Solid Fundamentals

Markets rise and markets fall. Utah is no exception. But as talk of a national recession intensifies, Utah keeps adding new jobs and new people.

In fact, by year-end 2007 Utah gained nearly 45,000 new jobs, a 3.6 % increase compared to 2006 and the highest job growth rate of all 50 states, according to Mark Knold, chief economist of the Utah Department of Worforce Services. The phenomenal job growth put Salt Lake City at the No. 1 spot in the nation for the "Best Cities for Jobs in 2008", according to Forbes Magazine. And the job growth has led to a surge in net migration-the number of people moving into a place minues the number of people moving out. As of July 1, 2007, Utah saw a net migration of $44,252 people. In addition, there was a record 53,953 births, resulting in the highest single year population increase in the state's history. Combined, new job growth and net migration establish the foundation of a strong real estate market. While many places are experiencing job losses, population declines and flat house-price appreciaiton, Utah's fundamental economic picture remains solid.

"I don't believe that Utah is subject to the bubble concerns that exist in other markets.", said Juliette Tennert, chief economist to Gov. Jon Huntsman Jr. "Our demian home price right now is $206,000 compared to national home price of $220,000. We're well below the national mediam. Our housing demand is solidly rooted in populaiton increase as opposed to specualtion."

Since 1970, Utah has experienced four housing booms. The housing booms of 1971-1972, 1976-1978, 1994-1996, and 2004-2005 all had one common element-high rates of net migration, according to James Wood, director of the University of Utah's Bureau of Economic and Business Research. As Utah's Echo Boom generation comes of age-those born in the late 1970s and early 1980s-new ouseholds formation is certain to keep demand for housing strong. Utah's Echo Boom generation is larger in numbers that that of the state's Baby Boomers,a phenomenon unique only to the state of Utah, according to Tennert.

Although Utah's houseing market has slowed a little, the issue has little to do wuth overbuilding, according to the 2008 Economic Report to the Governor. "There are plenty of consumers and mane more to come who are willing buyers of homes," the report noted. "Instead, the porblem is in the mortgage markets....that is the primary reason for the Utah's slowing housing market. They have severely restricted mortgage lending."

By Brian Kohler
SLBR Chief Executive Office

Contact for more information
Marina Vialtsina
801-649-5883