municipalities, there were 580 building permits issued for single-family residences in 2016. For comparison there were 417 in 2015.

The community with the largest increase in new home construction was South Rim in unincorporated Tooele County southwest of Stockton.

Building permits issued for South Rim jumped from 15 in 2015 to 62 in 2016, a 313 percent increase.

During the same time period, the number of building permits for single-family homes went up by 125 percent in Lake Point, 49 percent in Tooele City, and 38 percent in Stansbury Park (See related chart).

“The lack of supply of homes is creating the need for new construction,” said Chris Sloan, broker for Group 1 Real Estate Tooele. “When you get offers on existing homes that are $10,000 to $15,000 over the list price, new home construction becomes attractive.”

Utah’s population growth is also contributing to the jump in home sales and construction, according to Young.

“There are a lot of people moving into the state due to the economy here is going good,” he said.

But the jump in new construction is not without its problems, according to Young.

“I’m having trouble hiring laborers,” he said.

A shift in immigration patterns may be contributing to the construction labor shortage, according to Sloan.

Sloan said he recently heard James Wood, Senior Fellow at the Kem C. Gardner Policy Institute at the University of Utah, speak at a seminar. Wood specializes in housing, construction, real estate and economic impact research.

Wood told the seminar that Hispanic immigration has declined. He also said a higher percentage of Hispanic immigrants took up work in construction trades than other immigrant groups, according to Sloan.

Young said he is seeing less Hispanic people applying for jobs with his construction company.

The shortage of construction workers means builders have to offer higher wages, resulting in higher costs for new homes, according to Young.

Increases in costs for land and materials are also being passed on to homebuyers. The increase in labor, land, and material costs is not confined to Tooele County; it is a statewide issue, according to Young.

“It looks like home prices will be going up,” he said.

Tim Gillie

Staff Writer at Tooele Transcript Bulletin
Tim covers education, Tooele City government, business, real estate, politics and the state Legislature. He became a journalist after a long career as an executive with the Boy Scouts of America. Tim is a native of Washington state and a graduate of Central Washington University.

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