Finding an apartment along the Wasatch Front is becoming more difficult and more expensive, according to a new report.
The survey by Apartment Realty Advisors of over 65,000 apartment units in complexes with more than 10 units found that rental prices increased 8.8 percent from the end of 2006 to the end of 2007, the largest annual increase since 1993.
At year-end 2006, the average overall rental rate was $663 per unit, compared with $717 per unit at year-end 2007, the report showed. That is an average of 85 cents per square foot in 2007, compared with 78 cents per square foot in 2006.
"Rent growth is the highest it's been in over a decade," said Jed Millburn, investment associate with Apartment Realty Advisors.
Millburn said the rise in rental prices is due to the limited supply of new apartments, which allows property owners to raise the rates.
The report said the same trend can be found in Salt Lake, Davis, Utah, and Weber counties. Each county saw a decrease in the amount of vacancies in rental units.
For Salt Lake County, average rental rate for 2007 was $733 per unit, compared with $674 per unit at year-end 2006, the report showed. In Davis County, the year-end 2007 rental average was $670 per unit, compared with $630 per unit at the end of 2006.
For Utah County, the average 2007 year-end rent was $705 per unit, compared with $660 per unit at year-end 2006. Weber County saw its year-end average go from $596 per unit in 2006 to $623 per unit last year.
Beside rising rents, the report said the 2007 year-end vacancy rate in Salt Lake County was the lowest in 10 years, at 4.5 percent, which Millburn said will likely continue for the foreseeable future. In Utah County, vacancies dropped from 3.8 percent in 2006 to 3.6 percent in 2007, and the 2007 rate was a nearly 50 percent drop from the 2005 vacancy rate of 7.1 percent.
"The apartment market is projected to be tight through 2008, and there will be some new units that will help out in 2009," he said.
The relatively strong Utah housing market is among the factors affecting the area's apartment market, he said. The report noted data from the Office of Federal Housing Enterprise Oversight that said the value of the average Utah home rose 12.89 percent during the 12-month period ending September 30, 2007.
Millburn said the lack of affordability in the current housing market is forcing many people into the rental market. Rents will probably continue to trend upward in the coming months."A fundamental rule of rental housing is that job growth drives the rental market," he said. "We were number one in job growth, number one in population growth, number one personal-income growth, and all of these factors point towards increased rental rates."