Utah Housing Market - My Outlook

[Logan McKay Zylstra]

In the wake of rapid levels of appreciation seen all across the country, it has caused me to reflect on the state of the market quite a bit. Increasing interest rates adds another layer of complexity to that. My worries are that hyperinflation and wages will not be able to support these home prices will kick us into a very near recession.

I cannot speak on what is happening in the rest of the country, but being in the Utah market I do want to give my thoughts (and hear what others have to say). 

For those who are not familiar with Utah and Utah's housing market; historically Utah has been very affordable. However, in 2020 and 2021, we saw 19% and 28% (2nd in the nation) respectively. As it stands, cash flow is hard to come by in the Utah market because rents have not caught up to where home values are currently. While the continual exodus of Californians to the state only perpetuates increased home prices.

With that being said, in recent years Utah has been ranked as the #1 economy by various outlets. Led by the rapid growth of the tech industry (Silicon Slopes). 

With institutional investors scrambling to get a footing in this newly established market, I think prices will continue to creep up in the state. While rents will continue to explode to catch up to the current market conditions. With the possibility of the recent spike in interest rates kicking us into a downturn, I still believe that now is the time to take a calculated risk investing in real estate. Considering all, while I hope that this appreciation slows, I feel very comfortable in the Utah market and believe that it will fair well in a downturn and show continual upside in normal market conditions.

Disclaimer- I am not saying we are entering a downturn, just sharing my hesitations on the current real estate market.

For those interested in a Utah economic report, I have included a link below.

Gardner's Outlook