May 2024 Newsletter
Market Minute
According to ABC4, “In the last year, those moving to Utah accounted for 56% of the Beehive State’s population increase.” Continued population growth combined with a decrease in units under construction over the next several quarters, leads experts to believe that vacancy will begin to trend downward after a period of historic highs.
The graph below from Costar displays the five major markets in Utah, their trending average vacancy over the last 4 quarters and also a forecasted average vacancy for the next 5 quarters.
We observe that almost every major market is forecasted to have a significant drop in average vacancy with top 3 markets dropping from 14-16% vacancy to about 10%.
Lastly, the ABC4 article also noted: “Over the last year, Utah County accounted for 39% of the state’s population increase. That’s followed by Salt Lake County, at 25%.
‘I think what we’ve been seeing is that as Salt Lake County has become more and more expensive, you’ve been seeing more people migrate into what we call the ring counties or even Utah County’”.
‘Nxt Level’
It's no secret that we have entered a difficult and competitive time in multifamily real estate. With that being said, we are pleased to announce that we have achieved the milestone of being 100% leased, and 97% occupied at one of our larger properties that was in lease-up! According to Costar, “Vacancy in [that market] has soared to 14.9%, more than double its historical average of 7.0%.” Despite that, we have still managed to have success in the area.
Additionally, in another market, we also hit the milestone of being 99% occupied and 100% leased on another property we manage at 100 units! We recently took-over this project at less than 80% occupancy and within two months, reached stabilization.
Our team has worked hard to serve others like family, diligently follow-up with leads, and provide a high quality resident experience. The combination of those things and more has allowed us to succeed in a competitive multifamily market.
Ask the Editor
Question: What unit types are most in-demand by tenants?
Answer: This is a great question! It definitely varies by market but I would say that as a general trend we have observed that tenants are gravitating towards smaller units, 1 and 2 beds as opposed to larger units like 3 or 4 beds.
For example, we recently toured new projects in Logan, UT and the feedback we got from the property managers at those sites was that their 1 bedroom units and units situated in the middle floors (i.e. floors 2 and 3 of a 4 floor building) leased more quickly. This leads us to believe that tenants are more price-conscious in today’s market and as families trend towards being smaller, the need for larger units is not as common as it once was. This was surprising to discover especially in the Logan, UT market where most projects had been tailored towards larger families previously.
As a reminder, feel free to ask any questions about the apartment world to sales@nxtmgt.com and we would love to feature and answer the question in next month’s newsletter.
Until next time,
