facebook-pixel

Out-of-state transplants to Utah fuel growth and drive up housing costs

The demand for housing from remote workers who moved accounts for more than half of the national increase in prices, researchers say.

(Francisco Kjolseth | The Salt Lake Tribune) The pandemic allowed many remote workers to move across the country, including Chris Kneeland, who moved his family from Canada back to Utah, where he first met his wife while attending Brigham Young University. Kneeland, pictured on Nov. 2, 2022, does most of his work from home and occasionally commutes to Calgary.

Chris Kneeland didn’t just shift to working from home during the pandemic — he changed where his home is, moving from Calgary, Alberta in Canada to Springville.

Now running his small marketing and consulting agency from Utah County, he flies back to Calgary once a month to spend four or five days there for work, he said. He chose Utah for its cost of living, beauty and time zone convenience, among other things.

”I found that the housing prices are shockingly high to locals,” he said. “But I think they’re shockingly affordable for people coming from higher priced markets.”

Like the nation, Utah saw home prices surge during the pandemic. Now, a study says remote workers who moved drove more than half of the national increase in home prices between 2019 and 2021.

And, it cautions, as remote work remains more prevalent, it will continue to affect housing costs while dampening the demand for commercial space.

As of August, surveys show that 30% of work is still being done at home, according to an Economic Letter from the Federal Reserve Bank in San Francisco, which explored the housing study. It examined shifts in the number of residents, the prevalence of remote work and home prices in population clusters across the country.

The analysis, it said, “implies that remote work resulted in house prices rising by about 15% from November 2019 to November 2021, accounting for more than 60% of the overall increase in house prices.”

Utah home prices continued to tick up after that point. For example, the price of a house in Salt Lake City increased 10.9% from September 2021 to September 2022, according to Realtor.com’s data.

‘I need work space’

Remote work “changed a lot of ways that we all as individuals, work and play,” said Babs De Lay, principal broker for Urban Utah Homes and Estates.

Before the pandemic, in 40 years of experience in real estate, De Lay hadn’t had a customer ask what internet speeds were available at a property.

Beyond the general rise in housing costs, people looking for homes this summer tended to spend more because of their remote work plans, said De Lay, who uses they/them pronouns.

Clients “are now specifically saying, ‘I need work space at home,’” they said.

Though De Lay hasn’t noticed a particular change in the number of their clients wanting to move to Utah from elsewhere, data from the Kem C. Gardner Policy Institute at the University of Utah shows the state saw a spike in out-of-state transplants in 2021.

The out-of-state “migration” of people to Utah jumped from being responsible for 49% of the population increase in 2020 to 59% in 2021.

Deaths from COVID-19 led to a low “natural” growth rate — the rate at which the population grows when calculated by deaths subtracted from births. But the state saw almost 35,000 more people move to the state than leave, a number that jumped 10,000 from the previous year, the data showed.

Many of the workers who moved to the Beehive State are likely remote — a September report by the Economic Innovation Group found that Utah County had more than 21% remote workers in 2021.

‘Growth is good’

Kneeland grew up in the U.S. and attended college at Brigham Young University, which is why he was familiar with Utah. He and his wife Holly started building a home here in July 2020 and moved in August 2021.

(Francisco Kjolseth | The Salt Lake Tribune) Chris Kneeland and his wife Holly, who met while attending BYU, overlook the wildlife and natural setting of their new home in Hobble Creek Canyon above Springville on Wednesday, Nov. 2, 2022. Kneeland who co-founded a marketing and consulting firm in Calgary, Canada, now works mostly remotely from home.

While higher prices don’t benefit renters and others who hope to buy homes, Kneeland said, he “imagined a lot of the locals would be reaping the benefits of their house values going up.”

With the opportunity to tap the increased value of their homes via loans to upgrade them, he said, “in my circle of friends, I’ve seen more winners than losers.”

And Kneeland is optimistic about the state’s growth: “I hope we double the population in the next 10 or 20 years. I think growth is good.”

Though, he conceded, he has the luxury of remote working — which “implies more than just control over when you clock in and clock out,” he said. It also means control over where you choose to live, raise children and “how you choose to spend your time,” Kneeland said.

He may feel differently about growth if he had to commute through traffic, for example, he said.

The increase in remote work doesn’t seem to have had a specific impact on reducing traffic, beyond helping to disperse morning drivers over a longer time window, said Mitch Shaw, a spokesperson for Utah Department of Transportation.

Traffic gets worse every year; “that’s just the challenge of growth,” he said.

But the pandemic does appear to have changed the rate of fatal and serious injury crashes, with nearly 300 deaths statewide in 2021, Shaw said. “We’re seeing an upward trend, and … it’s alarming,” he said.

The number of speeding tickets given for driving over 100 mph also has surged, said Sgt. Cameron Roden, a spokesperson for the Utah Department of Public Safety.

‘Don’t move here’

Dusty Smith beat the pandemic rush of remote workers to Utah by several years. After his wife took a job in Utah, Smith said, he “ended up quitting my job in Dallas at a law firm making six figures and moved here with no job.”

Smith, who said his membership with The Church of Jesus Christ of Latter-day Saints was also a factor in the move, initially did contract work. He later got a remote job working for a Houston-based law firm from Salt Lake City.

Though he and his wife no longer need to live in Salt Lake City, they choose to continue living in Utah because of its natural beauty and what he feels is a friendlier culture. It’s “like living in Texas in the ‘70s, when people were nice to each other,” he said.

He felt that Texas changed after a large number of people moved in from outside the state. “All of a sudden, it wasn’t the same,” he said.

And he worries that Utah will change in a similar way. Unlike Kneeland, he said, “I hope that people don’t move here.”

Real estate broker De Lay isn’t overly worried about the recent surge in housing prices, they said, noting “real estate is cyclical.”

The bigger concern, De Lay said, is infrastructure — making sure the state maintains water and internet access for the growing population, especially in rural areas.

Leto Sapunar is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep him writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.