Fall might be our favorite time of year. It has so many great things about it including crisp air, changing leaves, football games, firepits, and most importantly, the end of another busy leasing season! Instead of taking a well deserved break, we like to use this time to make improvements, roll out new features and focus on getting better. We have several exciting announcements planned over the next few months, so stay tuned. In this month’s update however, we will discuss a surging Utah rental market, employment and debt ceiling concerns, emotional support animals, and a few cold weather updates.
Headlines
- September Jobs Report - There is simply no other way to say it; the September jobs report was extremely disappointing. The economy added 194,000 jobs and saw the unemployment fall to 4.8% but hiring is weak in several sectors including hospitality and education due to our ongoing battle with COVID-19. If you are looking for reasons to be optimistic, August’s numbers were revised up and COVID-19 started to plateau mid month when September’s numbers were reported so we could see more promising data headed our way in October.
- Weekly Jobless Claims - Weekly jobless claims are improving and totaled 326,000 for the week ending October 2nd. This marked a decline of 38,000 claims from the previous week, beat analysis expectations of 345,000 new claims, and reversed a 3-week trend of climbing claim numbers. Continuing claims, of those for individuals receiving ongoing benefits, fell to 2.71 million. Let’s hope this new trend continues into October.
- Debt Ceiling Fight - U.S. Senators wisely voted to stave off economic disaster on Thursday with a 50-48 count to extend the debt ceiling. Both sides have been playing political chicken with a potential U.S. default, but yesterday’s vote kicks the can until December when the stakes will be even higher. In addition to a potential default, the timing will also bring the possibility of a simultaneous government shutdown. What’s at stake? According to Moody’s Analytics, the damage to our economy would be severe with 6 million jobs disappearing, unemployment jumping to 9%, and a 33% stock market crash - erasing nearly 15 trillion in household wealth.
Utah Home Values and Rents Soaring
Unless you’ve been living under a rock for the past year, you already know that Utah’s real estate market has ranked among the hottest in the nation for home price appreciation (Up 22.5% since January for single family homes in Salt Lake, Utah and Davis Counties). That is of course excellent news for homeowners, but it’s not the only good news for Utah investment property owners. Rents are climbing rapidly as well. In fact, rents in Salt Lake County are up 12% to an average of $1,389/month year over year from June. If you take this trend back further to 2008, when the average rents were $793/month, rental prices have climbed 5-7% annually for a decade.
It’s not just Salt Lake County with climbing rents, as Utah’s largest county (by population) actually had the smallest rent increase of the state’s 5 major counties. According to a new report from property management software giant Entrata, between January of 2019 and July of 2021, rental rates climbed double digits in each of the state’s largest counties:
Salt Lake County - 23%
Weber County - 35%
Washington County - 43%
Davis County - 59%
Utah County - 66%
Utah County, which is home to the state’s tech corridor, led the way with a blistering 66% jump in average rents. This report, which looked exclusively at data from over 14,000 apartments, left out one of the most popular asset classes - single family rentals. Between 2006 and 2018, the number of single family rental homes grew 30.1% to 14.7 million units nationwide as institutional investors joined mom and pop in gobbling up single family rentals. Many of these owners also enjoyed unprecedented home price gains (see above) along with rent price increases since the start of the pandemic. Between climbing rents and soaring home values, Utah real estate has proven to be a wise investment over the past decade. Let’s all hope the next decade is equally as prosperous.
Utah Real Estate Market
The median sold price of single family homes in Salt Lake, Utah, and Davis counties climbed to an all time high of $537,500 in September. The increase, while modest, reversed a month of declines as home values have been holding mostly steady since June. Nationally, we are seeing housing markets cool, but several Utah cities (Salt Lake, Provo and Ogden) were recently named to the top 10 “most overvalued” list according to researchers from a pair of Florida Universities.
Median Sold Price January: $438,725 February: $455,000 March: $482,161 April: $499,900 May: $505,000 June: $530,000 July: $530,608 August: $526,000 September: $537,500 Monthly Change: Up 2.2% | Sold Count January: 1,170 February: 1,349 March: 1,726 April: 1,966 May: 1,955 June: 2,273 July: 2,074 September: 2,107 Monthly Change: Down 4.5% | Average # of Active Listings January: 1,003 February: 987 March: 1,004 April: 1,422 May: 1,439 June: 1,762 July: 2,422 September: 2,544 Monthly Change: Up 10.8% |
* all graphs/data are for single family homes in Salt Lake, Utah and Davis Counties.
Industry Updates
Rents Still Climbing Nationwide- Rental rates are still climbing nationally, albeit at a slightly slower pace than we’ve seen in months past. According to Apartment List, from August to September rents climbed 2.1% adding to the substantial gains we’ve already seen so far this year. Since January of 2021, the national median rent has climbed an astounding 16.4%. To put this figure into perspective, rent growth has averaged 3.4% per year from the years 2017-2019, so we’ve experienced about 5 years worth of rent growth in the past 9 months.
ESA’s and Fair Housing - There has been a lot of confusion surrounding tenants with emotional support animals or ESA’s. As a result, many landlords are simply unaware of how to properly handle these situations and that can result in expensive mistakes. If you want answers to questions like: “What fees can be charged?” or “Can certain breeds be restricted?”, then check out this handy guide to better understand fair housing and ESA’s.
