Reports describe housing prices in state, nation
SHERIDAN — Recent economic reports from state agencies indicate that increasing housing prices and a shortage of available housing units remain national and statewide trends that are unlikely to halt in the foreseeable future.
Construction permits issued for single family homes have dropped slightly since the start of calendar-year 2019, according to Jim Robinson, the principal economist in the Wyoming Economic Analysis Division, while the number of permitted multi-family units has grown. The state has issued four fewer single-family construction permits so far this year compared to 2018 but has issued 42 more multi-family units.
That trend has carried over from the end of 2018, according to Dr. Wenlin Liu, the chief economist in the Wyoming Department of Administration and Information’s Economic Analysis Division, and is contributing to a growing lack of available housing in Wyoming and nationwide. The prices of homes continued to grow in the fourth quarter of 2018, Liu reported, by 3.9 percent in Wyoming and 5.7 percent nationally.
Those numbers actually represent a slow down in the appreciation of housing prices, Liu noted, but the slower pace of the growth of housing prices is unlikely to translate into a decrease in prices anytime soon.
Liu explained that housing prices are appreciating at a slower rate because the demand for housing units across the country has been hurt by the increasing prices and a rise in mortgage prices.
The relative supply of housing is falling at the same time, though. Liu explained that “supply-side constraints” on the housing market have remained tight, resulting in a historically low ratio of housing inventory to housing sales. Because of this dynamic, Liu predicted that national housing prices are unlikely to fall, even though the overall economy is expected to slow down.
Though several community stakeholders have voiced concerns about a housing shortage in Sheridan County as well, the extent of that shortage remains unclear.
That lack of clarity stems, partially, from the relative nature of terms like “affordable housing.”
In December, the Wyoming Business Council released reports ranking each of Wyoming’s 23 counties on access to affordable housing and ranked Sheridan County 19th in the state, claiming there is a shortage of 3,320 housing units based on demand in the county. That report defined affordable housing as homes where families spend 30 percent or less of their income on mortgage or rent. Based on that metric, the largest housing demand in Sheridan County is for residences that cost between $134,400 and $215,071.
Local officials and real-estate agents have estimated the price range in the highest demand locally is slightly higher, between $200,000 and $300,000.
The WBC’s used building permits to draw its conclusions, however, and local developers have pointed out that county building permit data in Wyoming is often incomplete. Local officials have said their estimates are largely anecdotal.
There are two pending surveys officials hope can bring more clarity to the local housing market. The city of Sheridan and the Sheridan Economic and Educational Development Authority have discussed conducting a housing needs assessment, though that discussion is currently on hold while the city explores ways to minimize the costs its building codes add to the construction of new housing.
The Big Horn Homebuilders Association is also compiling its own housing-needs survey.