October 17, 2013
By TONY SEMERAD
First Published Oct 17 2013 01:01 am • Last Updated Oct 18 2013 07:17 pm
Historic numbers of Utahns are renting their homes these days, a shift that has dramatically expanded investment opportunities in rental properties.
Salt Lake City is among the most attractive U.S. housing markets for making money by owning and renting out single-family houses and apartment complexes, according to several measures. That’s been spurred by job growth, lifestyle changes and the fallout from a real estate crash-turned-foreclosure crisis that forced thousands of Utahs out of their homes.
Homeownership numbers and rental vacancy rates are both at historic lows in the Beehive State. Average rents — now at a record high $883 a month for the greater Salt Lake area — are ticking upward. Developers have announced new construction of at least 6,000 rental units and both private and institutional investors are pouring money into the market.
“It’s a big trend,” said Craig Burton, a principal at Equimark Properties in Salt Lake, a brokerage and research firm focused on the apartment sector.
One of the nation’s leading property-management company’s recently ranked Salt Lake ninth among 75 U.S. cities for its promise of good returns on rental investments. The ranking is based on vacancies, rent fluctuations, cost-to-return ratios, property appreciation and job growth.
The most important of those metrics is job growth, a spokesman at Seattle-based All Property Management said.
Utah’s nearly 4 percent gain in jobs between 2012 and 2013 “is an astronomical number,” said Jacob Colker, a senior vice president with the company. “It’s an incredibly positive sign for a city to be that far out ahead of the rest of the country.”
In fact, Utah’s employment market grew at twice the national rate, with many of those more than 43,000 jobs paying moderate wages that steer earners toward renting. But rental demand along the Wasatch Front also reflects deeper demographic change.
The housing bust and resulting economic downturn pushed homeownership out of reach for many Americans, particularly new families. Nearly 76.2% of Utah residents owned homes in 2008; that measure had dropped to 71.1% just five years later, according to federal data.
Having watched their parents endure dramatic losses in home values or even foreclosure, increasing numbers of potential homebuyers aged 21 to 45 are opting to rent instead and remain more mobile and less financially encumbered.
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