Utah’s Housing Market: Massive influx of new residents dramatically changes pricing, inventory, space and community dynamics
A look inside of the crystal ball of veteran real estate broker Babs DeLay to see where the next hot Salt Lake City neighborhoods will be found.
On this very spirited conversation of the Utah Stories show seasoned real estate broker Babs DeLay from Urban Utah Homes and Estates and I discuss the current real estate market in Salt Lake, Utah’s housing crisis and where the next hot Utah neighborhoods are emerging and where they will be in the next 10-15 years.
Babs and I discuss what has happened in downtown Salt Lake City in the past 35 years. I described it as a place “not habitable for human beings” transforming itself to a place where everyone wants to live.
How did this happen?
“Magically it was because of Didi Coridini as part of the Olympic trade-off. We had to get new freeways and new freeway exchanges, but the city only had 125,000 residents. It was kind of brilliant, she couldn’t tax us anymore, she needed more land to tax, so the on and off-ramps got pushed further west, which allowed for Gateway to support all of the services for all of the people.
Who is buying all of the apartments and condos in and around Salt Lake City and Sugar House?
The millennials are deciding that they want to buy. They want to partner up and they want to have children. They have a desire for stability. Statewide we are down about 45-50,000 housing units around our state. Utah’s capital city had slightly more than 12,000 apartments back in 2000. The number grew by 2,054 units last year. But builders have been on an apartment building construction tear. 91% of Salt Lake City’s building permits were for apartments between 2013 and 2017.
Not for condos and not for homes but apartments?
Yes, and everything you see that are high-rises, those are all for rent. Those are for people moving here temporarily and deciding if they want to stay. if you want to stay here, what are you going to buy? Rose Park is becoming unaffordable. Are people wanting to live out in Daybreak? Well now they are.
A lot of folks are working down in Utah County. They don’t want to stay down there.
A friend of mine said that the average commute in San Francisco is three hours. Here you might find a commute that is 30 to 45 minutes, so a lot of people are finding that attractive from places like California.
Are people moving here in droves from California?
I had an open house here and about sixty people came through. Easily about half of the people who came were people who were relocating here, who have been renting or are currently renting and they are ready to buy. A bunch are married with children. A lot of people are missing out.
Where are the next hot neighborhoods going to be?
Let’s look into my crystal ball and see where things are going next. Look what is happening: we have an airport that’s going to employ thousands of people. Next to that we have a prison that will be opening soon. Look how many people that are going to employ. Next to that we have an Inland Port. God only knows how many people that is going to employ.
Where are all of those workers going to be coming from? Tooele, Gransville. I know that two huge warehouses in Tooele were just rented for clipping bud.
What do you think about the inland port and the prison being built on our nice little swamp out there?
Building-wise it’s costing double or triple what they thought it was.
We discuss mosquito abatement costs. And we further discuss what the migratory birds will eat if we poison billions of mosquitos. We agree is probably not the best possible place for these massive facilities.
The unusual architecture and preservation efforts in the Avenues
Babs talks about how the tiny lots of the Avenues were by design when the Mormon pioneers plotted out the city, lots were progressively smaller the closer to downtown, and larger farther away. The little garages there weren’t garages. They were carriage houses.
Is there A Softening Coming in Utah’s Real Estate Market?
We are going to have a recession in the next year. I have a friend who has a tile business. “Hey tile for less!” Before the tariffs they were $5 now they are $25.
Another friend was going to replace the metal roof, did it for $9,000, now it’s $25,000. Because all of those materials are coming from China.
The next recession will be nothing like the last one. I don’t think we will see bargains. I think prices will soften but they aren’t going to go down like ten or twenty percent.
Listen to our conversation with Babs below: