Provo-Orem, Utah
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COMPREHENSIVE HOUSING MARKET ANALYSIS Provo-Orem, Utah U.S. Department of Housing and Urban Development Office of Policy Development and Research As of June 1, 2017 Summary Economy 1,900 homes under construction and The Provo-Orem HMA added jobs at a portion of the estimated 3,200 other approximately triple the national rate vacant units that may reenter the market since the most recent national reces- will satisfy some of the forecast demand. Housing Market Area sion. During the 12 months ending May 2017, nonfarm payrolls averaged Rental Market 241,900, an increase of 10,800, or Rental housing market conditions in 4.7 percent, from a year earlier. The the HMA are currently balanced, with high-technology (hereafter, high-tech) Salt Lake Summit an overall estimated vacancy rate of Elko Wasatch Tooele industry benefits from the highly 4.0 percent, compared with 4.2 percent Nevada Utah Utah Duchesne educated workforce and two univer- in April 2010. Multifamily construction, Juab sities in the HMA, contributing to Carbon primarily of apartments, has nearly job growth. In addition, construction returned to the levels during the 2000s. White Pine White Millard Sanpete Emery payrolls and education and health During the forecast period, demand in The Provo-Orem Housing Market Area services are increasing to support the the HMA is expected for 4,175 new (HMA) is coterminous with the Provo- growing population. During the 3-year market-rate units. The approximately Orem, UT Metropolitan Statistical Area, forecast period, nonfarm payrolls are 1,500 units currently under construc- comprising Juab and Utah Counties in expected to increase by an average of tion will meet some of the forecast north central Utah, along the southern 9,100 jobs, or 3.8 percent, annually. demand (Table 1). edge of the Wasatch Mountains. Approx- Table 1. imately 98 percent of the population of Sales Market Housing Demand in the the HMA lives in Utah County, primarily Provo-Orem HMA During Sales housing market conditions in the the Forecast Period along a corridor between Salt Lake City HMA are balanced, with an estimated Provo-Orem HMA and the city of Provo. The city of Provo 1.2-percent vacancy rate, down from is home to Brigham Young University Sales Rental 2.3 percent in 2010. Total home sales Units Units (BYU), and Utah Valley University (UVU) and average home prices, however, Total demand 12,000 4,175 is in the city of Orem. remain about 37 and 10 percent, Under construction 1,900 1,500 respectively, below their previous peak Notes: Total demand represents estimated production necessary to achieve a balanced during the mid-2000s. During the market at the end of the forecast period. next 3 years, demand is estimated for Units under construction as of June 1, 2017. A portion of the estimated 3,200 other 12,000 new homes, primarily near vacant units in the HMA will likely satisfy the emerging employment center in some of the forecast demand. The forecast Market Details period is June 1, 2017, to June 1, 2020. Economic Conditions ............... 2 the northern suburbs (Table 1). The Source: Estimates by analyst Population and Households ..... 5 Housing Market Trends ............ 7 Data Profile ............................. 12 Economic Conditions 2 he Provo-Orem HMA has a $1.3 billion on the HMA (BYU 2010 Thighly educated workforce. Economic Impact Analysis and 2016 Nearly 40 percent of the population UVU Economic Impact Fact Sheet). has a bachelor’s degree or higher, During the 12 months ending May compared with approximately 30 2017, nonfarm payrolls averaged percent nationally (2015 American 241,900 jobs, an increase of 10,800 Community Survey [ACS] 1-year jobs, or 4.7 percent, from a year earli- data). In addition, the HMA benefits er. The education and health services from research activ ities at BYU and sector led job growth, adding 2,500 YSIS UVU. BYU, a private university, is the jobs, or 5.1 percent. The wholesale largest employer in the HMA, with and retail trade and the mining, log- ANAL more than 15,000 employees (Table 2). ging, and construction sectors added UVU, a public university, is the largest 1,900 and 1,600 jobs, or 5.4 and 7.8 university in the state, with more percent, respectively (Table 3). Job than 35,000 students enrolled. The growth in these sectors was partly two universities have an estimated the result of growth in industries that combined economic impact of about support the increasing population, Table 2. Major Employers in the Provo-Orem HMA including schools, medical centers, Number of retail establishments, and residential Name of Employer Nonfarm Payroll Sector Employees construction. The unemployment rate Brigham Young University Education & health services 15,000–21,999 averaged 2.9 percent during the 12 Utah Valley University Government 4,000–5,999 Intermountain Healthcare Education & health services 3,000–3,999 months ending May 2017, down from Vivint, Inc. Professional & business services 3,000–4,999 3.2 percent a year earlier. Adobe Systems Incorporated Information 1,000–1,999 dōTerra Wholesale & retail trade 1,000–2,999 The economy (as measured by nonfarm COMPREHENSIVE HOUSING MARKET IM Flash Manufacturing 1,000–1,999 payrolls) contracted twice during the Nestlé Manufacturing 1,000–1,999 Nexeo Professional & business services 1,000–1,999 previous decade, and each down turn Young Living Essential Oils Wholesale & retail trade 1,000–3,999 preceded strong job growth that out- Note: Excludes local school districts. paced the national average. Non farm Source: Utah Department of Workforce Services, 2016 payrolls declined in 2002, mainly be- cause of job losses in the manufacturing Table 3. 12-Month Average Nonfarm Payroll Jobs in the Provo-Orem o-Orem, UT • and information sectors. The Geneva HMA, by Sector ov Steel mill laid off 1,200 workers when 12 Months Ending Absolute Percent Pr May 2016 May 2017 Change Change it closed in 2002, contributing to the Total nonfarm payroll jobs 231,100 241,900 10,800 4.7 decline of 2,600 jobs, or 13.1 percent, Goods-producing sectors 38,800 40,400 1,600 4.1 in the manufacturing sector. The Mining, logging, & construction 20,500 22,100 1,600 7.8 information sector also had a large Manufacturing 18,300 18,300 0 0.0 Service-providing sectors 192,300 201,500 9,200 4.8 percentage decline, decreasing 10.8 Wholesale & retail trade 35,500 37,400 1,900 5.4 percent, but the number of losses was Transportation & utilities 3,300 3,500 200 6.1 not as severe, measuring 800 jobs. Information 11,900 12,700 800 6.7 Financial activities 7,400 7,900 500 6.8 From 2003 through 2007, nonfarm Professional & business services 31,000 32,400 1,400 4.5 payrolls increased by an average of Education & health services 48,800 51,300 2,500 5.1 7,200 jobs, or 4.3 percent, annually, Leisure & hospitality 18,800 19,800 1,000 5.3 Other services 5,100 5,300 200 3.9 to 190,500. By comparison, jobs in- Government 30,400 31,300 900 3.0 creased approximately 1.1 percent an- Notes: Numbers may not add to totals because of rounding. Based on 12-month nually in the nation during the same averages through May 2016 and May 2017. period. Average annual increases of Source: U.S. Bureau of Labor Statistics Economic Conditions Continued 3 1,600 jobs in the mining, logging, and Morinda Inc. and QuicKutz, Inc. laid construction sector and 1,300 jobs off a combined 140 people in the HMA in the education and health services in 2008. Total nonfarm payrolls began sector, both of which benefited from to recover in 2011 and surpassed rapid population growth in the HMA, the prerecession peak in 2012. From led growth during this period. 2011 through 2015, nonfarm payrolls increased by an average of 9,600 jobs, The second economic contraction of or 4.9 percent, annually, nearly triple the 2000s, from 2008 through 2010, the average increase of 1.6 percent an- was the result of the Great Recession. YSIS nually for the nation during the same During this period, nonfarm payrolls period. Figure 1 shows trends in the decreased by an average of 4,300 jobs, ANAL labor force, residential employment, or 2.3 percent, annually, to 177,500. and the unemployment rate from The mining, logging, and construction 2000 through 2016. and manufacturing sectors lost the most jobs in the period, annually The education and health services los ing an average of 3,000 and 1,200 sector is a source of stable employment jobs, respectively. During 2010, the growth, with no annual job losses residential construction industry aver- since 2000, supported by the presence aged 1,025 jobs, the fewest since 2001 of BYU and hospital expansions in and a sharp decline from 2,625 jobs the HMA. Partly because BYU is a in 2007. In the manufacturing sector, private university, the education and health services sector is the largest in Figure 1. Trends in Labor Force, Resident Employment, and Unemploy- the HMA, averaging 51,300 jobs dur- ment Rate in the Provo-Orem HMA, 2000 Through 2016 ing the 12 months ending May 2017 10.0 295,000 and accounting for 21.2 percent of COMPREHENSIVE HOUSING MARKET 275,000 8.0 total nonfarm payrolls (Figure 2). The 255,000 6.0 sector added 2,500 jobs, an increase 235,000 of 5.1 percent, from the same period 215,000 4.0 a year earlier. Since 2010, several hos- 195,000 Labor force and Labor force 2.0 Unemployment rate pitals have been built or expanded in resident employment resident 175,000 the HMA.