Mountain West Commercial Real Estate (MWCRE), a Salt Lake City-based, independently owned commercial real estate brokerage, has released its market report for the Salt Lake City multifamily market in 2023. The report highlights several key takeaways that provide insights into the current and future state of the market.
One significant observation from the report is the expectation of continued high vacancy rates over the next year, as construction deliveries outpace average absorption rates. However, 2024 absorption may surpass the six-year yearly average due to factors such as housing affordability concerns and rising interest rates, which could drive more individuals towards renting rather than buying homes, report authors concluded.
“Salt Lake City’s economic and cultural vitality continues to drive demand for multifamily housing, attracting professionals to its diverse job market, vibrant cultural scene, and abundant outdoor recreation opportunities,” said MWCRE agent J.R. Howa. “Despite near-term supply challenges, the market remains poised for robust long-term growth.”
Anticipation of interest rate cuts in 2024 could further influence the market dynamics by incentivizing more home sellers, potentially impacting multifamily vacancy rates and absorption levels, the report also said.
The report indicates a year-over-year decrease in rents overall, with a notable decline of 1.5 percent across various building sizes. However, the small-building segment, comprising properties with 20 or fewer units, experienced rent growth of 1.9 percent, indicating a trend toward cost-sensitive housing options.
The full report can be accessed at Mountain West Commercial Real Estate’s website, http://mtnwest.com.