Salt Lake City has a tight housing market, and millennials are among those trying to cope with it.
A new report from Realtor.com shows Salt Lake City ranked as the third-toughest housing market for millennials among the largest 60 metropolitan areas in the U.S. with large populations of older millennials.
San Jose, California, was the toughest market, followed by Seattle. Salt Lake City was ahead of No. 4 Minneapolis and No. 5 Omaha, Nebraska.{mprestriction ids="1,3"}
Realtor.com compiled the rankings of the markets based on inventory availability and affordability. It said the report “provides evidence that fast-growing millennial hotspots like Salt Lake City and Omaha are already starting to have the kind of affordability challenges that people have been moving there (in part) to avoid.”
The study said the median list price for a home in Salt Lake City is $394,000, compared to $280,000 for the U.S. overall. On average, millennials earn $67,800 annually, compared to the average U.S. millennial salary of $59,800. Millennials compose 15.5 percent of the total population in Salt Lake City and account for 26 percent of total Realtor.com page views in the area.
The city “offers the perfect blend of city life and the great outdoor for millennial professionals,” it said.
“Located just an hour from Park City, residents can spend the morning downtown shopping one of the city’s many trendy shopping areas, and be on the slopes by mid-afternoon. However, millennials are struggling to find their place in the hot housing market. Many homes under $350,000 are getting scooped up instantly by older buyers who often have more money.”
Realtor.com said that nationwide, millennials, the largest generation in U.S. history, are colliding with the toughest home buying season in history.
“Millennials want to buy, but record-low inventory is making it extremely difficult,” said Danielle Hale, chief economist for Realtor.com. “Our analysis shows millennials are facing challenges in both established markets such as San Jose and Seattle, as well as more recently popular areas like Omaha and Salt Lake City. Despite the difficulties, first-timers are optimistic and more than willing to weather the challenges this spring has to offer.”
All of the top five toughest markets have attracted 25-to 34-year-olds with strong economies and high-paying jobs. Combined, millennials make up a higher share of their population, at 14.6 percent, compared to 13.4 percent for the U.S. Household income among that age group in the five locations is also significantly higher, at roughly $79,000, compared to the U.S. median of $59,800. Millennials are very interested in buying a home, accounting for 25 percent of views — higher than any other age group.
But low inventory levels and high prices are making it tough for those would-be buyers, according to the study. Nationally, inventory is 35 percent lower than in the spring of 2012. Compared to this time last year, active listings remain 8 percent lower, age of inventory is 7 percent lower, and list prices are 8 percent higher.
In the five toughest metros, supply is nearly three times lower than the rest of the country, at 5.7 listings versus 16.1 listings per 1,000 households. Also, listings in these areas are scarcer and selling faster for more money. In those five metros, active listings are 9 percent lower, age of inventory is 13 percent lower, and list prices are 14 percent higher from a year ago.
In San Jose, the median list price is $1,244,000, compared to $280,000 for the U.S. overall. Millennials there average $109,800 in annual earnings, compared to the median U.S. millennial salary of $59,800. Millennials make up 14.3 percent of the total population in San Jose and account for 24.1 percent of total Realtor.com page views in the area.
{/mprestriction}
