From Deseret News archives:
Apartments hard to find
Vacancy rates plunging in the S.L.-Ogden region
In 2006, record job growth and soaring home prices sent apartment vacancy rates plunging in the Salt Lake-Ogden region, pushing rents higher and eliminating landlord concessions, according to a new report by Hendricks & Partners.
For the three months ended Dec. 31, apartment vacancies in the Salt Lake City-Ogden region fell to 4.8 percent, down from 6.2 percent in the fourth quarter of 2005.
As of today, the apartment vacancy rate for the Salt Lake-Ogden region is closer to 3 percent, according to Kent Nelson, associate partner for Hendricks & Partners' Salt Lake office.
"I made three calls today in a survey, and the soonest that I could rent an apartment was the middle of May or the first of June," Nelson said. "The rents are going up and the leases are shortening so that they can raise rents quicker."
And it appears new apartment complexes under construction may not satisfy current demand.
The report estimated that more than 1,000 new apartment units would be available in the Salt Lake market by 2008. More than 3,000 apartment units were absorbed in 2006, the best annual total in six years and roughly double that of 2005.
But Nelson said the increase in new units coming online this year will not even come close to satisfying current demand.
Zane Morris, co-owner of Triton, a Salt Lake-based company that owns 2,300 apartment units in Utah and Idaho, said vacancy rates for his Salt Lake units are running at about 1 percent to 1.5 percent.
"It's definitely as good as it has been in a long, long time from an apartment owner's perspective," Morris said. "I wouldn't be surprised to see a 7 to 8 percent increase in rents over the year for 2007."
In 2006, the average rent for apartments in the Salt Lake-Ogden region rose 5.3 percent to $692, up from $657 in 2005.
L. Paul Smith, executive director of the Utah Apartment Association, said that even though vacancies are low and rents are rising, many choices remain for renters.
"I don't think we are in crisis mode yet," Smith said. "We need to keep in perspective that the rise in prices for single-family houses has just been tremendous. It's still cheaper to be a renter than ever before. We haven't seen 40 to 50 percent increases in rents like we've seen in prices of homes."
E-mail: danderton@desnews.com
