This is an archived article that was published on sltrib.com in 2007, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Correction: A story Friday incorrectly stated the dollar amount of Salt Lake County's average rent for 2006 according to the EquiMark Greater Salt Lake Multi-Family Report. Average rents rose to $674 - up by $33 a month from 2005. The 5.1 percent increase is still the largest in more than a decade.
The days of low rent increases, reduced deposits and freebies to attract renters along the Wasatch Front are only a happy memory.
A new report shows Salt Lake County's average rent for 2006 rose to $674 - up by $33 each month from the previous year. The increase marked the largest in more than a decade, according to the EquiMark Greater Salt Lake Multi-Family Report, which tracks activity at more than 65,000 apartment units.
At the same time, vacancy rates at Salt Lake County apartments declined to 5.1 percent at year's end, down from 6.5 percent at the end of 2005 and 10.9 percent in 2002.
"It's an apartment owners' market now," said EquiMark President Mark Millburn. "But then, renters have had a good deal for the past four or five years."
The increase pales in comparison with the rise in home prices, said L. Paul Smith, executive director of the Utah Apartment Association.
While Utah home prices have increased approximately 46 percent over the past five years, rental rates have increased only about 11 percent, Smith said. He doesn't expect the higher rental rates to spark any significant increase in the construction of multifamily dwellings that could turn the market in favor of renters.
"Developers are still pretty cautious and will probably stay that way for a while," he said. "Rents still aren't to the point where a lot of new construction can be justified."
Investor demand for apartment properties significantly exceeds supply as the construction of new apartment units has remained steady, according to the report. In Salt Lake County, 642 apartment units were constructed in 2006, and 1,049 units were under construction at the year's end.
Many renters might not be able to afford a home, thanks to Utah's home price appreciation. Three years ago, Utah's housing market was the weakest in the nation. Today, it is second only to Idaho.
Home prices in Utah rose 17.4 percent during the three-month period ending Sept. 30 compared with the previous year, according the Office of Federal Housing Enterprise Oversight. The jump boosted the state from 10th to second best nationwide. And, three Utah cities - St. George (9), Salt Lake City (10) and Provo-Orem (18) made the top 20 list of metropolitan areas.
Doug Macdonald, executive director for Utah Issues, an advocacy group for the poor, said the situation with rents could be far worse.
"If the supply of units is limited and rents are up what is only 2 percent above inflation, that doesn't bother me much," he said. "What bothers me is that home prices are up 19 percent over the past year; people are being priced out of their homes and I suspect next year rents could go even higher."
While rising home prices and higher mortgage rates are keeping more people in rentals, Utah's strong employment growth is attracting an influx of newcomers looking for apartments, according to the rental report.
That's reflected at the Mountain Shadows apartments in South Salt Lake, where vacancy rates are down and rental rates are up.
"We've been seeing a lot of demand from people moving in from out of state," said Jared Lee, Mountain Shadows manager. "We've raised our rates about 10 percent over the past year."
* Tribune reporter BOB MIMS contributed to this report.