Salt Lake City is the largest city in the state of Utah, though it tends to be overlooked by real estate investors as just another part of “flyover” country. The city is the core of the Salt Lake City metropolitan area, which has a population of roughly 1.2 million. Today, the Salt Lake City is a major tourist spot in the U.S. The city is also the national hub of industrial banking. The Salt Lake City real estate market was ranked one of the toughest real estate markets for Millennials due to limited supply relative to demand.
Salt Lake is a “slightly hot” real estate market at the moment. The economy is strong and the city achieves lowest unemployment rate at 2.1%. Median days on market is 30.5 days, with inventory moving 6 percent faster than last year and 30.5 days faster than the U.S. overall. Home prices in Salt Lake City are expected to rise by record levels in 2020. A strong job market and a robust economy have contributed to the rising housing costs over the past seven years.
So what makes Salt Lake City Downtown so appealing to home buyers and investors? Downtown is the oldest district in Salt Lake City, Utah. The grid from which the entire city is laid out originates at Temple Square, the location of the Salt Lake Temple. Downtown Salt Lake City encompasses the areas of Temple Square, The Gateway, Main Street, the central business district, South Temple, and others. Throughout the last decade Salt Lake City has seen a significant increase in development, from City Creek Center to 111 Main, these and other developments have played a crucial role in improving the vibrancy of downtown. Like the rest of the state, Salt Lake City Downtown is benefiting from the region’s healthy economy.
More people live and work in downtown than ever before. But according to local real estate experts and representatives from the Downtown Alliance, despite the boom, the supply in downtown Salt Lake City isn’t catching up to the demand and more development is needed in the city’s central business district to accommodate the growing demand for housing and office space. The Urban Land Institute ranked it the nation’s third-best market for commercial development in its 2018 Emerging Trends report, fueled in part by the big names relocating here like Goldman Sachs, which now has the fourth-largest office in the world in Salt Lake City. Salt Lake City housing market is booming because of an ideal combination of business growth triggering in-migration and strong native population growth.
And with a variety of affordable homes in high-quality neighborhoods, it is a market that is not yet closed to first-time home buyers. Is Salt Lake City going to be a sizzling real estate market for investors in 2020? Salt Lake City real estate appreciation rate in the latest quarter was around 2.25%. However, it is quite unclear whether it would remain steady or not. Looking at the positive forecast, the annual appreciation rate is predicted to be between 8% to 9%. You can either choose to invest in your future, or market your home to potential buyers. If you are looking for an affordable real estate market with high potential for return on investment, you should consider Salt Lake City in 2020.
Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Please note that there are many variables that can potentially impact the value of a home in Salt Lake City (or any other market) and some of these variables are impossible to predict in advance. In this article, our focus will be on the current state of the Salt Lake City real estate market and how it can affect the investors and home buyers.
Salt Lake City Real Estate Market Forecast 2020 -2021
What are the Salt Lake City real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. Salt Lake City has a track record of being one of the best long term real estate investments in the U.S. Since 2015, the median home prices in Salt Lake City have appreciated by roughly 54.7% from $268,000 to $414,515, according to Zillow’s index. The median sales price of single-family homes in Salt Lake County was $380,000 in 2019, which was a 91% increase from 2011.
In the past year, the Salt Lake City real estate appreciated by 6%. The latest Salt Lake City real estate market forecast is that the home prices will continue to increase by 4.8% – in the next twelve months. The latest real estate data from Zillow shows that the current median home value in Salt Lake City is $414,515. Salt Lake City is currently a warm seller's real estate market. The median sales price of a single-family home will rise 5%, while the median price for condominiums/town houses will climb 10% this year.
The demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. In other words, there are less homes for sale than there are buyers in the marketplace. Zillow reports that 15.9% of the listings in Salt Lake City had a price cut in Jan 2020, which is a good thing for buyers.
Here is the Salt Lake City real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 4.8% till Jan 2021.
Salt Lake City Housing Market Forecast 2021
Here is a short and crisp Salt Lake City housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Salt Lake City is 73% and it is predicting a positive trend. The LittleBigHomes.com estimates that the probability for rising home prices in Salt Lake City is 73% during this period. If this price forecast is correct, the Salt Lake City home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Salt Lake City Housing Market Forecast.
Latest Salt Lake City Real Estate Market Trends
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the Salt Lake City area from multiple sources and compare it with past couple of years. We shall mainly discuss about median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region.
Salt Lake City is a moderately walkable city with a population of approximately 186,419 people. The state of Utah's population grew 9 percent over the last five years, much of it concentrated in Salt Lake City, where the median home price at the end of 2019 was $412,000 (still significantly lower than the average in Denver). That’s probably because the economy is booming with one of the lowest unemployment rates in the U.S., ringing in at just 2% in December 2019, according to the U.S. Bureau of Labor Statistics. The strength of the overall economy significantly impacts the real estate market as buyers' ability to support housing prices largely depends on key economic factors.
The unemployment rate in Salt Lake City dipped from 2.3% a year ago to 2.1% in December. While the city limits encompass 110 square miles, downtown runs nearly two miles from east to west and nearly two miles north to south. Salt Lake City's population is also very young. The largest percentage of the city's population falls in the 25 to 39-year-old age group. Couple that with a high school graduation rate, and a large number of college graduates and you have an attractive workforce for many large companies.
On average, homes in Salt Lake City sell after 56 days on the market. The trend for median days on market in Salt Lake City has gone down since last month. The asking price of homes for sale in Salt Lake City has increased by 8.2% since February last year, while the number of homes for sale has decreased by 47.3%, according to Redfin's data. In a healthy, balanced market, it would take about six months for the supply to dwindle to zero.
In terms of months of supply, the Salt Lake City market can tip to favor buyers if the supply increases to more than six months of inventory. However, Zillow doesn’t see things stopping anytime soon, predicting a 4.8 percent increase in home prices in Salt Lake City by Jan 2021. That shows that Salt Lake City may be heading for a hot seller's real estate market in the next few months.
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units. With 2020 being, theoretically, in the middle of a boom, there’s still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
According to Neighborhoodscout.com, a real estate data provider, one and two bedroom single-family detached homes are the most common housing units in Salt Lake City. Other types of housing that are prevalent in Salt Lake City include large apartment complexes, duplexes, row homes and homes converted to apartments. The median house price in Salt Lake City is $344,449, which indicates that home prices in Salt Lake City are well above the national average for all cities and towns in the United States.
Here is a snapshot that shows the median home values in the some of the popular neighborhoods in or around Salt Lake City.
Salt Lake City Real Estate Inventory And Sales Data
Salt Lake City has a mixture of owner-occupied and renter-occupied housing units. In the past month, 292 homes have been sold in Salt Lake City on Redfin.com, a national real estate brokerage. Additionally, there were also 135 condos, 13 townhouses, and 22 multi-family units for sale in Salt Lake City last month. The median listing price is around $460,000. The average sale price of a home in Salt Lake City was $370,000 last month, up 9.5% since last year. The average sale price per square foot is $226, up 16.8% since last year.
According their statistics, the Salt Lake City housing market is very competitive. Homes in Salt Lake City receive 2 offers on average and sell in around 39 days. A hot listing in the market can sell for about 1% above list price and go pending in around 10 days.
Currently, there are 153 homes for sale in Salt Lake City on Zillow, an online real estate database company. Additionally, there are 69 homes for rent. Under potential listings, there are about 0 Foreclosed and 60 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS). The median list price per square foot in Salt Lake City is $329, which is higher than the Salt Lake City Metro average of $214. The median price of current listings in Salt Lake City is $440,000. The median rent price in Salt Lake City is $1,595, which is lower than the Salt Lake City Metro median of $1,650.
As per Trulia.com, the Salt Lake City area usually has 766 homes for sale. There are currently 851 resale and new homes for sale in Salt Lake City, UT, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
There are currently 1152 homes for sale and 345 homes for rent in Salt Lake City on Realtor.com, a real estate listings website. According to their statistics, the median list price of homes in Salt Lake City, UT was $349.9K in January 2020, trending up 9.4% year-over-year. The median listing price per square foot was $191.
The asking price of single family homes in Salt Lake City can start from $170,000 and can go up to $4.6M for a luxury property located in Historic Holladay neighborhood. Historic Holladay is an expensive neighborhood in Salt Lake City with the median price of $720,000. The Avenues has a median listing price of $769K, making it the most expensive neighborhood in Salt Lake City. Poplar Grove is the most affordable neighborhood, with a median listing price of $269,500.
| Homes For Sale | 1152 |
| Homes For Rent | 345 |
| Median Listing Price | $349,900 |
| Median Sale Price | – |
| Sale to Asking Price Ratio | – |
| Median Rent | $1,410 |
| New Listings | 188 |
| New Construction Houses | 22 |
| Median Listing Home Price/Sq Ft | $191 |
| Home Price Range | $25K to $16.5M |
| Most Expensive Neighborhood | The Avenues |
| Most Affordable Neighborhood | Poplar Grove |
According to Movoto.com, the median list price in Salt Lake City is $526,900. The median list price in Salt Lake City was less than 1% change from February to March. Salt Lake City's home resale inventories is 307, which decreased 6 percent since February 2020. The median list price per square foot in Salt Lake City is $255. In February 2020 it was $248.
Salt Lake City Foreclosures And Bank Owned Homes Statistics 2020
As per Zillow’s data, the percent of delinquent mortgages in Salt Lake City is 0.4%, which is lower than the national value of 1.1%. There are currently 317 properties in Salt Lake City, UT that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 330. In January 2020, the number of properties that received a foreclosure filing in Salt Lake City, UT was 13% higher than the previous month and 17% higher than the same time last year.
| No. of Foreclosures in Salt Lake City | 317 (RealtyTrac) |
| Homes for Sale in Salt Lake City | 330 |
| Recently Sold | 5543 |
| Median List Price | $329,450 (0% drop vs Dec 2018) |
In Salt Lake City, the zip code with the highest foreclosure rate is 84128, where 1 in every 1196 housing units is foreclosed. 84119 zip code has the lowest foreclosure rate, where 1 in every 2216 housing units becomes delinquent.
Why Should You Invest In The Salt Lake City Real Estate Market?
Now that you know where Salt Lake City is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Is Salt Lake City a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Salt Lake City is good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2020.
If you are looking to make a profit, you don’t want to buy the most expensive property on the Salt Lake City real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Salt Lake City that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
Let’s take a look at the number of positive things going on in the Salt Lake City real estate market which can help investors who are keen to buy an investment property in this city.
1. Positive Demographic Trends
The total fertility rate for the United States hovers between 1.8 and 2.1 depending on the source you want to believe. Mormons, the majority of the population in Salt Lake City and Utah as a whole, have an average of 3.4 children. This puts constant pressure on the Salt Lake City real estate market. It also makes the Salt Lake City housing market unusual in the demand for homes with multiple bedrooms suitable for large families. There is a niche in the Salt Lake City real estate market for large luxury homes, but it is notable for the sheer demand for 4 and more bedrooms in affordable neighborhoods.
2. Near Certain Real Estate Appreciation
Demand is one factor in the equation that determines the price of housing. The other is supply. Salt Lake City has seen an increase in housing construction since the economy rebounded under Trump. However, geography limits how and where homes can be built. This is causing home prices to appreciate significantly, and there is no evidence Salt Lake City could over-build the way Phoenix did before the Great Recession. A subtle issue hitting Utah is the relative shortage of skilled building trade talent despite the influx of people coming to work in business and tech.
3. Known Development Corridors
Salt Lake City sits at the intersection of I-80 and I-15. Industry tends to spread out along the highways, and housing follows. Investors in the Salt Lake City real estate market can buy land to develop or invest in housing projects being built in expectation of workers who will soon move to the area.
4. Salt Lake City Market Is Everything Which California Isn’t
California is experiencing an incredible divergence from its ideals. While there is still a red-hot housing market in Silicon Valley, the state also has the highest poverty levels in the nation. They’re chasing businesses out of the state through oppressive regulation and high taxes. In contrast, Salt Lake City is booming because it is business friendly.
So many California tech firms have relocated to Salt Lake City that the area is now nicknamed “Silicon Slopes”. Forbes listed Salt Lake City first on its list of “next tech meccas”. The city is already home to many new startups. Where there are currently good paying jobs, new residents are sure to move in. And that only puts more pressure on the Salt Lake City housing market. The very low crime rate in Utah compared to surrounding states is merely an added bonus.
5. The Low Cost of Living in Salt Lake City
Housing aside, another reason why people relocate from the West Coast to Utah is the low cost of living. In fact, the $400,000 house in Utah with four bedrooms and a yard looks cheap when you sold a two bedroom condo for 50% more than that in California. The overall cost of living in Utah is cheaper than the nation overall, and it is far cheaper than California, so many choose to relocate here from the high-cost states on the coast.
6. The Growing Salt Lake City Rental Market
The Salt Lake City housing market can’t keep up with demand, and this is pushing many Millennials and new residents into the rental market. While many would like to own a home, affordability is an issue for the young would-be home owner; the average Millennial earns $68,000 a year while the median home price is $400,000. This explains why Salt Lake City has some of the fastest growing rents in the country.
Rents in Utah as a whole grew 2.6% year over year, only surpassed by Nevada’s blistering 3.5% increase. In 2010, downtown Salt Lake City had just 5,200 rental units. By 2020, that number will nearly double to 10,000, including units in a new $90 million high-rise called Liberty Sky, a 24-story all-residential tower unprecedented in Salt Lake’s history.
7. Landlord Friendliness
Salt Lake City does require landlords to get a business license, even if you just own one rental home. Fees that you are required to pay as part of the rental program depends on how well maintained the units are. However, Salt Lake City in general is very landlord friendly. Eviction for nonpayment of rent can get someone out in two to four weeks. Courts regularly side with landlords and award triple fees for damages by a tenant. If someone violates the terms of the lease, they have three days to correct the situation. You can end a month to month tenancy with 15 days of notice.
8. Affordable Multi-Family Units
Investors in the Salt Lake City real estate market may be pleased to know that multi-family housing is surprisingly affordable. The average townhome costs around $270,000. Two unit structures cost less than the average single family home, coming in at $350,000. Units with five or more apartments cost about $230,000 each. Note that the median rent throughout the Salt Lake City area is around $1600.
9. Multiple Luxury Markets
Downtown Salt Lake City properties near the Mormon Temple command a premium, but that isn’t the only upscale market in the area. Park City and the northern side of Oakley, too, have properties that cost on average well over a million dollars. As you move up Highway 80 toward Hoytsville and Wanship, properties routinely cost more than a million dollars despite the hour commute to Salt Lake City.
10. Housing Is Infinitely More Stable than Other Real Estate Sectors in Salt Lake City
Real estate investing in Utah is not limited to the Salt Lake City housing market. One could invest in industrial properties, commercial real estate and agricultural land. Investing in the Salt Lake City real estate market should be in housing, though, for several reasons. First, the office and retail markets in Salt Lake City are cyclical, and this is only partially mollified by investments by the Mormon Church when prices are low. Compare this to the stability and certainty of the housing market, since the population growth is near 2% and job growth is at 3%.
Investing in Salt Lake City Real Estate: Advice For New Buyers
Maybe you have done a bit of real estate investing in Salt Lake City but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Salt lake Utah housing prices have jumped significantly over the past seven years. The cost of homeownership in the Salt Lake City metro area is likely to rise to record levels in 2020.
A good cash flow from Salt Lake City investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Salt Lake City real estate investment opportunity would be a key to your success. If you invest wisely in the Salt Lake City real estate, you could secure your future.
The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Salt Lake City investment real estate and you should be able flip it for a lump sum profit.
The neighborhoods in Salt Lake City must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools and shopping malls. Some of the popular neighborhoods in Salt Lake City are Yalecrest, Liberty Park, Federal Heights, Toronto, Highland Park, South Carolina, Ensign Place, Central City, Fairpark, Capitol Hill, Marmalade Hills, East Central, Liberty Wells, Central City-Liberty ells, and Gateway Townhouses.
As with any real estate purchase, act wisely. Evaluate the specifics of the Salt Lake City housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in Salt Lake City. If it is your first time to invest in Salt Lake City real estate, then you would have to be aware of common beginner’s mistakes. Beginners would usually follow the media, buy a property and wait for its value to increase. This could be risky. Real estate investing requires research. We recommend doing your own research or hiring a real estate investment specialist for guidance.
Other Good Markets To Invest in Real Estate in 2020
Like the Salt Lake City real estate market, the other housing market to go for to diversify your investments is the Baltimore real estate market. The Baltimore real estate market has been in decline for years, but a number of spots offer significant returns. And there are signs that the city is starting to turn around. The Baltimore real estate market around the new industrial parks built to cater to Amazon will boom, because we can expect as many jobs from Amazon’s suppliers in those areas as Amazon itself – and those workers will want to live close to work. The Baltimore real estate market is promising and shows a new increase of opportunities for both buyers and sellers.
Similarly, Cincinnati, OH is another great market to get started in real estate investing. Cincinnati real estate market is on the upswing and looking strong for the foreseeable future. It provides a number of opportunities to investors, regardless of the market you want to invest in.
Let Us Help You In Buying Your First Investment Property In Salt Lake City
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. It is important to analyze both broader market conditions and your specific property to determine how the property's value may fare over the course of time. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability. Consult with one of investment counselors who can help build you a custom portfolio of turnkey cash flow rental properties in the various growth markets across the United States.
All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching top real estate growth markets and structuring complete turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
*Remember, caveat emptor still applies when buying a property anywhere. The aim of this article was to educate investors who are keen to invest in Salt Lake City real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References:
- Family size
https://www.deseretnews.com/article/865628480/Mormon-families-are-Americas-largest-new-study-finds.html - City metro
https://en.wikipedia.org/wiki/Salt_Lake_City - Housing supply
https://www.deseretnews.com/article/900024786/salt-lake-city-ranks-among-top-seeing-gains-in-housing-inventory-report-says.html
http://www.cbre.us/people-and-offices/corporate-offices/salt-lake-city/salt-lake-city-media-center/cbre-releases-2018-salt-lake-city-real-estate-market-outlook - Not California- Pro-business
https://www.ksl.com/?sid=46284050&nid=1426 - Rental market
https://www.apartmentlist.com/rentonomics/national-rent-data - Landlord friendly
https://www.buildium.com/laws/utah-evictions-process/ - Multifamily
http://www.city-data.com/city/Salt-Lake-City-Utah.html
