Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations
Reporting from the St. George area focused on local government, public lands and the environment, indigenous issues and faith and spirituality.

What fewer houses and more condos could mean for southwest Utah’s housing future

The sun sets over neighborhood homes in St. George, Aug. 25, 2023.
David Condos
The sun sets over neighborhood homes in St. George, Aug. 25, 2023.

The number of homes built in Washington County dropped this year. But it’s not that people don’t want to buy a place in southwest Utah anymore.

Stacy Young, government affairs director with the Southern Utah Home Builders Association, said high construction costs, inflation and rising mortgage rates have just pushed home prices out of reach for lots of potential buyers. So, many have decided to move in with family or continue renting rather than looking to buy.

“It's an invisible problem,” he said. “The demand is still there. … It's not that it's gone away. It's that we’re just not able to meet their needs in today's environment.”

Those market conditions have pinched local home builders, too. It’s making them rethink how many and which types of homes they construct.

During the frenzied highs of last year’s housing market, Brian Giles, the general manager of Jones Paint and Glass in St. George, said the cost of building materials went up. Demand was so intense that it didn’t matter what things like lumber or trim cost — builders would still buy it anyway.

“People at one point were not even asking what it costs. They were just trying to jump in and take advantage of the hot housing market,” Giles said.

This year’s slowdown has had some silver linings. It’s easier to find workers now than it was last year, he said. But prices for building materials have remained high, and higher interest rates hit construction loans, too.

That means builders have had to find other ways to cut costs and try to lower home prices enough to lure buyers to the table. They may offer to help buyers pay down their mortgage rate, throwing in some extra money to the lender at closing to lock in a lower interest rate for that loan. They’re also cutting their costs by building homes with more basic features and materials rather than a bunch of upgrades.

He said the entire homebuilding ecosystem is having to find ways to make do with less.

“Customers now are not willing to pay the prices they were last year,” Giles said. “We’re having to tighten our belts now, and so that pressure then is pushed down to everyone from the bricklayer, the roofer, you name it.”

That’s all led to fewer homes going up this year.

From January through June of 2023, 1,437 new residential units were built in Washington County. That’s down 28% from the same time period the year before when there were 1,992 units built.

The biggest contributor to that drop came from the single-family homes category. In the first half of 2023, there were 747 single-family homes built. That’s down 38% from the first half of 2022.

The number of new condominiums and townhomes, however, jumped. A total of 609 condo and townhome units were built from January through June, more than twice as many as the same time period last year or the year before.

Because mortgage rates remain high, however, home buyers are still in a tight spot. The median listing price for a Washington County home in October 2023 was $675,000, up from $400,688 four years earlier.

But the median selling price in October of this year — $432,000 — was considerably lower than the listing price. That shows how interest is moving toward the less expensive side of the market, Young said, and illustrates how today’s buyers have to temper their expectations.

“Today's starter home is probably a townhome or a condo versus a detached single-family home on a larger lot,” he said.

He expects the trend toward condos to continue into next year as more builders shift away from single-family homes. But that takes time, he said. Some of the single-family home developments being built now, for example, have been planned for years.

For an area projected to see its population double in the next three decades, the stakes of solving its housing supply challenges are high. Young said his organization’s projections show that Washington County will need between 3,000 and 4,000 new housing units per year over the next decade to meet future demand.

But if those homes continue to be built as large, expensive single-family houses, Washington County could face the same situation as many other growing towns where it’s tough for people like nurses and teachers to afford to live in the community where they work.

“What's at stake is whether we're a complete community or not. And to me, a complete community includes all of the folks that make it go,” Young said.

One big thing that could help is changing zoning rules to make it easier for builders to put in condos and townhomes.

Historically, Young said, those rules have made it harder to build higher-density housing compared to single-family homes. And established neighborhoods are often resistant to higher-density construction. That’s why many of the area’s current condo and townhome developments have been on the outskirts of town.

Attitudes about higher-density housing are starting to change, Giles said, but it still might be the biggest roadblock standing in the way of the county reaching a future with a stable housing market.

“It's either [we] become a place where only the ultra wealthy can live and no one else can,” Giles said. “Or most ideally, we would have figured out a way to offer a variety of acceptable, convenient, efficient ways of housing and building community that works for every aspect of society.”

David Condos is KUER’s southern Utah reporter based in St. George.
KUER is listener-supported public radio. Support this work by making a donation today.