Utah’s rental market, employment growth outpacing nation

Homeownership is on the decline in Utah as rental vacancies are way down.

One of the nation's leading property management companies recently graded one Utah city among the nation's top 10 for returns on rental investments, according to The Salt Lake Tribune.

All Property Management, a Seattle-based company, ranked Salt Lake City ninth on its list of 75 cities for its comparative success in five categories: rent fluctuations, vacancies, property appreciation, cost-to-return ratios and job growth.

Jacob Colker, a senior vice president with All Property Management, declared job growth as the most crucial factor in the grading process.

Utah, which has shown a 4 percent gain in jobs from 2012 to 2013, was primed to take advantage.

"It's an incredibly positive sign for a city to be that far out ahead of the rest of the country," Colker told the Tribune. He added that the 4 percent gain is an "astronomical number."

Also helping fuel the rank are rental vacancy rates, which are currently sitting at record lows.

Along with job growth, the Tribune said the rental market is being fueled by changes in lifestyle and the burst of the housing bubble.

While more than 76 percent of Utah residents owned homes in 2008, that figured plummeted in 2013 to 71.1 percent as residents have grown skittish on buying.

Younger adults, especially, are staying away from purchasing homes, according the the Tribune. Potential homebuyers in Utah ages 21 to 45 are deciding to rent instead of buy after watching the foreclosure pitfalls of neighbors, friends and family.

RealtyTrac recently revealed that Utah is No. 11 in the nation for foreclosure activity. The national average for foreclosure filings is one in every 348 housing units. In Utah, that number is one in every 285 units.

Reasons for return on rental investments
As homeownership numbers plunge in Utah, rental vacancy rates are floating at historic lows. Average rents, at $883 per month, are at record highs and continue to ascend.

Investors in the area are taking note. Developers have announced plans for new construction that would push roughly 6,000 rental units into the market. Funding for the major construction overhaul is being provided by private and institutional investors.

"It's a big trend," Craig Burton, a principal at Equimark Properties in Salt Lake, told the Tribune. Burton's company is a brokerage and research firm with a focus on the apartment sector.

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