Are Utah Home Builders Desperate?

That’s the implication a recent article in the Salt Lake Tribune wants to imply. It begins rather benignly with a title of Home builders offering incentives, but it's not a sign of a market crash.

The article quickly goes to the jugular by saying:

As expected, Utah's red-hot housing market is cooling off, and builders are offering up goodies such as free appliances and luxury vehicles in a bid to reel in buyers.
The freebies represent an abrupt change from the past two years, when builders along the Wasatch Front have not had to offer much of anything to entice buyers. Utah's economy has been among the strongest in the nation, with stellar job growth and population gains, both of which bode well for builders.

One example cited in the article is from another local builder:

To spur sales, Hawkins Homes & Communities in North Salt Lake said it began advertising a "free" Lexus IS250 on two billboards in Davis and Salt Lake counties earlier this month.

The fine print says that buyers who meet certain criteria get a free one-year lease on the luxury sedan. (They can also elect instead to get a $10,000 kitchen or bathroom upgrade.)

The builder, which has subdivisions in Draper, Herriman and Fruit Heights, said it will offer the incentive through end of the month.

But, the other example cited isn’t really indicative of special incentives.

Sage Builders, which is building in south Salt Lake County and Utah County, was offering $5,000 off closing costs to buyers who use a "preferred lender."

Many local builders, Gold Medallion included, offer incentives for using our preferred lender. It helps speed up the financing process, assures customer satisfaction and insures a timely close for our clients. This is a common practice among builders and certainly doesn’t indicate a market slowdown.

In fact, the market outlook for new homes in Utah is quite good according to the latest report from real estate data provider NewReach.

Complete unoccupied homes, or standing inventory, remains exceptionally low in most of the counties within the Wasatch Front. Salt Lake County, however, has seen an increase from 1Q06, as standing inventory along the western corridor has increased. Currently, this is not a serious concern as new home closings within the entire county remain extremely robust.

Salt Lake continues to be a great place to work and live with plenty of jobs available. Both housing appreciation and demand remain strong and we expect a consistent growth rate over the coming years.