It was another historic and record setting year for the Utah multifamily market, and for the economy as a whole across the state. The strength of Utah's apartment, and overall housing, market is directly related to the state's employment and population growth. And in 2018, the Utah apartment rental, development, and sales markets continued to reap the rewards of a robust economy and a state with the highest growth rate in the country over the last decade.
Utah continues to experience impressive population growth--although the state grew at a slightly lower rate in 2018 than in 2017. According to The University of Utah's Kern C. Gardner Policy Institute, population growth for the state hit a historic high in 2017 when Utah added 58,989 people, but growth dipped to 52,664 in 2018. Still an impressive growth rate of 1.69%, slightly above the average growth rate in the state for the past 10 years.
Since 2010, Utah has increased its population by 402,000 people, which equates to the highest growth rate in the country according to the Census Bureau. But, according to the Ivory Boyer Construction Report there have only been a total of 144,639 residential building permits issued in Utah during that time. These permits include apartments, condos, detached single family homes, and all other forms of residential housing. The Salt Lake Chamber recently estimated that there are 54,000 more households In the state than housing units. In short, Utah's population is growing much faster than new housing is being built, and there is a shortage of residential units across the housing spectrum. The multifamily market has benefitted greatly from this housing deficiency.
Along with Utah's relatively low cost of living and high quality of life, the big driver for the state's population growth is the extremely strong job market. At year-end 2018, Utah's unemployment rate stood at 3.2%, one of the lowest in the country. Data from The Bureau of Labor Statistics also places Utah as a top 5 state in the country for job growth, with a 2.9% increase over 2017. Although job growth may slow over the next couple years, Utah will continue to lead the country as a top state for business, technology, fiscal stability, and employment opportunity. Utah's strong job market & consistent population growth will provide a steady and expanding foundation for the apartment market to thrive.
SALES VOLUME AND TRANSACTIONS
The state is continuing to experience an influx of capital preservation buyers with long-term investment goals and ever-increasing confidence in the Utah market. Private and institutional investors from across the country, and world, have the Wasatch Front on the top of their list for apartment investment markets. The recently released PwC Emerging Trends In Real Estate report rated the Salt Lake metro region as the #2 market in the country to invest in multifamily for the next year. And with thousands of new units under construction, and sales volume setting another record in 2018, there will be no shortage of investment capital coming to the Beehive State in the foreseeable future.
For the fourth year in a row, apartment sales volume set a record in the state. For the first time ever, total multifamily sales transactions passed the $1.4 billion mark for buildings of 10+ units. There...