Apartment Research Market Update: Third Quarter 2009
Tue, 09/01/2009 - 07:33
Ongoing job losses, combined with competition from new deliveries and the shadow rental market, will contribute to softened operating conditions in the Salt Lake City apartment market through the second half of 2009. While the local labor force is on pace to contract again this year, eliminations are easing, and several large corporations recently announced expansion plans. Elsewhere, competition for renters is projected to intensify in the coming quarters due to a dramatic spike in completions, especially in the West Jordan and Weber County submarkets.
Transaction velocity in the Salt Lake City metro has slowed during the past year, due in large part to a persistent expectations gap. As buyers become more realistic in their pricing expectations, however, and sellers start to reduce valuations in order to close deals, the disparity is narrowing, which should drive sales activity through the second half. Foreclosure offerings in Salt Lake City, meanwhile, are not expected to escalate significantly due to more conservative underwriting in recent years, enabling owners to list properties at attractive cap rates.
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