According to the latest Zonda Market Ranking, the Salt Lake City metro area was significantly underperforming at the end of January and is in the company of metros like San Francisco; San Jose, California; Reno, Nevada; and Portland, Oregon.
Housing affordability has been a critical hurdle, and builders have offered incentives and mortgage rate buydowns to attract buyers. They have adjusted their product mix to cater to entry-level buyers, with the most under-construction inventory priced below $350,000.
As a result, the median new-home closing price has been under pressure, falling sharply over the past year and is similar to existing homes.
Strengths
Utah's tech industry is booming. Research by SmallPDF, a document management company, ranked Utah ninth among the best states for tech work. There is a high concentration of tech jobs with 39.03 jobs per 1,000 being tech positions.
Weaknesses
Multifamily construction is expected to slow in 2024 but remains at one of its highest levels in recent history because of the development of new apartments. Over 4,500 units were expected in 2023. However, year-over-year rents are starting to slip.
Supply
Quarterly housing starts increased 100.4% over a year ago, while the number of available vacant developed lots is 5,227, down 2.6% from the same quarter last year. In terms of supply/demand balance, the market area is 0.86% undersupplied.
Sales
New-home sales in the Salt Lake City metropolitan area increased 38.3% year over year to an annualized rate of 2,732 units in February. Existing-home closings for the 12 months ending in January posted a year-over-year decline of 24.7% to an annualized rate of 15,036 units.
Prices
The average list price for a new detached home in the region decreased 10% from 2023 to $575,278 in February, while the average list price for a new attached home increased 5.8% over the same period to $466,971. Homes priced between $350,000 and $450,000 experienced the most closing activity over the past year. The new-home affordability ratio for a detached home reached 24.2% in December.
Community
The current population of the Salt Lake City metropolitan area is approximately 1,308,870 people and is projected to increase by 1.1% this year. There are approximately 448,030 households in the region, which is up 1.5% year over year. Forecasts show that current household formation is expected to increase by an annual growth rate of 4.3% for 2028. Incomes increased by 7.9% from the previous year to $106,370.
Did you know you can access free housing data with Zonda's Market Snapshots? Reports include new-home supply and valuation, resale listings, jobs, market forecasts, and more. Get your complimentary market snapshot for your local CBSA today.
