If you’ve tried buying a house in the past few months, you’ve probably noticed that Salt Lake County’s current real estate market definitely favor’s the seller over the buyer. Homes are not only selling for more than ever, but homes that are for sale are being snatched up in record time. These are among the findings in a new housing report from the University of Utah’s Kem C. Gardner Policy Institute.
The report authored by James A. Wood, an Ivory-Boyer Senior Fellow with the institute, shows that Salt Lake City led the way in Salt Lake County growth in both the sale of single family and multifamily residential properties in 2016. Despite housing just 17 percent of the county population, Salt Lake accounted for 25 percent of the 13,592 single homes sold last year, with 3,406 homes sold. Among multifamily units (defined in the report as condominiums, townhomes and twin homes), Salt Lake City accounted for 26 percent of total units sold with 1,121 of the 4,321 units sold coming from the capital city.
Wood notes that Salt Lake County’s real estate market is the best it’s been since 2006, a year before the housing crash. The number of single-family homes sold last year in the county was the highest in ten years and the third highest on record, while the number of multifamily units sold in 2016 was the most ever.
Home prices are also climbing and homes are selling quickly. Wood reports that countywide, home prices increased by 48 percent between 2011 and 2016. The 2016 median home price in the county is $295,000 and is the highest on record beating out the previous high set in 2007 by $5,000.
Home are also selling faster than ever. According to Wood, single-family homes in Salt Lake currently have a record median of 13 cumulative days on the market. The previous low was 19 days in 2006 and the high was 81 days on the market in 2009.
In his report Wood argues that “Utah’s rapid demographic growth has created what appears to be a housing shortage. For the first time in 40 years, the increase in households in Utah exceeds the number of new housing units.”
The housing shortage is not just for single family homes. Salt Lake County has added a record number of apartment units since 2012, with more units on the way, yet Wood notes that apartment vacancy rates are the lowest they’ve been in decades.
Despite the housing shortage, incomes are increasing while debt and the number of homeowners with negative home equity are decreasing (a key indicator of a housing bubble) which, according to Wood, means that the demand for housing and housing price will continue to climb in 2017.
In all the housing report shows the growing demand for housing in Salt Lake City. South Jordan, the fastest growing city in the county, accounted for 8.4 percent of housing units sold in 2016. Yet, South Jordan has just 6 percent of the county’s population, a 2.4 percent difference compared to Salt Lake City 8 percent differential between the share of homes sold and share of the countywide population.
Salt Lake City also accounts for most of the multifamily units in development countywide. According to a 2016 report by CBRE Group, a commercial real estate services and investment firm, there were 7,127 multifamily units under construction or expected to start construction by 2017 in Salt Lake County. Based on Building Salt Lake estimates, Salt Lake City accounts for 66 percent, or two out of every three, of multifamily units under construction, with over 4,700 units underway in the city. CBRE estimates that there are 11,142 multifamily units in development countywide. Base on CBRE’s numbers, Salt Lake City accounts for 63 percent of those units in development, with an estimated 7,064 units planned or under construction in the city.