Housing Demand
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 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 employment 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 is can attract people in from other parts of the U.S.," Knold said. Although Utah job market 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 income 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."