Asking Price for Multi-Unit Slashed 3.66% YOY

Salt Lake County Rents Rebound to $1745/m; Pleasant Grove 13-unit sells for $2.4M

Author

David Robinson
August 21, 2024

This week in the Canovo Report…

  • Salt Lake County Rents Rebound to $1745/m

  • Asking Price for Multi-Family Slashed 3.66%

  • Pleasant Grove 13-unit sells for $2.4M

  • Ogden 21-unit Listed for $181k/Unit.

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Happy Investing,

David

New Listings

> Our team has analyzed these deals using our custom bulk property analyzer. If you’d like more detail regarding any of these listings, click the links below.

Canovo Group may not be the listing brokerage for the above properties. The information provided is not guaranteed and should not be relied upon to make investment decisions. Buyers should complete their own analysis and due diligence before making any investment.

Sold Listings

> Here's a roundup of multifamily properties sold over the past week. We've estimated their selling cap rates using our bulk analyzer.

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Utah Market Snapshot

> Multi-Unit (2+ Units): Total Sold and Price Per Sq Ft

  • The median sold price/sf for multi-unit property is up 6.74% year to date going from $238 last year and $254 this year to date.

  • The total listings sold for multi-unit property is up 18.45% year to date going from 271 last year and currently at 321.

> Multi-Unit (2+ Units): Active Listings and Price Per Sq Ft

  • The median asking price/sf for active multi-unit listings is down 3.66% going from $266 last year and $257 currently.

  • The total number of multi-unit listings is up 45% going from 182 last year and 264 currently.

> Single Family Homes: Total Sold and Price Per Sq Ft

  • The median sold price/sf for single family homes is up 3.47% year to date going from $224 last year and $232 this year to date.

  • The total listings sold for single family homes is down 1.72% year to date going from 22,839 last year and currently at 23,232.

Rates & Financing

> Mortgage Rates as of 8/21/024

Source: Mortgage News Daily

Property Management

> Unleash Profits: Embrace Pets in Your Rentals!

For the longest time a no pet policy was standard for landlords. Well times change.... An increased number of people have pets and they consider these pets family. Along with these changes has come legislation for Emotional Support Animals (ESA). Landlords are not allowed to discriminate against emotional support animals or service animals. Now, both of these animal classifications need a certificate to be verified but there are fraudulent certificates available online and verifying them can be expensive and time consuming. Also if they are certified you are not allowed to collect any extra security deposit or pet rent.

Instead we would recommend catering to the pet owners and charging accordingly. Allow pets, and ask for a reasonable monthly pet rent and collect a pet deposit on top of the original security deposit. These fees should be enough to replace the carpets after a couple of years and pay for your property management company to coordinate the repairs. (Netopi charges 10% for reference )

We have found that by allowing pets it avoids liability and can increase profitability of the unit if done the right way. For more info or questions feel free to contact us at the link below.

Get professional property management for only $39/unit. Learn more.

Headlines & Insights

Wadsworth Multifamily has released their "Market Trends Q2 2024" report which highlights key developments in the Utah apartment and housing markets across Salt Lake, Davis, Weber, and Utah counties. Rising rents, increasing home prices, and elevated vacancy rates due to significant new construction are creating affordability challenges for both renters and homebuyers. Despite some fluctuations, the market remains competitive with ongoing concerns about affordability and delayed projects due to economic conditions.

Salt Lake County:

  • Rent Trends: After a 39% increase during the COVID-19 pandemic, average rents in Salt Lake County fell by 4.4% from Q3 2022 to Q4 2023. However, rents have since rebounded, increasing by 1.5% year over year to an average of $1,745 per month in Q2 2024.

  • Vacancy Rates: The total market vacancy rate rose to 7.1%, with stabilized properties at 3.0%. Downtown Salt Lake experiences the highest vacancy and concession rates.

  • New Construction: Over 13,500 units are under construction, with another 25,000 units planned, though many face delays due to high interest rates.

  • Home Prices: Median home prices increased to $550,000, up 5.5% year over year, making the market less affordable.

Davis and Weber Counties:

  • Rent Trends: Average rent increased by 1.3% year over year, with renters paying about $1,616 per month. However, rents have been flat since their peak in fall 2022.

  • Vacancy Rates: The total market vacancy averages 8.7%, with stabilized properties at 3.7%.

  • New Construction: Approximately 3,500 units are under construction, with 8,500 more planned. Delays are expected due to economic conditions.

  • Home Prices: Median home prices rose 2.5% to $485,000, with buying a home being 1.7 times more expensive than renting.

Utah County:

  • Rent Trends: Rents decreased by 1.7% year over year to an average of $1,649 per month, though rent remains 30% higher than in 2020.

  • Vacancy Rates: The total market vacancy is 8.6%, with stabilized properties at 3.1%. Concessions, such as free rent, are common due to high vacancy rates.

  • New Construction: Over 4,400 units are under construction, with an additional 9,900 planned. However, delays are expected.

  • Home Prices: Median home prices increased by 4.2% to $506,000, with buying a home now 1.8 times more expensive than renting.

Overall, the report highlights rising rents, increasing home prices, and high vacancy rates due to significant new construction across the counties. The market remains challenging for both renters and homebuyers, with affordability concerns persisting despite some fluctuations in rent and home prices.

Other News and Reports

Market Rebound: CBRE reports that the multifamily market has stabilized, with vacancy rates holding and rents expected to rise. Investor sentiment is positive, foreseeing healthy transaction volumes as the market absorbs current supply pressures, particularly outside the Sun Belt.

Sales Slowdown: Despite a drop in mortgage rates, sluggish home sales are expected to persist, as reported by Fannie Mae's Economic and Strategic Research Group. The low purchase sentiment and modest response to more favorable rates suggest affordability remains a significant barrier, with a meaningful recovery in homebuying not anticipated until 2025.

Rent-First Lifestyle: A Harris Poll survey reveals that 1 in 4 Americans now prefer renting over buying, including cars, clothing, and furniture, primarily due to personal preference rather than financial necessity. This trend underscores a shift towards a rent-first lifestyle amidst the backdrop of high mortgage rates and housing affordability challenges.

Commission Revolution: Today marks a pivotal change in real estate practices due to NAR settlement mandates, affecting buyer agent agreements and compensation visibility. Agents must now secure explicit agreements before home showings and adapt to new methods of disclosing compensation, with a push for transparency and strategic adaptation to these regulatory changes.

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David Robinson

Principal Broker/Managing Partner

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