— By Will Moss of MMG Real Estate Advisors —
After a turbulent stretch marked by oversupply and softening rents, Salt Lake City’s multifamily market is showing signs of stabilization in early 2025. Demand is returning, rent declines are easing and investor confidence is on the rise, all pointing to a market that may have found its footing.
“We’re not calling a full recovery just yet,” says Will Moss, sales agent at MMG Real Estate. “But what we’re seeing is a return to fundamentals, steady demand, measured construction and buyers who are ready to transact again.”
In first-quarter 2025, net absorption reached 1,044 units, outpacing the 894 units delivered and marking the first time in over a year that demand exceeded new supply. Over the past 12 months, approximately 4,500 units were absorbed, well above the metro’s historical average.
Demand Rebounds, But Challenges Linger
Salt Lake City mirrors national trends where improved economic confidence and easing inflation have begun to unlock pent-up housing demand. Notably, demand has been strongest among mid-tier renters, though even luxury properties, despite being the main source of new supply, posted a 1.8 percent rent increase year-over-year.
Still, rents overall declined 0.3 percent annually, continuing a softening trend that began in mid-2023. However, that figure marks the smallest drop since the downturn began, another sign of stabilization.
“Some operators are still offering concessions, but they’re less aggressive than six months ago,” Moss notes. “We’re seeing communities tighten up their operations in preparation for rent growth later this year.”
Occupancy, while below the 10-year average of 94.1 percent, held steady at 92.1 percent for the second consecutive quarter. Downtown remains a hub for new development, with 2,700 units under construction. Yet in areas like South Salt Lake City/Millcreek, where occupancy stands at 93.6 percent and rents grew by 1.8 percent, operators are already seeing improved performance.
Construction Cools Amid Tighter Margins
While 5,800 units remain under construction (5.9 percent of existing inventory), new groundbreakings have slowed significantly. Developers face higher costs, elevated cap rates and stricter underwriting, conditions that have made it more difficult to pencil new deals.
As a result, completions in 2025 are expected to hit a five-year low, offering relief to a market that has absorbed a large volume of units in recent years.
“This slowdown in starts is exactly what the market needed,” says Moss. “It’s going to give rents and occupancy time to catch up, and for investors, it creates a window of opportunity.”
Investor Confidence Returns
That window is already opening. Investment activity surged in 2024, with total transaction volume rising 195 percent year-over-year to $785 million. While the average price per unit fell 15 percent, this is largely due to an uptick in trades of older or value-add assets.
The number of transactions also grew sharply, up 66 percent year-over-year, suggesting broad-based investor confidence across product types.
“We’re talking to groups every week that are sharpening their pencils,” Moss says. “They believe Salt Lake City has the right fundamentals long term, population growth, economic diversity and a favorable business climate.”
Outlook: A Measured Path Forward
Looking ahead, most indicators point toward a slow but steady recovery. Rent growth is expected to rebound to around 3 percent by early 2026, with absorption remaining strong and new supply constrained. That combination is likely to lead to a more balanced market and better-performing assets.
For investors and operators, the key will be identifying submarkets and asset classes where fundamentals are already turning.
“The opportunity now is strategic,” Moss emphasizes. “It’s not about chasing momentum, it’s about placing bets on solid locations, stable rent rolls and long-term upside.”
— By Will Moss, sales agent, MMG Real Estate Advisors. This article was originally published in the June 2025 issue of Western Real Estate Business.