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Property Management Blog

Market Updates for December 2021

Happy Holidays from all of us at Wolfnest. Much like the year that preceded it, 2021 has been proved a challenging year. Through it all, we are honored and humbled that you have allowed us to assist you with your management needs. We hope you are able to relax and enjoy the balance of 2021 with your families, and we are both excited and optimistic about the year to come (more on that later). Please accept our heartfelt holiday wishes and we will be back with another update in 2022.


November Jobs Report - Each new jobs report feels like one step forward, one step back. After disappointing numbers in September, the financial markets cheered sizable gains in October, only to watch this month’s numbers disappoint. In November, the economy added a paltry 210,000 jobs against analyst expectations of 573,000 and the 546,000 jobs added during the previous month. If you are looking for something positive despite the discouraging statistics, the unemployment rate fell to 4.2% amid rising labor force participation.

Weekly Jobless Claims - Unlike the jobs report, weekly jobless claims came in well below analyst’s expectations at 184,000 claims vs. 220,000 expected. In fact, the figures marked the lowest total of weekly unemployment claims since September of 1969. Yes, you read that correctly. Continuing claims, or those receiving ongoing benefits, fell below the 2 million mark, which is another good sign of a labor market recovery. For what it’s worth, analysts do anticipate new claims figures to correct next week, but the trend of declining claims fits the pattern we’ve seen since hitting an all time high of 6.1 million in April of 2020. Locally, we saw the opposite I’m afraid, with new claims jumping 693 to a weekly total of 1,751 for the week ending December 4th. 

Omicron Variant - If you are looking for something to be thankful for, look no further than this week’s news regarding the Omicron variant. After spooking the financial markets on fears of ongoing supply chain problems, new travel restrictions, or continued turmoil in the labor market, it appears these initial concerns may have been overblown. According to Dr. Anthony Fauci, while the variant may be spreading rapidly, it’s potentially less dangerous than the Delta variant we’ve read so much about this fall. Despite the encouraging early reports, he urged caution stating “Thus far, it does not look like there’s a great degree of severity to it...But we have really got to be careful before we make any determinations that it is less severe or it really doesn’t cause any severe illness, comparable to delta.” I think I can speak for all 7.7 billion people on the planet in saying that we’d all prefer to avoid a rerun of 2020’s lockdown. 

What Will Happen with Home Values in 2022?

First, let’s point out the obvious, we humble renal operators here at Wolfnest lack the requisite crystal ball to accurately answer this question. Furthermore, we aren’t in a position to prognosticate because we aren’t academics who study the housing market and forecast based on reams of sophisticated data. What we are, however, are readers. We seek out and listen to those experts, filter the various sources of information, and distill the available details down into something we hope you find useful. With that said, we recommend you take the following results with a grain of salt (you’ll see why in a moment). 

Before we dive in, we’ve written previously about the factors at play in 2021’s stratospheric home price gains, but for those who may have missed out, 2021’s home price gains can be attributed to a perfect storm of lofty demand and low supply. Why? Following the crash in 2008, home builders stopped building enough inventory to meet demand, and the result (according to zillow) is a shortage of 1.35 million homes in the nation’s 35 largest markets or roughly 2.7 years worth of building permits at the current pace. Home builder confidence is sky high, and new construction has increased, but when we combine the existing shortage with ongoing supply chain issues, those in construction have a lot of homes to build before the market reaches equilibrium. 

Despite the economic factors in play above that would seem to indicate an ongoing supply side deficit, there is no shortage of diverse opinions on what will happen with home values in the new year. Depending on what you read, you can find viewpoints ranging from bullish to bearish, with most somewhere in between. On the optimistic side, you have analysis at Zillow and Goldman Sachs who predict home prices will climb 13.6% (Oct. 2021 - Oct. 2022) and 16% (Oct, 2021 - Dec. 2022) respectively. So, despite the massive gains we saw in 2021, these analysts again predict double digit gains in 2022 even though the annual average appreciation rate since 1891 (before inflation) is only 3.2%. A midrange perspective can be found by asking mortgage giants Freddie Mac and Fannie Mae who predict gains from 7% - 7.9%, which are above the historical average but represent a significant cooldown from the increases we experienced over the last 12 months. Redfin’s model see’s gains of 3% by year end, CoreLogic believes values will increase by 2.5% year over year (Oct. 2021 - Oct. 2022), but the biggest pessimist, the Mortgage Bankers Association, is anticipating climbing mortgage rates will cause home values to decline by 2.5% by Q4 of 2022. 

So, in conclusion, we have multiple reputable sources, all forecasting drastically different outlooks. They certainly can't all be correct and our most accurate prediction remains to be seen, but the majority of opinions seem to settle on average to above average home price increases for 2022. Also, be sure to click here, or check out the Utah Real Estate Market Section below for’s predictions for SLC.

Utah Real Estate Market

Despite the traditional seasonal decline in the number of homes sold and the average number of active listings, both are up significantly from January of this year. While not quite a year over year comparison, the number of homes sold each month is up 67.2%, and the average number of active listings is 68.9% higher than we saw in January. Additionally, the median sold price rebounded from last month’s setback and finished off November over $98,000 higher than what we saw in January of 2021. That represents a 22.4% increase in home values in just 10 months. Oh, and if that doesn’t make you happy enough, Salt Lake City is predicted to be the #1 housing market positioned for growth in 2022 with an estimated 8.5% increase in prices year over year.

Median Sold Price

January: $438,725

February: $455,000

March: $482,161

April: $499,900

May: $505,000

June: $530,000

July: $530,608

August: $526,000

September: $537,500
 October: $535,000

November: $537,000

Monthly Change: Up 0.37%

Sold Count

January: 1,170

February: 1,349

March: 1,726

April: 1,966

May: 1,955
 June: 2,273
 July: 2,074
 August: 2,206

September: 2,107
 October: 2,023

November: 1,957

Monthly Change: Down 3.2%

Average # of Active Listings

January: 1,003

February: 987

March: 1,004

April: 1,422

May: 1,439

June: 1,762

July: 2,422
 August: 2,295

September: 2,544
 October: 2,290

November: 1,695

Monthly Change: Down 25.9%

* all graphs/data are for single family homes in Salt Lake, Utah and Davis Counties. 

Industry Updates

Rents Keep Climbing in SLC - Rents in Salt Lake City climbed 1.5% in the past month, marking 10 straight months of gains and totalling a blistering 18.0% compared with the same time last year. Median rents for a one bedroom have climbed to $1,082/month while 2 bedrooms close in on the $1,400 mark at $1,383. West Valley City and West Jordan also saw significant monthly gains at 2.6% and 1.4% respectively, but the city that’s seen the largest gains since march of 2020 is Herriman at a scorching 32.2%. 

Why Do Tenants Decide to Move? - With all landlords hyper focused on resident retention in an effort to minimize their largest expense (turnover), it behooves us to understand what factors actually cause tenants to move? A recent report from real estate giant Redfin surveyed 1023 people who moved into a new home since March of 2020, and the results might surprise you. When asked how much, if at all, this issue factored into their decision to move, 40% of renters cited cost of living, 35% said crime and safety, 22% indicated school quality, 13% said taxes, 12% mentioned racial diversity, and 10% pointed to climate change. To best utilize this information, we must first evaluate what is within our direct control to change. Only one item on this list stands out, and while there is little we can do to decrease the crime rate in a given area, there is plenty we can do to enhance the safety of your rental property. We wanted to provide two resources (here and here) for those owners looking to increase security at their rental properties. Please let us know if you would like to discuss this issue and we are happy to make a few recommendations.

Higher Income Millennials Choose Renting Over Buying - According to a recent report from RentCafe, the share of rental applications where individuals earn over $50,000 per year is at 39% - a 5 year high. So called “lifestyle renters”, or those lacking the wealth to “rent by choice” but are generally categorized as DINK (double income no kids), have the income to buy in a less competitive market but instead are renting higher end properties. In other words, the sizable increase in home prices you read about in the real estate section above, has drastically increased the number of people who chose to rent despite having sufficient income to purchase. This is good news for landlords as the increase in well qualified applicants reduces risk. 

Changes to Tenant Screening - The Consumer Financial Protection Bureau is enhancing it’s policing efforts for tenant and employment screening companies over name matching procedures. In a statement dated November 4th, the bureau indicated that “Companies who assemble and use consumer data to determine the eligibility of applicants for employment, rental housing, credit, and insurance must take reasonable steps to fortify consumer reports against false and inaccurate information”. The crackdown is actually a positive step for rental operators, as the practice of name-matching only unfairly harms consumers who are denied housing due to having the same name as someone with negative information in their credit or employment history. It’s essential that we make housing decisions based on accurate information so better policies help all stakeholders.

Real Estate Investing Resources

Rent-vs-Sell Calculator ROI Calculator Vacancy Loss Calculator