The pandemic has supercharged Utah’s housing market driven by historically low interest rates and low unemployment rates. Utah housing market has been ranked as the nation’s #1 housing market for the strongest pace of job growth, along with low unemployment, low mortgage rates, few mortgage delinquencies, and low state & local taxes, according to Bankrate.com. Continued historically low mortgage rates and a solid recovery from the pandemic predict that the Utah real estate market could set another record in 2021. The same can be said about the Salt Lake County real estate market.
Why is Utah’s housing market so hot? Rapid population growth and job growth are the two most important drivers of housing demand in Utah right now. According to local real estate agents, there aren’t enough single-family homes to meet the rising housing demand. A balanced market has roughly a six-month supply of houses, which means that if we stopped listing new properties, we’d still have about six months before we ran out. And right now, Utah is down to about four weeks of supply of homes.
As a result, finding a dream house in this market is challenging for buyers, making it extremely competitive. Utah’s employment landscape is also one of the most impressive in the country. It has had the most rapidly growing job market in the country for the past decade. Utah’s population grew by 18.4% over the past decade, making it the fastest-growing state. It’s now the 30th most populated state, with nearly 3.28 million people, according to U.S. Census Bureau data.
A large number of Californians are relocating to Utah, putting extra pressure on the supply side. In-migration to the Salt Lake metropolitan area is still at an all-time high. The issue is that demand is so strong that inventory can’t reach a level that indicates a sufficient supply. People are also coming from New York, Boston, Vermont, Austin, Texas, and other cities, according to local real estate agents. They also think that people who are first-time homebuyers in Utah will be priced out of the market by people moving in from other states.
Utah Housing Market Trends 2021
Utah’s housing market is sizzling hot at the moment. Residential real estate has boomed during the pandemic, and Utah has emerged as a particularly desirable market. Utah home prices are soaring as Californians migrate into the state leading to an imbalance between its supply and demand. House prices rose in all 50 states between the first quarters of 2020 and 2021, according to the Federal Housing Finance Agency House Price Index (FHFA HPI). Utah’s housing market ranked second with an annual appreciation of 19.2 percent. Idaho was #1 (23.7 percent). In the Salt Lake City Metro Area, house prices rose 18.4 percent over the past year and rose 5.7 percent between the first quarters of 2020 and 2021. The Cumulative change in FHFA HPI since 2007 amounts to 81 percent.
Source: FHFA HPI® Top 100 Metro Area Rankings (as of 2021 Q1)
Graph Source: FRED – All-Transactions House Price Index for Salt Lake City, UT (MSA)
Utah boasts the nation’s strongest pace of job growth, along with rock-bottom unemployment, ultra-low mortgage rates, few mortgage delinquencies, and low state and local taxes. All those factors pushed Utah into first place in Bankrate’s Housing Heat Index for the fourth quarter of 2020. Utah’s home values increased by 15.39% in the 12-month period that ended Dec. 31, third-best among U.S. states, according to the Federal Housing Finance Agency.
Since 1991 Q1, HPI for Utah has increased by 414.95%. Idaho ranked #1 in FHFA State House Price Indexes. The HPI is a broad measure of the movement of single-family house prices. It is measured by reviewing mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac. According to a Bankrate analysis of Labor Department data, Utah also posted the second-strongest job growth in the nation from December 2019 to December 2020.
Since Jan 2012, Utah housing prices have gone up by nearly 135% — Zillow Home Value Index. For your information, ZHVI is a seasonally adjusted measure of the typical home value and market changes across a given region and housing type. It reflects the typical value for homes in the 35th to 65th percentile range. ZHVI represents the whole housing stock and not just the homes that list or sell in a given month.
The typical home value of homes in Utah is currently $465,012. It indicates that 50 percent of all housing stock in the area is worth more than $465,012 and 50 percent is worth less (adjusting for seasonal fluctuations). In July 2020, the typical value of homes in Utah was around $377,000. Home values have gone up 24.1% over the last twelve months alone and will continue to rise at a similar rate (double-digit appreciation). Housing supply is at an all-time low, while demand remains high, implying that prices are set to rise further.
Credits: Zillow
Utah Real Estate Market Trends For July 2021
Here’s how Utah’s housing market performed in July 2021. The data is provided by UtahRealEstate.com.
In July 2021, over 4,510 homes were sold on MLS.
No. of single-family homes sold was 3351.
No. of multi-family homes homes sold was 1159
The median days on market were 6, down from 15 last July.
The median selling price reached $510,000 for single-family homes, up 30.1% year-over-year.
The median selling price reached $363,000 for multi-family homes, up 32.0% year-over-year.
Source: UtahRealEstate.com MLS-Wide Housing Stats for July 2021
Here’s the current overview of the Utah’s Listing prices by “Counties” (source: Realtor.com)
A list price in real estate is the price of a house for sale determined by the seller and her listing agent. The listing price determines how long it takes to locate a buyer (i.e., Time On the Market = TOM), and TOM influences the price that comes from the seller-buyer bargaining. Although paying 1 to 3 percent over the list price is not unusual, you should ask your realtor to come up with a price that is best for you.
Counties
Median Asking Price
$/SqFt
Salt Lake County
$475K
$223
Utah County
$450K
$193
Davis County
$449.9K
$192
Weber County
$365K
$190
Washington County
$474.9K
$244
Cache County
$365K
$170
Summit County
$1.3M
$585
Iron County
$274.7K
$183
Wasatch County
$699.7K
$331
Tooele County
$394.9K
$168
Box Elder County
$348.5K
$160
Uintah County
$199.9K
$118
Salt Lake City Real Estate Market Trends 2021
Salt Lake City is the largest city in the state of Utah, though it tends to be overlooked by real estate investors as just another part of a “flyover” country. Nearly half of all jobs in the state and 40% of the state’s population are located in Salt Lake County. The city is the core of the Salt Lake City metropolitan area, which has a population of roughly 1.2 million. Today, Salt Lake City is a major tourist spot in the U.S. The city is also the national hub of industrial banking.
People are moving there due to the lower cost of housing, good quality of life, and outdoor recreation. The economy is strong and the city has one of the lowest unemployment rates in the nation. A strong job market and a robust economy have been contributing to the rising housing costs over the past several years. Since 1996, housing prices in Salt Lake County have increased at an average annual rate of 5.1%. The rate of price increases slowed in 2018 and 2019, and it appeared that another year of moderation was on the way in 2020. However, the mortgage rate fell from 3.45 percent in March to a historic low of 2.67 percent in December.
Lower interest rates resulted in a significant increase in demand for housing, pushing up prices, according to the Salt Lake Board of Realtors. In 2020, the median sales price of a single-family home in Salt Lake County increased by 11.8% to $425,000. Total home sales were up 5.5% as compared to 2019. The days on market reached an all-time low of 12 days for a single-family home, down from 24 days in 2019 and far below the long-term average of 41 days. The Salt Lake City real estate market has been one of Millennials’ toughest real estate markets due to limited supply relative to demand. It has become one of the top markets to watch in 2021.
Here’s the most recent market report released by the Salt Lake Board of Realtors®. The median sales price of homes in Salt Lake County was $474,925 in June 2021, which is 26.6 percent more than the same time last year. The inventory has shrunk to an extremely low level and home prices in Salt Lake City are expected to rise by record levels in 2021. It would take less than four weeks for all the properties to dwindle from the market at the current pace of sales.
June 2021 housing stats show that Salt Lake County is a seller’s real estate market. Homes are selling fast with the average days on market being just 13, down nearly 55.2% from last year. Percent of Original List Price Received = 104.5%. It is a ratio between a starting price and a selling price for each sold listing. Then the listing-level ratios are averaged to find the entire market’s average percent of (original) list price. Months Supply of Inventory has dropped to 0.9, down 52.6% from last year. It refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace.
Salt Lake City Housing Market Forecast 2021-2022
Salt Lake City is a moderately walkable city with a population of approximately 186,419 people. While the city limits encompass 110 square miles, downtown runs nearly two miles from east to west and nearly two miles north to south. Salt Lake City’s population is also very young. The largest percentage of the city’s population falls in the 25 to 39-year-old age group.
Couple that with a high school graduation rate, and a large number of college graduates and you have an attractive workforce for many large companies. The state of Utah’s population grew 9 percent over the last five years, much of it concentrated in Salt Lake City, where the median home price at the end of 2020 was $399,500 (still significantly lower than the average in Denver).
The Salt Lake City area’s economy is doing well, and it has one of the lowest unemployment rates in the U.S., ringing in at just 3.5% in December 2020. Utah’s employment outlook during the pandemic continued to outperform the rest of the country in December. The state of Utah’s unemployment rate was 3.3%, well below the nation’s 6.5%.
The strength of the overall economy significantly impacts the real estate market as buyers’ ability to support housing prices largely depends on key economic factors. The state’s economy has proved to be “one of the nation’s best in reemploying workers” as officials continued to actively encourage those drawing unemployment benefits to seek work in sectors less damaged by the pandemic.
What are the Salt Lake City real estate market predictions for 2021 & 2022? Long-term demographic and economic growth has generated rapid increases in housing prices in Salt Lake County. The median sales price of a single-family home in the county has increased from $129,000 in 1996 to $425,000 in 2020, an average annual growth rate of 5.1%, according to the Salt Lake Board of Realtors®. The annual growth rate in 2020 was 11.8%. Affordability issues may impact rapid price increases in 2021, so another year of a double-digit increase is unlikely.
In 2021, the total number of home sales will reach 19,500, including 14,000 single-family homes and 5,500 condominium/townhome units.
Since 1996, Housing Prices in Salt Lake County Have Increased at an Average Annual Rate of 5.1%.
From 2015 to 2020, the median sales price has increased from $272,900 to $425,000, an average annual increase of 9.3%.
2020’s annual growth rate was 11.8%.
Expect the median sales price of a single-family home to increase by 6%-8% to $455,000 in 2021.
The price of condominiums/townhomes may increase by 9%-10% to $335,000.
Source: Housing Forecast for 2021 By Salt Lake Board of Realtors®
Let us look at the price trends recorded by Zillow over the past few years. Salt Lake City has a track record of being one of the best long-term real estate investments in the U.S. Since 2012, the Salt Lake City home values have appreciated by nearly 142% — Zillow Home Value Index. ZHVI represents the whole housing stock and not just the homes that list or sell in a given month.
The typical home value of homes in Salt Lake City is currently $527,330. It indicates that 50 percent of all housing stock in the area is worth more than $527,330 and 50 percent is worth less (adjusting for seasonal fluctuations). In July 2020, the typical value of homes in Salt Lake City was around $438,000. Salt Lake City home values have gone up 21% over the last twelve months.
The forecast is that home prices will continue to increase at an almost similar pace in 2021. The limited supply of houses for sale is continuing to drive the home price up. Generally, a balanced market will lie somewhere between four and six months of supply. If MSI is displayed as less than 4.0, sellers have gained asking power. If MSI is above 6.0, buyers have gained negotiation power. In Salt Lake City, it is less than a month. The demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations.
According to NeighborhoodScout’s data, Salt Lake City appreciation rates continue to be some of the highest in the nation, at 6.96%, which is higher than appreciation rates in 94.14% of the cities and towns in the nation. Based on the last twelve months, short-term real estate investors have found good fortune in Salt Lake City. In the latest quarter, Salt Lake City appreciation rates were at 2.87%, which equates to an annual appreciation rate of 11.97%.
If we consider the Salt Lake City metropolitan area, the typical value of homes is $499,913. Salt Lake City Metro home values have gone up 23.9% over the past year and Zillow predicts they will rise 18.7% over the next twelve months.
Here is the visual representation of how home prices have grown from 2011 and their forecast (in the green area) until June 2022.
Courtesy of Zillow.com
Salt Lake City Real Estate Investment
Now that you know where Salt Lake City is, you probably want to know why we’re recommending it to real estate investors. Is Salt Lake City a Good Place For Real Estate Investment? You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2021.
If you are looking to make a profit, you don’t want to buy the most expensive property on the Salt Lake City real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Salt Lake City that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
So what makes Salt Lake City Downtown so appealing to home buyers and investors? Downtown is the oldest district in Salt Lake City, Utah. The grid from which the entire city is laid out originates at Temple Square, the location of the Salt Lake Temple. Downtown Salt Lake City encompasses the areas of Temple Square, The Gateway, Main Street, the central business district, South Temple, and others.
Throughout the last decade, Salt Lake City has seen a significant increase in development, from City Creek Center to 111 Main, these and other developments have played a crucial role in improving the vibrancy of downtown. Like the rest of the state, Salt Lake City Downtown is benefiting from the region’s healthy economy.
More people live and work in the downtown area than ever before. But according to local real estate experts and representatives from the Downtown Alliance, despite the boom, the supply in downtown Salt Lake City isn’t catching up to the demand, and more development is needed in the city’s central business district to accommodate the growing demand for housing and office space.
The Urban Land Institute ranked it the nation’s third-best market for commercial development in its 2018 Emerging Trends report, fueled in part by the big names relocating here like Goldman Sachs, which now has the fourth-largest office in the world in Salt Lake City. Salt Lake City’s housing market is booming because of an ideal combination of business growth triggering in-migration and strong native population growth.
And with a variety of affordable homes in high-quality neighborhoods, it is a market that is not yet closed to first-time home buyers. Is Salt Lake City going to be a sizzling real estate market for investors in 2021? Looking at the positive forecast, the annual appreciation rate is predicted to be between 10% to 12%.
You can either choose to invest in your future or market your home to potential buyers. If you are looking for an affordable real estate market with a high potential for return on investment, you should consider Salt Lake City in 2021. Let’s take a look at the number of positive things going on in the Salt Lake City real estate market which can help investors who are keen to buy an investment property in this city.
Positive Demographic Trends
The total fertility rate for the United States hovers between 1.8 and 2.1 depending on the source you want to believe. Mormons, the majority of the population in Salt Lake City and Utah as a whole, have an average of 3.4 children. This puts constant pressure on the Salt Lake City real estate market. It also makes the Salt Lake City housing market unusual in the demand for homes with multiple bedrooms suitable for large families. There is a niche in the Salt Lake City real estate market for large luxury homes, but it is notable for the sheer demand for 4 and more bedrooms in affordable neighborhoods.
Near Certain Real Estate Appreciation
Salt Lake City sits at the intersection of I-80 and I-15. The industry tends to spread out along the highways, and housing follows. Investors in the Salt Lake City real estate market can buy land to develop or invest in housing projects being built in expectation of workers who will soon move to the area. Demand is one factor in the equation that determines the price of housing. The other is supply.
Salt Lake City has seen an increase in housing construction since the economy rebounded. However, geography limits how and where homes can be built. This is causing home prices to appreciate significantly, and there is no evidence Salt Lake City could over-build the way Phoenix did before the Great Recession. A subtle issue hitting Utah is the relative shortage of skilled building trade talent despite the influx of people coming to work in business and tech.
Salt Lake City Market Is Everything Which California Isn’t
California is experiencing an incredible divergence from its ideals. While there is still a red-hot housing market in Silicon Valley, the state also has the highest poverty levels in the nation. They’re chasing businesses out of the state through oppressive regulation and high taxes. In contrast, Salt Lake City is booming because it is business-friendly.
So many California tech firms have relocated to Salt Lake City that the area is now nicknamed “Silicon Slopes”. Forbes listed Salt Lake City first on its list of “next tech meccas”. The city is already home to many new startups. Where there are currently good-paying jobs, new residents are sure to move in. And that only puts more pressure on the Salt Lake City housing market. The very low crime rate in Utah compared to surrounding states is merely a bonus.
The Low Cost of Living in Salt Lake City
Housing aside, another reason why people relocate from the West Coast to Utah is the low cost of living. In fact, the $400,000 house in Utah with four bedrooms and a yard looks cheap when you sold a two-bedroom condo for 50% more than that in California. The overall cost of living in Utah is cheaper than the nation overall, and it is far cheaper than California, so many choose to relocate here from the high-cost states on the coast.
The Growing Salt Lake City Rental Market
The Salt Lake City housing market can’t keep up with demand, and this is pushing many Millennials and new residents into the rental market. While many would like to own a home, affordability is an issue for the young would-be homeowner; the average Millennial earns $68,000 a year while the median home price is $400,000. This explains why Salt Lake City has some of the fastest-growing rents in the country.
As of August 8, 2021, the average rent for a 1-bedroom apartment in Salt Lake City is currently $1,150. This is a 16% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Salt Lake City increased by 5% to $1,045. The average rent for a 1-bedroom apartment increased by 5% to $1,150, and the average rent for a 2-bedroom apartment increased by 7% to $1,395.
Two-bedroom apartment rents average $1,395 (an 8% increase from last year).
Three-bedroom apartment rents average $1,865 (a 4% increase from last year).
Four-bedroom apartment rents average $2,563 (a 22% increase from last year).
The Zumper Salt Lake City Metro Area Report analyzed active listings in June 2021 across 7 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Utah one-bedroom median rent was $1,047 last month. Salt Lake City was the most expensive city with one-bedrooms priced at $1,100 while Provo ranked as the most affordable market with rent at $800.
The Fastest Growing Rents (Y/Y%)
South Salt Lake & Murray rents were the fastest-growing, both up 14.9% since this time last year.
Ogden saw rent climb 12.5%, making it second.
Salt Lake City was third with rent growing 4.8%.
The Fastest Growing Rents (M/M%)
Murray rent had the largest monthly growth rate, climbing 4.9%.
South Salt Lake was second with rent jumping 4.2% last month.
Source: Zumper
Landlord Friendliness
Salt Lake City requires landlords to get a business license, even if they own one rental home. The fees that you are required to pay as part of the rental program depend on how well-maintained the units are. However, Salt Lake City in general is very landlord-friendly. Eviction for nonpayment of rent can get someone out in two to four weeks. Courts regularly side with landlords and award triple fees for damages by a tenant. If someone violates the terms of the lease, they have three days to correct the situation. You can end a month-to-month tenancy with 15 days of notice.
Multiple Luxury Markets
Downtown Salt Lake City properties near the Mormon Temple command a premium, but that isn’t the only upscale market in the area. Park City and the northern side of Oakley have properties that cost on average well over a million dollars. As you move up Highway 80 toward Hoytsville and Wanship, properties routinely cost more than a million dollars despite the hour commute to Salt Lake City.
Looking For Salt Lake City Investment Properties?
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Salt Lake City.
Consult with one of the investment counselors who can help build you a custom portfolio of Salt Lake City turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Salt Lake City.
Not just limited to Salt Lake City or Utah but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Salt Lake City turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Like the Salt Lake City real estate market, the other housing market to go for to diversify your investments is the Baltimore real estate market. The Baltimore real estate market has been in decline for years, but several spots offer significant returns. And there are signs that the city is starting to turn around.
The Baltimore real estate market around the new industrial parks built to cater to Amazon will boom because we can expect as many jobs from Amazon’s suppliers in those areas as Amazon itself – and those workers will want to live close to work. The Baltimore real estate market is promising and shows a new increase of opportunities for both buyers and sellers.
Similarly, Cincinnati, OH is another great market to get started in real estate investing. Cincinnati’s real estate market is on the upswing and looking strong for the foreseeable future. It provides many opportunities to investors, regardless of the market you want to invest in.
Let us know which real estate markets in the United States you consider best for real estate investing!
Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References
https://www.zillow.com/salt-lake-city-ut/home-values/
https://www.zillow.com/salt-lake-city-metro-ut_r395053/home-values/
https://www.bankrate.com/mortgages/housing-heat-index/
https://www.fhfa.gov/DataTools/Tools/Pages/House-Price-Index-(HPI).aspx
https://www.fhfa.gov/DataTools/Tools/Pages/FHFA-HPI-Top-100-Metro-Area-Rankings.aspx
https://slrealtors.com/wp-content/uploads/2021/01/2021-Housing-Forecast-Report.pdf
https://www.realtor.com/realestateandhomes-search/Utah/overview
https://www.sltrib.com/news/2021/06/24/hyper-hyper-competitive/
https://www.zumper.com/rent-research/salt-lake-city-ut
https://www.realtytrac.com/statsandtrends/foreclosuretrends/ut/salt-lake-county/salt-lake-city/
https://www.ksl.com/?sid=46284050&nid=1426https://www.buildium.com/laws/utah-evictions-process/
https://en.wikipedia.org/wiki/Salt_Lake_City
https://www.deseretnews.com/article/900024786/salt-lake-city-ranks-among-top-seeing-gains-in-housing-inventory-report-says.html
https://www.deseretnews.com/article/865628480/Mormon-families-are-Americas-largest-new-study-finds.html
http://www.cbre.us/people-and-offices/corporate-offices/salt-lake-city/salt-lake-city-media-center/cbre-releases-2018-salt-lake-city-real-estate-market-outlook
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