Increase in share of homes being rented in 10 Utah cities
SALT LAKE CITY – Ten Utah communities showed an increase in the share of homes being rented rather than owned, part of a national trend identified through a new USA Today analysis of census data.
The national newspaper's analysis published Tuesday found more than 500 midsize and large cities throughout the county saw a boost in home rentals between the 2000 and 2010 census counts.
The percentage of occupied homes that are rented went from just under 34 percent in 2000 to nearly 35 percent in 2010, the newspaper found, with Florida, California and Arizona having the most cities where the share of rented homes grew by at least 5 percentage points.
In Utah, South Jordan saw the biggest boost in homes rented, from just over 10 percent in 2000 to more than 15 percent in 2010, USA Today reported, with West Jordan, Orem and Sandy all increasing more than 4 percent.
"We track what's going on in the country," South Jordan's community director, George Shaw, said. "Mortgages are harder to get. People don't have work. When they don't have work, they don't have money to put down on mortgages."
What's happening around the country is that many homes foreclosed upon, almost 4 million in the past five years, according to USA Today, end up being rented out instead of sold because of the drop in housing prices.
The latest report on housing prices from Standard & Poor's released Tuesday found that nationally, those prices declined 4.2 percent in the first quarter of 2011. Among the 20 cities covered by the report, only Seattle and Washington, D.C., posted gains.
The Utah Association of Realtors, using a different measure, reported the median price of Utah homes sold in April 2011 was $170,481, down 6.9 percent from April 2010.
In Salt Lake City, where the share of rental homes jumped to more than 50 percent between 2000 and 2010, an increase of almost 3 percent, foreclosures bear much of the blame and may be contributing to even higher numbers, the city's director of community and economic development, Frank Gray, said.
"More and more, we're seeing the majority of foreclosures are not being purchased by homeowners, they're being purchased by investors who turn them into rentals, as least until the market comes back," Gray said.
Gray said there are also other factors at work, including younger workers who are less interested in settling down than previous generations. And, for those who do want to buy, it's harder to qualify for a mortgage after the housing market collapse, he said.
Whatever the reasons for the shift to renting, Gray said city residents shouldn't be worried about the impact on their community.
"It's still the same family moving into those houses. They're still taking care of them," he said. "It's just a matter of how you make your payment. Do you make it to a bank or do you make it to a landlord?"
Kenny Parcell, president of the Utah Association of Realtors, said depending on the neighborhood, more renters can mean lower property values.
But, he said, that's not automatic. "You could go by some homes and never guess they were rentals," said Parcell, a Utah County-based Realtor.
While it's a tough time to be selling houses with so many would-be buyers waiting for the market to shift, Parcell said it could be worse.
"In Utah, we're doing extremely well," he said. "We're nowhere near as bad as some of those" places that are seeing bigger drops in prices.
Shaw said for the first quarter of 2011, almost a third of all single family homes in the Salt Lake Valley were built in South Jordan. Still, he said, the number of rented homes "at least for the foreseeable future, is a trend that's going to continue to grow."
Contributing: Randall Jeppesen
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