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 Provo-Orem, UT • COMPREHENSIVE HOUSING MARKET ANALYSIS 2 Table 3. Source: UtahDepartmentofWorkforceServices,2016 Note: Excludeslocalschooldistricts. Table 2. Source: U.S.Bureau ofLaborStatistics averages through May2016and2017. Notes: Numbersmaynotaddto totals becauseofrounding.Basedon12-month Total nonfarmpayroll jobs Young LivingEssentialOils Nexeo Nestlé IM Flash d Adobe SystemsIncorporated Vivint, Inc. Intermountain Healthcare Utah Valley University Brigham Young University ō Service-providing sectors Goods-producing sectors Terra Government Other services Leisure &hospitality Education &healthservices Professional &businessservices Financial activities Information Transportation &utilities Wholesale &retail trade Manufacturing Mining, logging,&construction Economic Conditions Name ofEmployer 12-MonthAverage NonfarmPayroll Jobsinthe

HMA, Major Employersinthe bySector Wholesale &retail trade Professional &businessservices Manufacturing Manufacturing Wholesale &retail trade Information Professional &businessservices Education &healthservices Government Education &healthservices Provo-Orem May 2016 Nonfarm Payroll Sector 192,300 231,100 30,400 18,800 48,800 31,000 11,900 35,500 18,300 20,500 38,800 12 MonthsEnding 5,100 7,400 3,300 combined economic impact of about combined economicimpactof two universities have anestimated than 35,000studentsenrolled.The university inthestate, withmore UVU, apublic university, is the largest more than15,000employees (Table 2). largest employer intheHMA,with UVU. BYU, aprivate university, isthe from researchactiv­ data). Inaddition,theHMAbenefits Community Survey [ACS] 1-year percent nationally (2015American com­­ has abachelor’s orhigher, degree the population Nearly 40percentof T pared withapproximately 30 highly educatedworkforce. he Provo-Orem HMAhasa May 2017 201,500 241,900 HMA 31,300 19,800 51,300 32,400 12,700 37,400 18,300 22,100 40,400 5,300 7,900 3,500 ities atBYUand Absolute 10,800 Change 1,000 2,500 1,400 1,900 9,200 1,600 1,600 Provo-Orem 900 200 500 800 200 15,000–21,999 0 Employees Number of 1,000–3,999 1,000–1,999 1,000–1,999 1,000–1,999 1,000–2,999 1,000–1,999 3,000–4,999 3,000–3,999 4,000–5,999 Change Percent 3.0 3.9 5.3 5.1 4.5 6.8 6.7 6.1 5.4 4.8 0.0 7.8 4.1 4.7

support theincreasingpopulation, support growth inindustriesthat the resultof growth inthesesectorswas partly percent, respectively (Table 3).Job 1,900 and1,600jobs, or5.4and7.8 sectorsadded ging, andconstruction and retailtradethemining, log jobs, or5.1percent.Thewholesale sector ledjobgrowth, adding2,500 er. Theeducationandhealthservices jobs, or4.7percent,fromayear earli 10,800 241,900 jobs, anincreaseof payrolls2017, nonfarm averaged During the12monthsendingMay UVU EconomicImpactFact Sheet). Economic ImpactAnalysis and2016 $1.3 billionontheHMA(BYU2010 period. Average annual increases of nually inthenation duringthesame creased approximately 1.1percentan to 190,500.Bycomparison,jobs in 7,200 jobs, or4.3percent,annually, payrolls increased byanaverage of From 2003through2007,nonfarm not assevere, measuring800jobs. losses was percent, butthenumber of percentage decline, decreasing10.8 sectoralsohadalargeinformation in themanufacturing sector. The 2,600jobs, or13.1percent, decline of it closedin2002,contributingtothe 1,200workers when Steel milllaidoff sectors.and information TheGeneva joblossesinthemanufacturing cause of payrolls declinedin2002,mainly be paced thenationalaverage. Non preceded strongjobgrowth thatout previous decade, andeachdown­ payrolls) contractedtwiceduringthe The economy (asmeasuredbynon­ 3.2 percentayear earlier. months endingMay 2017,down from averaged 2.9percentduringthe12 Theunemployment rate construction. retail establishments, andresidential including schools, medicalcenters, ­farm turn turn farm farm ------Provo-Orem, UT • COMPREHENSIVE HOUSING MARKET ANALYSIS 3 Source: U.S.BureauofLaborStatistics Source: U.S. BureauofLabor Statistics Note: Basedon12-month averagesthroughMay 2017. Figure 2. Figure 1. Labor force and Education &healthservices21.2% resident employment Economic Conditions 155,000 175,000 195,000 215,000 235,000 255,000 275,000 295,000 Leisure &hospitality8.2%

by Sector Current NonfarmPayroll Jobsinthe ment Rateinthe Trends inLaborForce,ResidentEmployment,andUnemploy Professional &businessservices13.4%

Labor force 2000 Other services2.2%

2001

2002 Government 12.9% Government

2003

2004

Continued

2005 Provo-Orem HMA, Resident employment 2006

2007

2008 jobs, respectively. During2010,the los­ most jobsintheperiod,annually and manufacturing sectorslostthe The mining, logging, andconstruction or 2.3percent,annually, to177,500. 4,300jobs,decreased byanaverage of payrollsDuring thisperiod,nonfarm theGreatRecession. was theresultof the 2000s, from2008through2010, The secondeconomiccontractionof led growth duringthisperiod. rapid populationgrowth intheHMA, whichbenefitedfrom sector, bothof in theeducationandhealthservices sectorand1,300jobs construction 1,600 jobsinthemining, logging, and in 2007.Inthemanufacturing sector, declinefrom2,625jobs and asharp aged 1,025jobs, thefewest since2001 aver industry residential construction ­

Mining, logging,&construction9.1% 2009 ing an average of 3,000and1,200 ing anaverage of

2010 Financial activities3.3%

2011 Manufacturing 7.6% 2000Through2016 Information 5.2% Provo-Orem HMA

Transportation &utilities1.5% 2012 Wholesale &retail trade15.5%

2013

Unemployment rate 2014

2015

2016 ,

10.0

0.0 2.0 4.0 6.0 8.0

Unemployment rate - growth, withnoannual joblosses stableemployment sector isasourceof The educationandhealthservices 2000 through2016. and theunemployment ratefrom labor force, residentialemployment, period. Figure1shows trendsinthe nually forthenationduringsame 1.6 percent an the average increase of or 4.9percent,annually, nearly triple 9,600jobs,increased byanaverage of payrolls2011 through2015,nonfarm the prerecessionpeakin2012.From to recover in2011andsurpassed in 2008.Total payrolls nonfarm began acombined140peopleintheHMA off Morinda Inc. andQuicKutz, Inc. laid struction subsector in2016(Quarterly struction payrolls inthesectorwere inthecon covered housing. Nearly 95percentof theneedfornewgrowth, reflecting strongpopulation during periodsof sectorgrew ata faster rate struction Jobs inthemining, logging, andcon­ Provo. of Health­ way toexpand theIntermountain In addition,renovations areunder Lehiwith250employees. the cityof IASIS Healthcare, openedin2015 tain Point MedicalCenter, of part expanded in2013.Moun theirnursery Healthcare, Intermountain of a part the HMA.OremCommunity Hospital, pitals have beenbuiltorexpanded in a year earlier. Since2010,several hos 5.1percent,fromthesameperiod of sector added2,500jobs, anincrease payrollstotal nonfarm (Figure2).The and accountingfor21.2percentof ing the12monthsendingMay 2017 the HMA,averaging 51,300jobsdur sectoristhelargest in health services private university, theeducationand the HMA.Partly becauseBYUisa BYUandhospitalexpansions in of bythepresence since 2000,supported care medicalcenterinthecity - - - - - Provo-Orem, UT • COMPREHENSIVE HOUSING MARKET ANALYSIS 4 Source: U.S.Bureau ofLabor Statistics Note: Current isbasedon12-month averages through May2017. Figure 3. – 10 Economic Conditions SectorGrowthinthe 0 10 20

Continued Provo-Orem HMA 30 jobs lost and surpassed theprevious jobs lostandsurpassed the sectorrecovered thenumber of percent, annually. 2015, Bytheendof 1,800jobs,by anaverage or13.7 of and increasedfrom2011through2015 thesectorrebounded the downturn, activity slowed.as construction After 3,000jobs, or19percent,annually,of sector payrolls decreasedbyanaverage from 2008through2010,however, ally. Duringtheeconomicdownturn 2,000 jobs, or nearly 15 percent, annu­ payrolls increasedbyanaverage of mining, logging, andconstruction fastest during2004to2007,when Since 2000,populationgrowth was Employment andWages). Census of planned community, whichbeganin Steel millsiteintotheGeneva master- Geneva theformer redevelopment of tion projectsunderway includethe than 90percent(Figure3).Construc the HMAsince2000,increasingmore jobgrowth in had thefastestrateof from ayear earlier. Thesectorhas 1,600jobs, or7.8percent, increase of tor payrolls averaged 22,100jobs, an the 12monthsendingMay 2017,sec 19,000jobsin2007.During peak of 40 , 50 PercentageChange,2000toCurrent 60 70 - - 80 of SiliconSlopesfortheareaby of industry, contributingtothe­ The HMAhasagrowing ­ in 2019. lion project,isexpected tobecomplete Provo, a$429 milcenter in the city of Healthcaremedical Intermountain atthe complete in2025.Construction sectors,and businessservices when and hospitalitytheprofessional several sectors, includingtheleisure is projectedtocreate20,000jobsacross Vineyard 1,700-acre siteinthetown of tion phase, thecommunity onthe ­ to thejobscreatedduringconstruc residential developments. In­ 2013, withretail,commercial,and ing to the 2008 peak of 23,400 in 2011. 23,400in2011. ing tothe2008peakof jobs, or5.6percent, annually, recover­ 1,300 the sectoraddedanaverage of payrolls. From 2010through2016, 2010, ayear earlierthantotalnonfarm during 2009butbeganrecovering in sector lost2,200jobs, or9.4percent, The professionalandbusinessservices sectors. andinformation ness services included intheprofessionalandbusi­­ Wasatch Mountains. Manyjobsare 90 Total nonfarmpayroll jobs Service-providing sectors Goods-producing sectors Education &healthservices Professional &businessservices Financial activities Transportation &utilities Manufacturing Government Other services Leisure &hospitality Wholesale &retail trade Mining, logging,&construction Information high-tech nickname nickname addition ­ Provo-Orem, UT • COMPREHENSIVE HOUSING MARKET ANALYSIS 5 Population andHouseholds Economic Conditions

Continued national average of 12.4(Centersfor national average of a number much higher than the per1,000people,the nation,20.8births ratein has thesecondhighestbirth 75 percentsince2010.UtahCounty decade andincreasingtomore than population growth inthe previous change, comprising65percentof population largest componentof minusbirths residentdeaths) isthe 2010. Netnaturalchange (resident or 2.3percent,annually sinceApril 13,000, has increasedbyanaverage of June 1,2017.Thepopulation as of T increase by an average of 1,000jobs,increase byanaverage of level asin2000,andcontinued to reached 8,600jobsin2012,thesame sectorpayrolls Information gradual. employmenttechnology-related was andhigh- lossesininformation of burst intheearly 2000s, therecovery nationally. Afterthedot-combubble compared withlessthan2percent payrolls nonfarm intheHMA of sector accountsformorethan5percent than inthenation.Theinformation jobsintheHMA shareof a greater sectorconstitutes The information growth. year in2014and2015,addingtothe Insidesales.com hired300peoplea increase of 800jobs, or6.7percent, increase of payrolls averaged 12,700jobs, an 12 monthsendingMay 2017,sector added 250jobsin2014.Duringthe Lehi, inthecityof headquartered ect management software company through 2016.Workfront, Inc., aproj or 9.8percent,annually from2013 estimated population of 620,100 620,100 estimated populationof he Provo-Orem HMAhasan - software companybasedinthecity population. Podium Inc., a Corp economy thegrowing andsupport subsector areexpected todrive the sector,services andtheconstruction tech jobs, theeducationandhealth increase acrossmostsectors. High- or 3.8percent,annually. Jobs will 9,100jobs,to increasebyanaverage of payrollsHMA. Nonfarm areexpected growth isexpected tocontinue inthe During thenext 3years, strongjob two decades. will add1,000jobsduringthenext Lehiand their facilityinthecityof isexpanding Systems Incorporated compared withayear earlier. Adobe 2000 to 2010, with net in-migration 2000 to2010,with netin-migration The population grew rapidly from nationally. in 2015was 3.6compared with2.7 average householdsizeintheHMA ACS 1-year data).Inaddition,the with 37.8years forthenation(2015 the HMAwas 24.5years compared household size. Themedianage in population withalarge average area forwork contributetoayoung and young familiesattractedtothe lation, therelatively rates highbirth In additiontothelarge studentpopu­ Disease ControlandPrevention, 2015). the next decade. up to700additionalworkers within facility willopenin2019andemploy at theProvo the Municipal Airport; Aviation Inc. willbegininlate-2017 new maintenancefacilityforDuncan the next 5years. ona Construction Lehi,isadding425jobsduring of

Provo-Orem, UT • COMPREHENSIVE HOUSING MARKET ANALYSIS 6 estimates byanalyst Sources: 2000and2010—2000Census2010Census;current forecast— Notes: ThecurrentdateisJune1,2017.forecast 1,2020. Population andHouseholds Figure 4. analyst Sources: 2000and 2010—2000Censusand2010Census; current—estimatesby Note: Thecurrent dateisJune1,2017. Figure 5.

100,000 120,000 Average annual change 20,000 40,000 60,000 80,000 10,000 12,000 2,000 4,000 6,000 8,000 0 0

HMA, Components ofPopulationChangeinthe HMA, Number ofHouseholdsbyTenureinthe 2000 to2010 2000toForecast

2000 toCurrent 2000 Net naturalchange

Continued Renter again from2003to2007,thepopula 2003. Whentheeconomy expanded 2002 tovirtuallynothingfrom populationof growth from2000to declined from32percent in-migration job losses net in2002. Theshareof from 2002to2003becauseof percent, 9,100people, or2.2 increase of an to July 1),butgrowth slowed mates asof census countsandpopulationesti­ 3.3 percent(CensusBureaudecennial 12,850,or increasing byanaverage of to 2002was strong, withthepopulation years. Population growth from2000 surgedin-migration againinrecent a slowdown from2011to2014,net trendsinjobgrowth. Despite reflecting from 2007to2011,wheneconomic growth. Population growth slowed population ing fornearly 40percentof annually, account withnetmigration tion increasedby16,100,or3.7percent 2010 tocurrent 2010 Owner Net migration Provo-Orem Current toforecast Provo-Orem Current - -

was inresponsetoachange inage at thetwo universities; thisdecline decliningenrollment becauseof in part slowed toaverage 330peopleannually, populationgrowth. Netin-migration of change comprisedmorethan95percent 1.9 percent,annually. Netnatural slowed to10,200people, further or From 2011to2014,populationgrowth averaged 10,800peopleannually. strong, becausenetnaturalincrease population growth remained generally slowdown,but despitethein-migration about 30per­­ a year. declinedto Netin-migration the populationincreasing3.1percent conditions were mostly weak, with are expected toincrease 2.8and2.9 householdsinthe HMA and number of During thenext 3years, the population date.from 2000tothecurrent households bytenure intheHMA data). Figure5shows thenumber of 63.0percent(2015ACS 1-year of was higherthan thenationalaverage trends, butat67.4percentin2015,it declined since2010,following national homeownership rateintheHMAhas by 4,125,or3.4percent,annually. The householdsincreased the number of By comparison,from2000to2010, 2.4 percent,annually sinceApril2010. 3,675,or in theHMA,anincreaseof An estimated170,000householdslive to theforecastdate. ­lation change intheHMAfrom2000 popu­ Figure 4shows componentsof populationgrowth. percent of 40 to ally, increased andnetin-migration 16,600people, or2.8percent,annu ­­of the populationincreasedbyanaverage choosing todelay college. Since2014, young adultsinthearea Mormon surge in that causedatemporary trips Latter-Day Saintsformission Christ of Jesus requirements bytheChurchof cent of population growth, populationgrowth, cent of

- -

Provo-Orem, UT • COMPREHENSIVE HOUSING MARKET ANALYSIS 7 Population andHouseholds Housing Market TrendsHousing Figure 6. estimates byanalyst Sources: 2000and2010—2000Census2010Census;currentforecast— Notes: ThecurrentdateisJune1,2017.forecast2020.

Average annual change 10,000 12,000 14,000 16,000 18,000 2,000 4,000 6,000 8,000 0

Population andHouseholdGrowth inthe HMA, 2000 to2010 2000toForecast

Population Continued months ending April 2017 but remain endingApril 2017butremain months 11,900 homessoldduringthe 12 sales—increased3percentto short resale, realestateowned (REO), and Existing homesales—including regular the analyst). (CoreLogic, Inc., withadjustmentsby average salespriceincreased7percent April 2017 from ayear earlier, andthe 6 percentduringthe12monthsending increased sales andnew construction, home sales, includingexisting home adjustments bytheanalyst). Total Realtors Central Associationof unchanged fromayear earlier(Utah a2.3-monthsupply,2017 represented homes forsaleintheHMAMay Theinventory thisreport). of of April 2010(Table DP-1attheend percent, down from2.3percentin sales vacancy rateisestimatedat1.2 Provo-Orem HMAisbalanced.The The saleshousingmarketinthe Sales Market 2010 tocurrent Households Provo-Orem Current toforecast ® , with , with 2000 totheforecastdate. and householdgrowth trendsfrom Lehi.Figure6shows population of ment centersinandaroundthecity expands aroundemergingemploy Provo andOrem,asthepopulation thecitiesof of expected tobenorth population andhouseholdgrowth is the continued jobgrowth. Mostof expected toincreaseinresponse is growth, althoughnetin-migration thepopulation largest shareof increase isexpected toconstitutethe 18,000 and5,100.Netnatural percent ayear, respectively, orby cent, to12,100homessold in2016. 630sales annually,average of or6per­ existing homesalesincreasedbyan homes. Afterbottoming outin2010, 18 percent,annually, 8,300 toalow of 2,400,or declined byanaverage of through 2010,existing homesales the subsequentrecession.From 2007 2007 andcontinued todeclineduring conditions, salesbegan todecreasein sold in2006. Despite strong economic 20 percent,annually, to17,900homes 2,500,or increased byanaverage of in theHMA,existing homesales strongjobgrowth during aperiodof households. From 2003through2006, increased preferencetorentbysome aged would-be buyers, alongwithan down payment requirementsdiscour because tightlendingstandardsand they were duringthehousingboom, in 2006.Homesalesarelower than nearly 17,900homessold decade of below thepeakduringprevious - - Provo-Orem, UT • COMPREHENSIVE HOUSING MARKET ANALYSIS 8 Sales Market Market TrendsHousing Continued slightly higherthanthe1-percentrate 2017, down fromthepeakin2011but during the12monthsendingApril existing home sales about 2percentof home prices. REOsalesaccountedfor contributed tothedeclinesinexisting existing homesalesin2011, cent of sales, whichpeakedatabout26per annually to$223,000in2011.REO 11percent decreased anaverage of After 2007,theaverage salesprice thehousingbubblein2007. height of $346,300atthe less thantheaverage of The average priceremains2percent past year $303,400. toanaverage of home increased8percentduringthe anexisting The average salespriceof because slower population growth ally from 2005through2007,inpart, 4,900soldannuthan theaverage of new homesremain36percentless of 12 monthsendingApril2017. Sales year to 3,125homessoldduringthe increased 20percentduringthe past new homes themid-2000s. Salesof of but remainlessthanthepeaklevels sales increasedduringthepastyear Like existing homesales, new home percent inApril2017. is below 2.3 thenationalaverage of level inApril2007.TheHMArate 2000 rateandtheprehousing-crisis rateisthesameasApril current levelsto normal intheHMA,as (CoreLogic, Inc.). Theratereturned 2010 7.4percentinFebruary peak of a year earlierbutmuch lessthanthe status, down slightly from1.2percent quent orhadtransitionedintoREO homeloanswas seriously delin of April2017,0.9percent HMA. Asof thehousingmarketin recovery of marked the loans andREOproperties delinquent orinforeclosure)home seriously delinquent(90ormoredays A significantdecreaseintheshareof in 2007. - - - as measured by the number of homes as measuredbythenumber of Single-family homebuilding ­ annually from2010through2016. 7percent increased anaverage of the average pricefornew homesales 2009. Afterbottomingoutin2009, 20 percentannually to$220,800in peak, theaverage pricedecreased $342,900in2007.Following the of thepeak home iswithin1percentof earlier. anew Theaverage priceof April 2017,up3percentfromayear $339,900 duringthe12monthsending anew homeintheHMAaveraged of additional for-salehousing. Theprice toward rentingreduceddemandfor since 2010andchangingpreferences of mountains andlakes, developable of constraints geographical Because of date.the current family from2000to homespermitted single- Figure 7shows thenumber of employment. increase inconstruction building activity contributedtoan homes were Thehome­ permitted. annually, through2015,when3,100 280units,an average or16percent, of torecover, started struction increasing tion employment. Single-family con­ in 2008,leadingtodeclinescon­ plummeted to1,125homespermitted economic growth. Homeconstruction peak duringstrongpopulationand 46 percenttothe2005-through-2007 2000 through 2004 and then increased averagedpermitted 3,325ayear from single-family homes The number of 4,850 homeswas annually. permitted through 2007whenanaverage of Homebuilding peakedfrom2005 with adjustmentsbytheanalyst). data, period ayear earlier(preliminary up33percentfromthesame permitted, ending May 2017,3,375homeswere mid-2000 levels. Duringthe12months and nearlydownturn recovered to increasedaftertheeco­ permitted, activity, nomic nomic ­ struc

Provo-Orem, UT • COMPREHENSIVE HOUSING MARKET ANALYSIS 9 Sales Market Market TrendsHousing Continued primarily occurs north of Provo, near primarily of occursnorth family homebuildingintheHMA scarce andcostly; therefore, single- Provo is andOrem land inthecitiesof estimates; 2016 Sources: U.S.CensusBureau,BuildingPermitsSurvey, 2000 Notes: Includestownhomes.CurrentincludesdatathroughMay2017. Table 4. is expected tobebuiltout inabout rently completed.Thedevelopment with ap­ beganonabout60homes,struction A HanleyWood Company).Con 2016(Metrostudy, of quarter fourth Vineyard duringthe in thetown of Edge Cascadebeganconstruction mill property. The110-lotWaters theGeneva Steel redevelopment of the Provo of andLehi,ispart cities of Vineyard, between the in thetown of Geneva master-planned community Provo withSaltLakeCity.of The connectingthecity transit corridor Lehiandalongthe around thecityof the growing employment centers Source: Estimatesbyanalyst The forecastperiodisJune1,2017, toJune1,2020. 3,200 othervacantunitsintheHMA willlikelysatisfysomeoftheforecastdemand. Notes: The1,900homescurrently underconstructionandaportionoftheestimated Figure 7. 1,000 2,000 3,000 4,000 5,000 6,000 0 prox­

600,000 500,000 400,000 300,000 200,000 140,000 Estimated DemandforNewMarket-RateSalesHousing in the Provo-Orem HMA 2000 Single-Family HomesPermittedinthe 2000 toCurrent From imately one-half cur imately one-half –

Price Range($) 2001 2017 preliminarydataandanalystestimates

2002

2003 and higher

599,999 499,999 399,999 299,999 199,999 2004 To 2005 -

- 2006 During theForecast Period

2007

2008 south of the city of Provo, anarea thecityof south of extends Less residentialdevelopment at$265,500. home starts bedroom a year, andtheprice forathree- per­ price range, comprisingnearly 60 inthe$200,000-to-$399,999 be greatest opportunities. Demandisexpected to suburbsnearemployment northern Demand willbestrongest inthe thedemand. ket willsatisfysomeof vacant unitsthatmay reenterthemar theestimated3,200other some of and currently underconstruction homes (Table 1).The1,900homes demand isexpected for12,000new During the3-year forecastperiod, from thejobcenterstonorth. affordable land,becauseitisfarther primarilypreferred fortherelatively

Demand 2009 Units of cent of demand(Table 4). cent of 1,200 2,400 3,475 3,475 1,325

120 2010

2011 – Provo-Orem HMA, 2015 finaldataandanalyst 2012

2013

2014 Percent of Total 10.0 20.0 29.0 29.0 11.0

1.0 2015

2016

2017

- Provo-Orem, UT • COMPREHENSIVE HOUSING MARKET ANALYSIS 10 Sources: 2000and2010—2000Census 2010Census;current—estimates byanalyst Note: Thecurrent dateisJune1,2017. Figure 8. Housing Market TrendsHousing 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 0

Current Rental Vacancy Ratesinthe 2000 3.2

Continued Rental Market of 2017,upfrom3.7percentayear of percent duringthesecondquarter 5.5 balanced, withavacancy rate of marketconditionsarealso Apartment (2015ACSor apartments 1-year data). family units, suchascondominiums the remaininghouseholdsrentmulti­ family homesormobilehomes, and households intheHMAlive insingle-­ renter Approximately 41percentof the 4.2percentinApril2010(Figure8). 4.0percent,similarto vacancy rateof balanced, withanestimatedoverall the Provo-Orem HMAarecurrently Rental housingmarketconditionsin is aprivate, selective university able at BYUisgenerally stable, becauseit universities, respectively. Enrollment the Provo andOrem,thelocationof most studentsliving inthecitiesof renterhouseholds, with 20 percentof at BYUandUVUaccountfornearly The combinedstudentpopulations past year. vacancyin theapartment rateinthe housing, contributingtoanincrease years exceeded thedemandforrental inthefollowing 2014 andconstruction in construction spike inapartment increased 11percentto$1,055.The period, theaverage rent apartment earlier (MPFResearch). Duringthat 2010 4.2 Provo-Orem HMA, Current 2000to 4.0 expected to be complete by the start expected tobecompletebythestart 250 bedsisunderway atBYUandis private market. with A new dormitory demand forrentalhousinginthe stu­ for does notprovide on-campushousing expects moderateincreases. UVU dur­ BYU isexpected toremainsteady an­­ 3percent increased anaverage of conditions. EnrollmentatUVUhas sity, witheconomic tendstofluctuate enrollment atUVU, apublicuniver­ to manage itsenrollmentlevel, but before decreasing to an average of before decreasing toanaverage of and thenspiked to2,675unitsin2014, when themarket begantorecover, tion increasedto780unitsin 2013, recent periods. Multifamily construc was growing ata slower pace thanother lend todevelopers, andthepopulation because manybankswere reluctant to economy recovered, butstillsubdued, a slightincreasefrom2008asthe annually from2009through2012, averagedunits permitted 390units multifamily in 2008.Thenumber of significantly to260unitspermitted Multifamily decreased permitting mit­ 2000 through2007,­ the previous 12-monthperiod.From during from the1,000unitspermitted units were up14percent permitted, ending May 2017,approximately 1,150 spike in2014.Duringthe12months typical historicallevels following the tomore through 2013andreturned levelsthe low construction from2008 recovered unitspermitted, from of activity, asmeasuredbythenumber ing intheHMA.Multifamily building the increaseddemandforrentalhous In 2014,buildersbegantorespond the2017fallsemester. of nually since2010.Enrollmentat ting averaged 1,550unitsannually. ing thenext 3years, butUVU dents, whichleadstoincreased multifamily per­ - - Provo-Orem, UT • COMPREHENSIVE HOUSING MARKET ANALYSIS 11 Table 5. Source: Estimatesbyanalyst currently under construction willlikelysatisfysomeoftheestimateddemand.Theforecast period isJune1,2017,to 1,2020. Notes: Numbersmaynotaddtototalsbecauseofrounding.Monthly rentdoesnotincludeutilitiesorconcessions.The1,500units estimates; 2016 Sources: U.S.CensusBureau,BuildingPermitsSurvey, 2000 Notes: Excludestownhomes.CurrentincludesdatathroughMay2017. Figure 9. 1,000 1,500 2,000 2,500 3,000 500 Monthly Gross Rental Market Market TrendsHousing Total 620 ormore 0 Rent ($) Zero Bedrooms

Estimated DemandforNewMarket-RateRentalHousingintheProvo-Orem HMA Forecast Period 2000 Multifamily UnitsPermittedinthe Current

– 2001 2017 preliminarydataandanalystestimates

2002 Continued Demand

Units of 2003 40 40 2004

2005

Monthly Gross 2006 Total 1,100 ormore 900 to1,099

Rent ($) 2007 One Bedroom

2008 orapproximatelyunits permitted, 30 themultifamily creased to3percentof date,the current condominiumsde 230 unitsannually. From 2008until from 2000through2007,averaging themultifamily unitspermitted of con­ in recentyears. Condominiums in HMA,buttheirsharedecreased tion multifamily­ construc of for aportion Condominiums traditionally accounted date.HMA from2000tothecurrent multifamily inthe unitspermitted 2016. Figure9shows thenumber of 1,365 unitsannually in2015and

2009 stituted approximately 20percent

2010 Provo-Orem HMA, Demand Units of

1,250 1,125 2011 – 130 2015 finaldataandanalyst 2012

2013 Total 1,200 ormore 1,000 to1,199 Monthly Gross 2014 Rent ($)

Two Bedrooms 2015 2000 to 2000to

2016

2017

­

Demand Units of 1,475 1,325 150 rental unitsintheHMA(Table 1). expected for4,175new market-rate During thenext 3years, demandis $1,645, respectively. at$900,$1,015,$1,225,and starting one-, two-, andthree-bedroomunits in late2017,withrentsforstudio, Parkway LoftsinOremwillbecom­ Vineyard, andLehi.The331-unit Orem, Provo, nearthecitiesof of north land forrentalhousingintheHMAis thedevelopable ment remain.Mostof although someareasforinfilldevel ­ Provo islargely builtout, The cityof to theincreaseddemandforapartments. units annually, asbuildersresponded level and number of bedrooms. level andnumber of rental housingintheHMAbyrent forecast demandfornew market-rate in thepipeline. Table 5shows the unitsalready tion of andabsorption forecast periodtoallow forthecomple­ the3-year through thesecondyear of be timedtoenterthemarketmidway forecast demand.New unitsshould the struction of willmeet aportion The 1,500unitscurrently undercon­ Three orMore Bedrooms Total 1,475 ormore 1,275 to1,474 Monthly Gross Rent ($) During the

Demand Units of 1,425 1,350 70 plete plete op­

Provo-Orem, UT • COMPREHENSIVE HOUSING MARKET ANALYSIS 12 Data Profile Sources: U.S.CensusBureau;DepartmentofHousingandUrbanDevelopment;estimatesbyanalyst 2017. and the12monthsthroughMay2017.MedianFamilyIncomesarefor1999,2009,2015.ThecurrentdateisJune1, Notes: Numbersmaynotaddtototalsbecauseofrounding.Employmentdatarepresentannualaveragesfor2000,2010, Table DP-1. Median FamilyIncome Rental vacancyrate Owner vacancyrate Total housingunits Percent renter Renter households Percent owner Owner households Total households Total population Nonfarm payroll jobs Unemployment rate Total resident employment Provo-Orem HMA $50,009 107,125 102,393 376,774 155,400 179,433 DataProfile, 2000toCurrent 33,646 68,747 2000 32.9% 67.1% 3.2% 1.7% 2.9% $62,900 151,852 143,695 526,810 177,500 216,919 45,199 98,496 2010 31.5% 68.5% 4.2% 2.3% 7.5% $67,600 176,800 115,300 170,000 620,100 241,900 281,700 Current 54,700 32.2% 67.8% 4.0% 1.2% 2.9% 2000 to2010 Average AnnualChange(%) 2.3 3.6 3.0 3.7 3.4 3.4 1.3 1.9 2010 toCurrent 1.2 2.1 2.7 2.2 2.4 2.3 4.9 4.2 Provo-Orem, UT • COMPREHENSIVE HOUSING MARKET ANALYSIS 13 not reflected intheresidential buildingpermits.not reflected As are some unitsclassifiedascommercialstructures For buildingpermit. example, a differenttypeof orareissued or createdwithoutabuildingpermit occurs inanHMA.Someunitsareconstructed sarily allresidentialbuildingactivity that reflect Building Permits: donotneces­ Buildingpermits vacant bytheCensusBureau. specifiedas“other” workers; andthecategory recreational, oroccasionaluse;usedbymigrant or soldbutnotoccupied;heldforseasonal, thereforeincludesunitsrented for rent.Theterm all vacant unitsthatarenotavailable forsaleor Development (HUD),othervacant unitsinclude by theU.S. HousingandUrban of Department Other Vacant Units:Inthisanalysis conducted development pipeline. orunitsinthe units currently underconstruction excess vacancies. Theestimatesdonotaccountfor theanalysis, growth, losses, and dateof the as-of the3-year forecastperiodgiven conditionson of needed toachieve abalancedmarketattheend thetotalhousingproduction the estimatesof buildingactivity.are notaforecastof Theyare Demand: Thedemandestimatesintheanalysis 28,2013. February Budget (OMB)intheOMBBulletindated Management and established bytheOfficeof isbasedonthedelineations noted inthisreport The metropolitanstatisticalareadefinition Forecast period:6/1/2017–6/1/2020—Estimates date:6/1/2017—EstimatesbytheanalystCurrent 2010: 4/1/2010—U.S. Decennial Census 2000: 4/1/2000—U.S. Decennial Census Data DefinitionsandSources by theanalyst huduser.gov/portal/ushmc/chma_archive.html For onothermarketareas, additionalreports please goto Contact Information CMARtables_Provo-OremUT_17.pdf for thisHMA,goto For tothehousingmarket additionaldatapertaining family andmultifamily buildingpermits. single- these estimatesareincludedinthediscussionsof activity. thisadditionalconstruction Someof estimate of a result,theanalyst, throughdiligent fieldwork, makesan on localeconomicandhousingmarketconditions. government officialswhoprovided dataandinformation sourcesandstatelocal appreciation tothoseindustry modified bysubsequentdevelopments. HUDexpresses its national sources. Assuch,findingsorconclusionsmay be datefromlocaland availableinformation ontheas-of aspossiblebased on findings areasthoroughandcurrent Market Analysis Division withinHUD. Theanalysis and guidelines andmethodsdeveloped bytheEconomicand The factualframework forthisanalysis follows the may beunderconsiderationbytheDepartment. insuranceproposalsthat anymortgage of acceptability regardingthe tomakedeterminations does notpurport housing marketconditionsandtrends. Theanalysis builders, mortgagees, withlocal andothersconcerned mation, findings, andconclusionsmay alsobeusefulto HUDinitsoperations. Thefactualinfor­ guidance of This analysis fortheassistanceand hasbeen prepared [email protected] 303–672–5060 Denver HUDRegional Office Katharine Jones, Economist huduser.gov/publications/pdf/ . .