The Salt Lake area rental housing market is outpacing much of the rest of the region, according to fourth quarter 2007 data released by market researcher RealFacts.
A new report also indicates Utah has the highest occupancy rate among states in the desert region ahead of New Mexico, Nevada and Arizona.
RealFacts is a research firm that specializes in the multifamily housing market and tracks data of rental properties greater than 100 units in 15 states across the country, excluding senior and student housing.
In the Salt Lake City metropolitan statistical area, the average rent in the fourth quarter was $787, with an average occupancy rate of 96.2 percent. The $787 represents a 10.4 percent increase over the same period last year. The statistical area includes Salt Lake City, Midvale, Murray, Sandy and West Valley.
"Compared to many non-West Coast MSAs, this is very, very strong growth," said RealFacts sales and marketing director Gerald Cox.
In relation to the three other desert states, Utah ranks third in average rent prices at $771, while the Beehive state rates first in average occupancy at 96.1 percent. Additionally, Utah experienced the highest year-to-year average rent growth at 9.7 percent from fourth quarter 2006 to fourth quarter 2007 more than twice the growth of second-place New Mexico at 4.1 percent. Utah was also the only state to see its occupancy rate increase from year to year.
Within the state, the three top MSAs all saw strong growth during the last quarter of 2007 and year over year.
Top ranked Provo-Orem had the highest average rents and the highest average occupancy at $805 and 98.1 percent, respectively, followed by the Salt Lake City area, $787 and 96.2 percent, and the Ogden-Clearfield area with average rents at $668 and a 95.2 percent average occupancy rate.
Provo-Orem also saw the greatest average rent increase year to year, up 13.4 percent, with Salt Lake City second at 10.4 percent, followed by Ogden-Clearfield with an increase of 4.7 percent.
Cox cited the subprime mortgage "fiasco" as part of the reason for the improvement in the apartment market in Utah and nationwide.
He added that many of the subprime loans were made to people to buy homes they were not going to live in speculators who were purchasing properties as investment vehicles.Pointing to the once-booming condominium and single-family home markets, Cox said, "Middle-class people used these subprime loans to buy these investment vehicles and they are putting them on the rental market."