With one of the best economies in the nation, there’s
definitely demand for housing in Utah. New households are
being formed, people are moving to the state and Utahns have
the jobs to support home purchases. According to estimates
from the state, 2007 had record annual growth of nearly
85,000 people, which translates into about 25,000 to 30,000
new households. With the state expected to add another
84,000 people to the population in 2008, the growth is
forecasted to continue into next year and beyond. “The key
point is that a huge number of 20- to 30-year-olds are
trying to find their way into the labor and housing
markets,” Knold said. “That demographic push is going to be
the entire decade. You can have short-term hiccups, but
demographic pressures seem to say that can’t last very
long.” Strong job growth and low unemployment in Utah are
also supporting real estate in the state.
The most recent numbers from the Utah Department of
Workforce Services report that October job growth in Utah
was up 4.3 percent compared to U.S. job growth of only 1.2
percent during the same time period. This translates into
about 52,500 new jobs that were created in Utah over the
past year. “The job growth is a plus for housing because it
can attract people in from other parts of the U.S.,” Knold
said. Although Utah job growth is expected to slow to the
high 3 percent range for 2008, Knold says it will feel about
the same as this year, and he still expects Utah to have the
best job growth in the country. “The job market is not a
drag on housing this year and it’s not going to be next
year,” Knold said.
Not only are jobs being created, but wages are on the rise,
which further enables Utahns to buy homes. Over the past
year, wages and incomes have been growing between 5 and 10
percent, and the state forecasts that wages will continue to
increase in 2008 and 2009. Utah also has a low unemployment
rate. Over the past year, Utah unemployment has averaged
about 2.6 percent, nearly twice as good as the U.S. average
of 4.6 percent, according to data from the Utah Department
of Workforce Services. Each of these Utah-specific factors —
the growth in households, the increase in jobs and wages,
and the low unemployment rate — signify strong economic
fundamentals in the state which ultimately support a stable
real estate market. “The Utah economy is absolutely the
strongest economy in the country right now,” Matthews said.
“The No. 2 economy isn’t even close to us.”
Read Part 1 of
Utah Real Estate Forecast
Read Part 2
Read Part 3
“Reprinted with permission from Utah REALTOR® magazine,
copyright 2008 by the Utah Association of REALTORS®,
all rights reserved.”