Salt Lake City just added another distinction to it’s growing resumé. Utah’s capital city is the smallest real estate market to ever crack the top 10 in an annual list of most desirable U.S. markets for real estate investment and development, based on a poll of 1,600 real estate experts. The city moved up 15 spots on the list to take the third spot in 2018, just behind Seattle and Austin Texas.
The yearly list is part of the Emerging Trends in Real Estate report produced by PricewaterhouseCoopers LLP in collaboration with the Urban Land Institute and provides a regional look at the country’s largest 78 real estate markets.
The report’s authors attribute Salt Lake’s high ranking to region’s large Millennial population, amount of real estate investment, strong economy, growing tech sector and cost to do business.
The Salt Lake City market ranked first in investment opportunity with first place rankings in office and retail buy recommendations, and a second place ranking in multifamily buy recommendations.
Despite strong investment opportunities, the city ranked tenth in development opportunity. The report’s authors sited lower investor demand and that the ability to secure capital for both investment and development is more difficult to obtain here than in other markets.
Yet real estate experts see Salt Lake as an emerging market ready for investment that should begin to attract more investor demand. The Salt Lake market ranked fourth in homebuilding prospects and tenth in development/redevelopment opportunities.
With Salt Lake’s strong economy and quality of life, real estate experts expect growth to continue. On the economy side, Salt Lake scored points for its balance of tech and finance, strong startup economy, rising wages, airport connectivity and its connection to high-speed internet.
In terms of quality of life the city did was praised for its top-ranked outdoor activities, dining scene, cultural scene and for having one brewery per 78,000 residents.
Even with increasing real estate opportunities and projected economic growth, two obstacles remain, a shortage of construction workers and a tighter lending market.
Authors of a September 2017 housing report by Cushman & Wakefield found that the number of multifamily units under construction is the highest it has been in 30 years. Yet 2017 was the sixth consecutive year that the Salt Lake market’s residential vacancy rate was below 4 percent.
The report’s authors argue that new multifamily projects in Salt Lake County are not being built fast enough to keep up with demand and call for slightly higher levels of development to ease tight market conditions. But to meet this growing demand for residential and commercial development, developers will need to overcome a labor shortage and find new ways to finance projects until local financial institutions ease up on lending restrictions.
|Top 10 markets for 2018|
|2||Austin, Texas (1)|
|3||Salt Lake City (18)|
|4||Raleigh-Durham, North Carolina (7)|
|5||Dallas-Fort Worth (2)|
|6||Fort Lauderdale, Florida (35)|
|7||Los Angeles (5)|
|8||San Jose, California (17)|
|9||Nashville, Tennessee (6)|