Salt Lake City and Denver have more in common than the fact they are big cities, near big mountains. That is according to new data from realtor.com. “Salt Lake City's housing market is seeing the same rapid growth patterns that occurred in Denver in early 2015 and 2016 and that drove the city to the top of the nation's hot housing markets,” the data says.
The Salt Lake City metropolitan area is projected to have one of the strongest housing markets in the country in 2018, with home prices and sales expected to reach 4.5% and 4.6% growth, respectively, over last year, says realtor.com. Just like Denver, the factors driving its strength are a growing economy, relative affordability and an increasing millennial population. In fact, the company says that with home prices growing three times faster and supply moving a full week faster in the span of a year, Salt Lake City resembles Denver at the beginning of its boom.
“In just a handful of years, an influx of jobs and millennials drove Denver's housing market from strong and stable to rising like the Rockies,” says Javier Vivas, director of economic research for realtor.com. “If Salt Lake City is able to continue generating jobs and attracting well-educated young people, the market has the potential to continue to climb to 'Mile High City'-type heights.”
A primary cause of Salt Lake City's momentum is its robust economic picture and growing population. The local Salt Lake City economy is growing at 9% year-over-year, more than two times faster than the national average, Vivas adds. The city is also adding jobs at nearly three times the overall U.S. pace, with employment growing at 3.6% year-over-year. Household incomes in the area are growing at 5.4% year-over-year, nearly twice the rate for the country as a whole. Last year, population topped 3 million for the first time, which has contributed to an uptick in demand in the market, according to the company's data.
The key, though, is that despite its strong economy, Salt Lake City remains relatively affordable, particularly in comparison to other hot mid-to-large cities. The median sales price in Salt Lake City at the end of 2017 was $273,000, which is $20,000, $70,000 and $90,000 lower than other growing markets of Austin, Texas; Portland, and Denver, respectively. Realtor.com reports that a median income household in Salt Lake City can buy a median-priced home with 32% of its annual income, roughly in-line with the generally accepted maximum.
Market dynamics in Salt Lake City are being driven by its larger-than-average, and growing, proportion of millennials. In fact, its millennial population is 1.3 times higher than the U.S. average and made up 46% of its mortgages in 2017, beating the U.S. average by 9%.
Although realtor.com does predict that demand will continue to be strong and constant in Salt Lake City over the next few years, the company says that the longer-term outlook of that depends on its ability to continue to create jobs for young professionals and drive housing market demand.
To learn more about other markets that are hot around the region and are best bets for investors, stay tuned for the March/April issue of Real Estate Forum, which will feature that very subject.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
