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Lifestyle renters » Longer-term demographics are also at play, leading large numbers of investors to pour cash into rental properties and developments in Utah markets.
Changing career patterns, a desire for more mobility, preferences for urban living and wariness of mortgage debt are all creating an emerging class of lifestyle renters, who are rejecting homeownership in favor of the ease and flexibility of renting.
Key Numbers on Utah Home Markets
2008 2013 Change
Utah 76.2 70.9 -5.3% U.S. 69.6 67.1 -2.5%
Rental vacancy percentage:
2008 2013 Change
Utah 7.5 6.7 -0.8% U.S. 9.7 8.4 -1.3%
Source: U.S. Census Bureau Housing Survey
Brokers tell of daily calls from out-of-state investors clamoring for downtown sites for multifamily construction. When one key urban lot along the TRAX red line near 400 South and 700 East in Salt Lake City went up for sale recently, it drew sizable bids from 17 prospective buyers, nearly half based outside Utah. Sixteen of the bidders want the site for apartments.
Apartment developers already are bringing a record number of new dwellings to market in and around Salt Lake City in a kind of boom in multifamily units, particularly downtown.
They’ve been spurred by falling vacancy rates for apartments, which, according to the U.S. Census Bureau, closed 2013 at around 6.7 percent statewide, down from 8.3 percent just five years ago. Local analysts say the number has dipped as low as 5 percent in recent months.
At least 3,274 apartments are under construction across Salt Lake County and another 5,674 have been proposed for this year, according to EquiMark, which tracks Utah’s multifamily-housing markets. In downtown Salt Lake City alone, one analyst said, nearly twice as many apartments are proposed or being built now as were constructed in the prior decade.
"The pipeline of new construction keeps growing," said Sage Sawyer, a principal broker at EquiMark. The trend, he said, has the potential to glut apartment markets during the next two to three years.
While that could be advantageous for renters with more landlords competing for their business, it may disappoint investors who planned on vacancy rates to stay low in the near term and continued upward pressure on monthly rents.
"If everything that is proposed gets built," Sawyer said, "there is definitely going to be some softness in the market."
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