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Population and Households5s of October 1, 2012, thepopulation of the Provo-OremHMA is estimated at 554,400. Since2008, the population has increased by13,350, or 2.7 percent, annually compared with the increase of 19,750, or4.5 percent, recorded annually from2005 through 2007, primarily becauseof a decline in net in-migration afterFigure 4. Population and Household Growth in the Provo-Orem HMA,2000 to ForecastAverage Annual 02000 to 20102010 to CurrentPopulationCurrent to ForecastHouseholdsSources: 2000 and 2010—2000 Census and 2010 Census; current and forecast—estimatesby analystFigure 5. Components of Population Change in the Provo-Orem HMA,2000 to Forecast12,000Average Annual ChangeP r o v o - O r e m , U T C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I SA10,0008,0006,0004,0002,00002000 to 20102010 to CurrentNet Natural ChangeCurrent to ForecastNet MigrationSources: 2000 and 2010—2000 Census and 2010 Census; current and forecast—estimatesby analystFigure 6. Number of Households by Tenure in the Provo-OremSubmarket, 2000 to rent2010RenterOwnerSources: 2000 and 2010—2000 Census and 2010 Census; current—estimates by analystthe national recession. From 2005through 2007, as workers followedincreased employment opportunitiesin the HMA, net in-migration peakedat an average of 9,000 people annually, more than 3 times the average of2,850 people annually from 2000 to2005. Net in-migration has decreasedsharply since 2008, averaging 3,850people annually. During the next3 years, the population in the HMA isexpected to increase by an average of11,650, or 2.1 percent, annually as therecovering job market supports continued net in-migration into the HMA.Currently, 150,300 households residein the HMA. From 2000 to 2010,growth in the number of householdsaveraged 4,125, or 3.4 percent, a year.Since 2010, growth has decreased toan average of 2,650 households, or 1.8percent, a year. During the next 3 years,household growth is expected to increase slightly, to an average rate of3,025 households, or 2.0 percent,annually. Figures 4 and 5 illustratetrends in population and householdgrowth and the components of population change, respectively, from 2000through the forecast period. Figures 6and 7 depict the number of householdsby tenure in each submarket.Population growth trends differ significantly between the two submarketsbecause of differences in housingdevelopment patterns and householdcharacteristics. The Provo-Orem submarket, which includes the centralcities of Provo and Orem, is home toapproximately 203,700 people, or 37percent of the HMA population, downfrom 50 percent in 2000. Populationwithin the submarket increased by anaverage of 2,450, or 1.2 percent, annually from 2000 through 2006 beforedecreasing by an average of 1,275,or 0.6 percent, annually from 2007

6Population and Households ContinuedFigure 7. Number of Households by Tenure in the RemainderSubmarket, 2000 to Current80,00070,00060,00050,00040,000P r o v o - O r e m , U T C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I ces: 2000 and 2010—2000 Census and 2010 Census; current—estimates by analystthrough 2010. Since 2010, populationgrowth resumed at an average of 1,075people, or 0.5 percent, annually. Netout-migration from the Provo-Oremsubmarket averaged 4,775 peopleannually from 2005 through 2007,because many residents followed thegreater job creation in the Remaindersubmarket. Net out-migration decreased to an average of 3,375 peopleannually during 2009 and 2010 as jobgrowth in the Remainder submarketslowed. The number of households inthe Provo-Orem submarket increasedby an average of 470, or 0.9 percent,annually from 2000 to 2010. Since2010, household growth has declinedto 320, or 0.6 percent, annually. During the forecast period, the rate ofpopulation and household growth inthe submarket is expected to remainslow, averaging 1,275, or 0.6 percent,annually, and 380, or 0.7 percent,respectively.The Remainder submarket has acurrent estimated population of350,700, accounting for 63 percent ofthe HMA population. The population of the submarket increased byan average of 9,500, or 4.6 percent,annually from 2000 through 2005 andby an average of 18,600, or 6.9 percent,annually from 2006 through 2010.Since 2010, population growth hasslowed to an average of 9,950, or 3.0percent, annually. Net in-migration tothe Remainder submarket averaged13,800 people annually from 2005through 2007 before decreasingto average 5,650 people annuallyduring 2009 and 2010. The numberof households in the submarketincreased by an average of 3,650, or5.7 percent, annually from 2000 to2010. Since 2010, household growthhas declined to 2,325, or 2.6 percent,annually. The Remainder submarkethas experienced substantial residential building activity and in-migrationsince 2000, increasing its share of theHMA population. The submarket isexpected to benefit from continuedemployment growth and high levels ofsingle-family home construction during the next 3 years. The Remaindersubmarket’s population growth willoutpace the slower population growthin the Provo-Orem submarket duringthe forecast period, with populationand household growth expected toaverage 10,350 people, or 2.9 percent,and 2,625 households, or 2.8 percent,annually.

Housing Market Trends7Sales Market—Provo-Orem SubmarketP r o v o - O r e m , U T C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I SThe sales housing market in theProvo-Orem submarket is currentlysoft, with an estimated vacancy rateof 2.1 percent, equal the rate in April2010 (Table DP-2 at the end of thisreport). According to data from HanleyWood, LLC, sales of existing homesaveraged 5,050 annually from 2005through 2007 before declining sharplyto an average of 3,125 existing homessold annually from 2008 through 2010.During the 12 months ending June2012 (the latest data available), existinghome sales decreased by 180, or nearly6 percent, to 3,100 sales compared withthe number of sales recorded a yearago, but the number was equal to theannual average from 2008 through2010. During the same period, existinghome sales prices decreased more than1 percent, to an average of 196,300, adecline of more than 1 percent compared with the average of 199,100 ayear ago and of nearly 11 percentcompared with the average of 219,500from 2008 through 2010. Approximately one-third of the nearly 9,500existing homes sold during the past 12months in the Provo-Orem HMA werein the Provo-Orem submarket. Duringthe 12 months ending June 2012, newhome sales in the submarket totaled170, comprising 12 percent of total newFigure 8. Single-Family Building Permits Issued in the Provo-OremSubmarket, 2000 to 2012450400350300250200150100501211Notes: Includes townhomes. Includes data through September 2012.Sources: U.S. Census Bureau, Building Permits Survey; estimates by 020000home sales in the HMA. New homesales increased 27 percent from the 130sold during the previous 12 months butdecreased nearly 15 percent from theannual average of 190 sales from 2008through 2010. Sales prices for newhomes during the 12 months endingJune 2012 averaged 244,500, anincrease of 20,200, or 9 percent, froma year earlier and equal to the averageprice from 2008 through 2010. Theweak sales market is exacerbated bycontinued foreclosure activity. According to data from Hanley Wood, LLC,during the 12 months ending June2012, REO (Real Estate Owned) andforeclosure sales comprised 35 percentof existing home sales in the submarket, down from 36 percent a year earlierbut a significant increase from 5 percentin the second quarter of 2006, beforethe national recession.Less than 10 percent of new home(single-family and townhome) construction in the HMA during the past decadeoccurred in the Provo-Orem submarket,limiting the availability of new homesto purchase. Because of natural barriers,including Utah Lake and the UintaWasatch-Cache National Forest, andadjacent urban areas that are alreadybuilt out, developable land within thesubmarket is scarce. The lack of available land in the submarket causes mostdevelopment to occur in the northern part of the submarket, along theInterstate 15 corridor, which is alsonear Utah Transit Authority Frontrunner mass transit stops and other services. Despite the soft home sales market,builders recently increased constructionactivity for single-family homes. Duringthe 12 months ending September 2012,single-family permitting increased 23percent from a year earlier, to 200homes permitted (Figure 8). Singlefamily permitting, which includes

8Housing Market TrendsSales Market—Provo-Orem Submarket Continuedsingle-family homes and townhomes,averaged 360 homes per year from2000 through 2006 before declining toaverage 160 homes annually from 2007through 2011.P r o v o - O r e m , U T C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I SDuring the next 3 years, demand isexpected for an additional 790 newhomes in the submarket (Table 1).A portion of the estimated 1,175other vacant units that may reenterthe market will satisfy a portion ofthe expected demand. Demand is ex pected to concentrate in the 200,000to- 250,000 price range (Table 4).Table 4. Estimated Demand for New Market-Rate Sales Housing in theProvo-Orem Submarket, October 1, 2012, to October 1, 2015Price Range ( 98,999249,999299,999399,999499,999and higherUnits ofDemandPercentof Total14031020085401517.238.725.810.85.42.2Note: The 10 homes currently under construction and a portion of the estimated 1,176other vacant units in the submarket will likely satisfy some of the forecast demand.Source: Estimates by analystRental Market—Provo-Orem SubmarketRental housing market conditions inthe Provo-Orem submarket are tight,with an overall estimated vacancy rateof 3.3 percent, down slightly from3.6 percent in April 2010 (Figure 9).According to data from Reis, Inc.,the apartment vacancy rate increasedslightly from 4.0 percent in the secondquarter of 2011 to 4.3 percent in thesecond quarter of 2012. During thesame period, the average apartmentrent increased more than 1 percent,Figure 9. Rental Vacancy Rates in the Provo-Orem Submarket,2000 to ces: 2000 and 2010—2000 Census and 2010 Census; current—estimates by analystto 780. The average asking rentin the second quarter of 2012 was 690 for one-bedroom units, 810for two-bedroom units, and 910 forthree-bedroom units.The presence of BYU has a significantimpact on the rental market in thesubmarket, because nearly one-thirdof renter households are studenthouseholds. During the fall 2011semester, BYU enrolled 34,100students, down slightly from 35,000in 2006. The university has dormitorybeds for 6,900 students. UVU does notoffer on-campus housing for studentsbut promotes the private developmentof student apartments off campus.UVU, which is primarily a commutercollege, enrolled 32,650 students in thefall of 2010. According to universityrecords, approximately 40 percent ofthose students participate in online,

9Housing Market TrendsRental Market—Provo-Orem Submarket Continuedmultifamily units permitted averaged330 annually, with more than 90percent constructed as apartments(Figure 10). Most of the condominiums constructed from 2000 to 2007were intended for investors, who inturn rent primarily to the studentmarket. Based on preliminary data,during the 12 months ending September 2012, 70 multifamily units werepermitted (approximately 70 percentof which were condominiums), down80 percent from the 340 multifamilyunits permitted (nearly all of whichwere apartments) during the previous12-month period. Recent apartmentcompletions consist primarily of student housing, including the 236-unitJoaquin Village and the 68-unitThe Isles student housing projects.Siena Villas Apartments, an 81-unitproject in Orem, recently completedconstruction, with rents of 825 forone-bedroom units and 1,000 fortwo-bedroom units.After 3 years of reduced multifamilyconstruction activity, as measured bythe number of units permitted, builderinterest returned in 2010 becauseof the tightening rental market.Multifamily permitting averaged 450units annually from 2000 through2006, when permitting was nearlyevenly split between apartment andcondominium construction. From2007 through 2010, multifamilyconstruction slowed to an average of150 units annually, with condominiums accounting for approximately75 percent of units permitted duringthe period. Since 2010, the number ofFigure 10. Multifamily Building Permits Issued in the Provo-OremSubmarket, 2000 to 2012700600500During the forecast period, demand isanticipated for 610 new market-raterental units in the submarket (Table 1).Table 5 provides an estimate of demandfor new market-rate rental housing byrent level and number of bedrooms forthe period from October 1, 2012, toOctober 1, 40320202002012000020P r o v o - O r e m , U T C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I Sor distance, learning. Total enrollmentat UVU increased dramatically from23,300 in 2006, mostly because ofincreasing online learning options.Notes: Excludes townhomes. Includes data through September 2012.Sources: U.S. Census Bureau, Building Permits Survey; estimates by analystTable 5. Estimated Demand for New Market-Rate Rental Housing in the Provo-Orem Submarket, October 1,2012, to October 1, 2015Zero BedroomsOne BedroomTwo BedroomsThree or More BedroomsMonthly Gross Units ofRent ( )DemandMonthly Gross Units ofRent ( )DemandMonthly Gross Units ofRent ( )DemandMonthly Gross Units ofRent ( )Demand760 to 959960 to 1,1591,160 to 1,3591,360 to 1,5591,560 or more2010101010Total60825 to 1,0241,025 to 1,2241,225 to 1,4241,425 to 1,6241,625 to 1,8241,825 or moreTotal705555454515280Note: Numbers may not add to totals because of rounding.Source: Estimates by analyst1,000 to 1,1991,200 to 1,3991,400 to 1,5991,600 to 1,7991,800 to 1,9992,000 or moreTotal6050503535102401,250 to 1,4491,450 or more1010Total20

10Housing Market Trends ContinuedSales Market—Remainder SubmarketP r o v o - O r e m , U T C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I SThe sales housing market in theRemainder submarket is soft, witha current estimated vacancy rate of1.9 percent (Table DP-3 at the end ofthis report). According to data fromHanley Wood, LLC, during the 12months ending June 2012 (the latestdata available), existing home sales inthe submarket declined by 110 sales,or nearly 2 percent, to 6,450 sales,which represented approximatelytwo-thirds of the 9,500 existing homesales in the Provo-Orem HMA. Thenumber of existing home sales in thesubmarket during the past 12 monthswas down 30 percent from the average of 9,200 homes sold a year from2005 through 2007 and nearly equalto the 6,400 homes sold during 2008.During the same period, existinghome sales prices averaged 215,700,a decline of nearly 1 percent fromthe average of 217,600 a year ago.The current existing home sales pricewas 32 percent less than the averageof 318,900 from 2005 through 2007and 21 percent less than the averageprice during 2008. Sales of newhomes in the submarket, however,totaled 1,325 during the 12 monthsending June 2012, an increase of 24percent from the 1,075 sold during theprevious 12 months but more than 70percent less than the average of 4,850Figure 11. Single-Family Building Permits Issued in the RemainderSubmarket, 2000 to 20126,0005,0004,0003,0002,0001,000Notes: Includes townhomes. Includes data through September 2012.Sources: U.S. Census Bureau, Building Permits Survey; estimates by 0012020000sales annually from 2005 through2007. Sales prices for new homesduring the 12 months ending June2012 averaged 244,800, an increaseof 7,300, or 3 percent, from a yearago, but 17 percent less than theaverage price from 2005 through 2007.Mirroring conditions in the ProvoOrem submarket, foreclosure activitycontinues to affect the Remaindersubmarket. During the 12 months ending June 2012, REO and foreclosuresales comprised 35 percent of existinghome sales in the submarket, downfrom 49 percent a year earlier but asignificant increase from 5 percent inthe second quarter of 2006, before thenational recession.Since 2000, more than 90 percent ofsingle-family and townhome construction in the HMA has concentrated in the submarket. New homeconstruction in the submarket isprimarily concentrated in Lehi,particularly in the Traverse Mountainarea and the subdivisions of IvoryRidge and Thanksgiving Meadows.Ivory Ridge, a 285-unit developmentthat is nearly complete, primarilyconsists of townhomes, although theproject includes some single-familyhomes. Single-family construction,as measured by the number of homespermitted, slowed significantly to2,050 homes permitted annually from2007 through 2009, after averaging4,650 homes permitted annuallyduring 2005 and 2006. Single-familyconstruction has since rebounded,increasing during the 12 months ending September 2012 to 1,775 homespermitted, up from 1,175 homesduring the previous 12-month periodbut still much fewer than duringprerecession periods (Figure 11).

11Housing Market TrendsSales Market—Remainder Submarket ContinuedP r o v o - O r e m , U T C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I SDuring the next 3 years, demand isforecast for 7,150 new homes in thesubmarket. The 30 homes currentlyunder construction will meet a portionof that demand (Table 1). In addition,a portion of the estimated 2,450 othervacant units in the submarket thatmay reenter the home sales marketduring the forecast period will satisfysome of the demand. Prices for newhomes start at approximately 140,000.Table 6 presents detailed informationon the estimated demand for new saleshousing by price range in the submarketduring the forecast period.Table 6. Estimated Demand for New Market-Rate Sales Housing in theRemainder Submarket, October 1, 2012, to October 1, 2015Price Range ( )FromToUnits ofDemandPercentof ,999249,999299,999399,999499,999and .7Note: The 30 homes currently under construction and a portion of the estimated 2,450other vacant units in the submarket will likely satisfy some of the forecast demand.Source: Estimates by analystRental Market—Remainder SubmarketRental housing market conditions inthe Remainder submarket are tight,with an estimated overall vacancy rateof 4.1 percent, down from 5.1 percentin April 2010 (Figure 12). The low levelof apartment construction during thepast decade in the submarket contributed to the ongoing balanced-to-tightconditions. The apartment vacancyrate in September 2012 was estimatedat 2.2 percent, down slightly from 2.5percent a year earlier. During the sameFigure 12. R ental Vacancy Rates in the Remainder Submarket,2000 to ntSources: 2000 and 2010—2000 Census and 2010 Census; current—estimates by analystperiod, the average apartment rentincreased nearly 2 percent, to 935.Th

Utah County outside the Provo-Orem CCD. The HMA is the third largest metropolitan area in the state, with a current estimated population of 554,400. Table DP-1 at the end of this report provides demographic data for the HMA from 2000 to the current date. Economy .