Red-hot real estate market contributes billions to Utah’s economy

With the price of the average single-family home in Cache County now exceeding $500,000, it's no surprise that Utah's red-hot real estate market is contributing billions to the Beehive State's gross domestic product.

SALT LAKE CITY – It should come as no surprise to anyone that Utah’s red-hot real estate market is contributing more to the Beehive State’s economy than any other portion of the business sector.

In the second quarter of 2022, the real estate, rent and leasing industry in Utah contributed more than $29 billion to the state’s gross domestic product, according to a recent report by credit card experts at Capitol on Tap.

Coming in second in the same period was Utah’s manufacturing industry, contributing more than $28 billion, followed by the finance and insurance business, which contributed more than $22 billion.

“For small business owners,” said Damian Brychcy, chief operating officer at Capital on Tap, “GDP is an important indicator of the economy’s overall health and potential for growth. From that perspective, the outlook is generally positive.”

Utah’s economy mirrored national growth trends in 2022.

The national GDP for all industries in the second quarter of 2022 was $25.2 trillion. The real estate industry contributed $3.1 trillion to that total, equating to 12 percent of GDP.

As in Utah, the manufacturing sector also came in second place nationally, contributing 11 percent. ($2.7 trillion)

Capital on Tap used data from the U.S. Bureau of Economic Analysis to identify which industries produced the most money in each state, Brychcy explained.

Here in Utah, the real estate market remained strong throughout 2022, despite some fateful systemic changes, according to James A. Wood, an analyst at the Kem C. Gardner Policy Institute at the University of Utah.

Stating in 2021, there was a shift in the type of statewide building permits issued, Wood explained, with multi-family apartment construction taking precedence over condominiums and single-family units.

With strong demand but fewer single-family units available, prices for those units increased sharply.

The median price of a new, detached single-family home in the Greater Salt Lake area was $465,000 in 2022, an increase of 36 percent.

Here in Cache County, the average home price increased by double that percentage to $518,648, according to the June 2022 report of a Housing Crisis Task Force organized by County Executive David Zook.

Those kinds of fluctuating prices, which reached record high levels, made the real estate tough for consumers to navigate in 2022, Brychcy said. But those prices are now starting to decline, which is promising for buyers in 2023, as well as for the real estate industry in general.

“I think there is a question as to whether that (real estate industry) growth can be maintained in 2023,” Brychcy remarked. “That’s something that everyone needs to be following closely.”

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  • DB January 10, 2023 at 11:16 am Reply

    Government collects billions while millions go homeless and hungry .

  • Poor cowhand February 11, 2023 at 11:21 am Reply

    This growth has made me a millionaire on paper. The state of Utah loves that, but I am still living on $50,000 a year. I can’t get an electrician that is remotely affordable. Timberline electrical ghosted me, but they at least returned my call to begin with. Sure I could sell but, I still could not afford to go anywhere. This growth has jacked up the prices everywhere. I agree with Gov. Cox that the left coast refugees should go to Florida, or at least anywhere but here.

    This Growth sucks!

  • Ttunac February 12, 2023 at 10:48 pm Reply

    The median household income in the valley can’t afford the median priced home. Yet Zook and the county continue to tax you on these unsustainable/fraudulent numbers. They are stealing.

  • Ogden February 17, 2023 at 4:53 pm Reply

    Record prices and growth provide a boon to local product suppliers from lumber to concrete and everything in between, plus all the trades that are employed in the process. Yes things need to happen for the pace to slow and inflation to ebb. Fingers crossed for the best result!

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