Apartment Occupancy in Salt Lake City Hits a 13-Year Low

The Salt Lake City/Ogden/Clearfield apartment market has historically been an outperforming market, but fundamentals have faltered in recent months due to mounting supply volumes. Over the past year, occupancy dropped 240 basis points (bps), taking the rate to 94% as of June 2023, according to RealPage Market Analytics. That was the lowest occupancy rate the market has witnessed since June 2010 and registered 70 bps below the national average. For comparison, Salt Lake City’s average occupancy over the past 10 years clocked in at 96%, well above the U.S. average of 95.4% during the same period. As a result of weakened occupancy, apartment operators in Salt Lake City cut rents an average of 1.4% in the year-ending June 2023. Aside from a small dip at the onset of the pandemic, rents in Salt Lake City have not been cut on a year-over-year basis since August 2010. While demand has been solid over the past year, it hasn’t been enough to keep pace with supply. Salt Lake City posted a record-high delivery volume of more than 6,000 units in the year-ending June and completions in the coming year are expected to be more than double that amount (12,400 units). For perspective, Salt Lake City added an average of roughly 3,400 units over the past 10 years and an average of 2,200 units over the past 20 years. Once the supply wave moderates, strong underlying demand drivers will provide a tailwind to performance fundamentals and Salt Lake City should once again return to its outperforming nature.