Utah’s multifamily market hits sales volume levels of $1.63 billion in 2020

Salt Lake City— The Salt Lake City office of CBRE has released its semi-annual Greater Salt Lake Area Multifamily Market Report, offering detailed insight into the multifamily market along the Wasatch Front. Encompassing data from 2020 with a 2021 forecast, the report reflects a market that continues to experience high sales volume and further cap rate compression, despite recent economic challenges.

Utah’s strong market fundamentals have allowed the state to quickly recover from the uncertainties 2020 presented. End-of-year sales volume hit $1.63 billion; the fourth year in a row that sales achieved levels in excess of $1 billion. Vacancy rates also increased slightly from 4.3% at mid-year to 4.5% by year-end. Also of note, Salt Lake County experienced a 28% increase in year-over-year absorption indicating the strength and resiliency of the market.

“Some have voiced concerns about our market potentially overbuilding multifamily product in the past few years, but activity indicates a well-balanced market,” commented Patrick Bodnar, first vice president. “Demand has continued to meet the increasing supply of units. Many people continue to migrate to Salt Lake for work opportunities in addition to seeking an amazing and affordable quality of life.”

Eli Mills, Senior Vice President, added, “Utah was recently ranked as the number one economy in the nation by 24/7 Wall Street, and the strong performance of the Salt Lake multifamily segment is evidence of this market’s adaptability and resiliency during challenging times.”
Report Highlights

  • Demand has continued to meet the increasing supply of units; at the current rate of absorption demand will outpace supply in 2021 
  • Cap rates are extremely aggressive and have seen continued compression
  • Rent growth has slowed and currently sits at 1.4% year-over-year, with vacancy only up slightly
  • A record number of deliveries are expected for 2021

This report has been prepared with current data sourced from a survey of over 60,000 units along the Wasatch Front. It highlights local market trends on rental, vacancy and cap rates; the status of the current construction pipeline; transaction volume; and much more. Produced by multifamily investment specialists Patrick Bodnar and Eli Mills, the report contains the most current and comprehensive multifamily data available for the Wasatch Front. Click here to download a full copy of the report.