Rocky Mountain High: Salt Lake City Has a Housing Boom
Salt Lake City is having a housing boom -- find out why.
Nov. 20, 2007 Special to ABCNEWS.com — -- Home prices nationwide posted their biggest drop in 16 years last month, according to the National Association of Realtors.
But someone forgot to tell the folks in Salt Lake City. There, the median home sale price jumped 21% in the second quarter this year, versus the same period last year.
It's not that Salt Lake City is entirely immune to the national housing downturn. In fact, new housing permits are down this year, and there is a glut of Macmansions, says John Taylor, investment specialist at Commerce CRG, a unit of developer Cushman & Wakefield. But with more people moving into the area, thanks in part to a percolating job market, demand for affordable existing homes is still healthy, while commercial construction is up 40% from last year. Apartment vacancy rates are less than 2%, and longtime residents worry about a land grab from commercial property investors flocking in from California and Las Vegas.
"We are in the middle of a construction boom," says Taylor.
Salt Lake City isn't the only anomaly. Prices are rising in other parts of the Rocky Mountain states, parts of Texas, the Pacific Northwest and the Southeast. Other markets defying the national meltdown include Beaumont-Port Arthur, Texas, Salem, Ore., and Farmington, N.M.
What gives? For starters, these places missed the get-rich real-estate frenzy of recent years, says Lawrence Yun, economist for the National Association of Realtors. Prices aren't falling because they didn't rise that much to begin with. The median price of a single-family home in Sarasota, Fla., in June was $311,000. Compare that with $228,000 in Salem, which realized a 16.7% increase in property values in the second quarter of 2007, versus the same time frame in 2006.
Yun believes states like New Mexico and Utah are finally, albeit belatedly, enjoying the run-up in property prices that began in California and swept through Nevada in the last few years.
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