Rent prices drop along Wasatch Front, but for how long?
Nov 7, 2023, 10:55 PM | Updated: Nov 8, 2023, 5:05 pm
SALT LAKE CITY — After more than a decade of increases, rent prices along the Wasatch Front are dropping as Utah finally follows the national trend. But renters here shouldn’t expect it to last.
Rising rents have been a staple of urban life here since at least 2011 averaging about an annual boost of 6.5% to 7% every year, according to a report from the Kem C. Gardner Policy Institute.
The pandemic brought jaw-dropping increases: 2021 alone saw rents jump about 20% in Salt Lake, Davis, Utah, and Weber counties.
This year, it’s different. Rent in Utah has dropped by 5.71% compared to this time last year, according to numbers that Rent shared with the KSL Investigators.
“They’ve been dropping since April,” Jon Leckie, a researcher and data analyst with Rent said. “And they’re actually down a little over 8.5% since April.”
So, what’s happening? Leckie pointed to the West in general where the nation is seeing some of its biggest price drops.
In Montana, rent is down by over 15%, by 10% in Oregon. Ranking fifth, sixth, and seventh in terms of rent decreases is Idaho with a 7.8% drop, Nevada at 5.72%, and Utah with a 5.71% decline.
Leckie said some remote work policies have ended, stemming the flow of telecommuters to Utah.
“We saw pretty high rates of inbound migration to the Mountain West and in Salt Lake City in particular, throughout 2022,” Leckie said. “And then the beginning of 2023, you were still positive in terms of inbound migration, but that number had dropped pretty significantly.”
Construction is another reason. The Salt Lake County market alone has added an average of about 3,600 new apartments in 2020, 2021, and 2022 according to numbers from real estate firm, CBRE.
When 2023 wraps, another 5,660 apartments are expected to come online. Add another 7,404 projected for 2024.
“Anytime you’re you see a lot of building that’s going to be a good thing for rental prices,” Leckie said.
Vacancy rates are ticking up. Salt Lake County’s climbed from 2.9% in 2021 to 5.3% this year, according to CBRE. Utah, Weber, and Davis counties have seen similar climbs.
There are also seasonal changes in demand. The fall and winter also tend to drive down rent prices. But only temporarily.
“The flip side is that we’ll pick back up again in the spring,” Leckie warned. “But I think our growth rates will be much lower than we saw it for the pandemic. I think we’ll get back to those normal kind of growth rates.”
Leckie said despite recent drops, the average monthly rent bill here is still $370 more than before the pandemic hit and it’s doubtful they’ll drop back down to that level. “We have a new floor from which rent prices can grow from rather than the ceiling that they have grown to,” he added
If you’re looking for the best rent prices, fall and winter are your best times of year.
Also, Leckie said the market’s higher capacity, the increase in vacancy rates along with the lower rents can give renters leverage in negotiating a lower rent.