Heavy Supply Softens the Provo Apartment Market
Provo has been one of the fastest growing apartment markets across the U.S. recently. And all that new stock has taken its toll on market fundamentals. Roughly 22% of the existing apartment stock in Provo has been built in the past five years, according to data from RealPage Market Analytics. That was one of the nation’s strongest growth tallies and is right in line with the increase seen in nearby Salt Lake City, which has nearly five times apartment inventory of Provo. As a result of record construction activity, apartment market fundamentals in Provo have waned in recent months. Occupancy came down by a significant 270 basis points (bps) in the past year, ranking as one of the nation’s worst annual declines. Occupancy landed at just 92.6% in November, well behind the national norm and the market’s five-year average. With occupancy fading fast, apartment operators in Provo have turned to rent cuts. Prices came down by 3.1% in the year-ending November, which is quite a change from rent hikes that were consistently in the double digits throughout much of 2021 and 2022.