Real Estate Market News

Running the Numbers: How Park City's Market Stacks Up

Prudential Utah Real Estate, Mid-Winter Newsletter 2010

A timely convergence of opportunities—dropped prices, low interest rates, availability of product and motivated sellers—have created a “perfect storm” of value in Park City’s real estate market. This opportunity may be a fleeting squall, however, as the nation rises out of a recession. For buyers looking for a refuge for their families, now is the perfect time to take advantage of Park City’s excellent values and excellent choices.

Reduced Home Prices
Home prices in the Park City area have dropped considerably, offering better values than we may see for several decades. While no one can predict with certainty if the local market has hit rock bottom, total sales volume in Park City has climbed slowly but steadily each month since November 2008*.

Reduced Interest Rates
Even if Park City real estate prices fall again, they would need to drop another full 10% to balance out a 1% rise in interest rates. While most believe the first scenario is unlikely, rising interest rates are almost certain to occur. “Going back over 30 years, my data shows that interest rates are at a near historic low,” says Rick Klein of Mountain Summit Mortgage. “Between now and the middle of 2010 would be an excellent time to take advantage of interest rates,” offers Klein.

Limited Availability of Product
In contrast to most of the nation, the supply of quality housing product in Park City has thus far been able to keep up with the demand. However, the relatively small size of resort developments means that this wide selection of product may not last long. Unlike urban projects that offer hundreds of units, Park City’s new construction can quickly become scarce.

Motivation of Sellers
Because our market held up better at the beginning of the national housing downturn, area sellers were reluctant to lower their prices. Today, sellers, developers, and lenders alike are now seeking debt relief, minimizing cost of carry, and working to remove non-performing loans from their books. But, this seller incentive may be short lived; if sellers believe the market will correct, they may quickly become less motivated.

The simultaneous convergence of market forces and an overall soft economy could not offer a more favorable time for buyers. You won’t want to miss it.

*10/09/09 data from Rick Klein, Mountain Summit Mortgage, www.mountainsummitmtg.com

Running the Numbers: How Park City's Market Stacks Up

Prudential Utah Real Estate, Mid-Winter Newsletter 2010

Park City's 2009 real estate market acted a lot like the old adage for the month of March: it came in like a lion and went out like a lamb. At the end of January, the market was down over 50% in closed sales volume compared to the end of January 2008. Values improved every month, so that by the end of December, sales volume was only 17% down year/year. Not only closings, but also pended sales have climbed every month since their low point in February 2009. And, Park City is faring better than every other mountain resort in the West. Here's how the numbers stack up:

Park City 2009 vs. Park City 2008:

  • Starting out the year, sales volume for January 2009 was over 50% down from January 2008
  • Closing out the year, overall sales volume for 2009 was $858 million, down 16.9% from 2008 overall
  • Sales have redistributed across different property types: single family homes now account for over 56% of all sales
  • For many years in the past, vacant lots and condo sales have outstripped sales of single family homes
  • Inventory levels remained fairly stable for the first three quarters of 2009, and dropped in the fourth quarter
  • The number of closed and pending sales increased steadily every month since its low point in February 2009

Park City 2009 vs. Park City 1999:

  • Surveying the decade, the overall median sales price at the end of 2009 is up 65% from the end of 1999
  • The average (mean) overall sales price rose 93% in ten years
  • At the end of 2009, the Dow Jones Industrial Average was down about 10% from its level at the end of 1999

Park City vs. Other Resort Markets Across the West

  • In 2009, Park City had the highest total sales volume of all mountain resorts in the West
  • Even Vail, which has typically outperformed Park City, was off nearly 60% in sales volume (2009/2008)

Looking Ahead

The statistics say that the low point for number of transactions was a year ago, in February 2009, so most real estate professionals believe the Park City market has turned a corner. While prices are still down, the number of sales is up and interest rates have begun to rise. The bottom line? The market is moving, and many investors are now returning to Park City to explore options and make offers.

Year-End Statistics Confirm It's A Buyer's Market

Transactions Same As In '09, But Sale Prices Declined
Park Record Article, Andrew Kirk

29 January, 2010 (Park City) – The Park City Board of Realtors' 2009 year-end report reveals total sales volume for the greater area were down 17 percent from the previous year.

Still, some areas saw improvement, but not all Realtors believe that's evidence of recovery quiet yet.

The Board of Realtors' press release puts the 17 percent decline in context: Vail, Colo. was down 60 percent. Park City fared better because it's a residential or bedroom community as much as a destination resort town, explained board president Mark Seltenrich.

Park City-area Realtors are finding willing buyers, as evidenced by the fact that 2009 actually saw nine more single-family home sales than the year before probably more if not for the frozen credit market.

The reason total sales volume was down is two-fold: the total number of transactions of all types of property was down 18 percent, and second, because those buyers with financing are still looking for the best deals, Seltenrich said.

The median price in Park City dropped from $1.8 million to $1.385 because more homes sold in the lower price range than in the upper.

More Than $858 Million In Park City Real Estate

Single Family Homes Sales On The Rise

25 January, 2010 (Park City) – More than $858 million in real estate transactions changed hands in 2009 in the greater Park City area (Summit and Wasatch counties), according to a report today by the Park City Board of REALTORS®.

The total volume included the sale of homes, condominiums and land. In 2008, total sales exceeded $1.03 billion, which is a 16.9 percent decrease in the volume sold in 2009.

"In spite of two difficult economic years, Park City's economy remains resilient," said Mark Seltenrich, president of the Park City Board of REALTORS®. Compared to all other Rocky Mountain ski destinations, Park City has fared better than our neighbors in Colorado, Wyoming and other resort towns. "For example, in Vail, Colo., REALTORS® reported that 2009 real estate sales were down nearly 60 percent compared to 2008, while Park City was down only about 17 percent."

Sales of single-family homes were the strongest part of the market in 2009, with sales of homes in the greater Park City area in 2009 surpassing the levels of 2008. "This is due in large part to homes becoming more affordable and the desirability of Park City as a place to live and raise a family," Seltenrich added.

Sales of Single-Family Homes
The number of single-family homes sold in the greater Park City area totaled 507 transactions in 2009, a 1.8 percent increase compared to 498 sales in 2008. Sales in Park City limits were up 7.4 percent in 2009 compared to the previous year. The Snyderville Basin saw its sales decline 13.9 percent. Sales in the Heber Valley climbed 18.1 percent and sales of single-family homes in the Kamas Valley increased 29.0 percent compared to 2008.

Median Price of Single-Family Homes
The median price of single-family homes sold within Park City limits during 2009 fell to $1.4 million, a 23 percent decrease compared to $1.8 million in 2008. The Snyderville Basin saw home prices fall to $670,000, down 4.3 percent compared to $700,000 a year earlier. The Heber Valley saw home prices fall 12 percent to $307,500 down from $350,000 in 2008. In the Kamas Valley, the median price of a single-family home in 2009 was down 25 percent at $270,000 compared to $360,000 a year ago.

Sales of Condominiums
The number of condominium sales in the greater Park City area fell to 390 transactions in 2009, down 19.8 percent compared to 486 sales in 2008. Within Park City limits sales fell 28.2 percent. In the Snyderville Basin sales were off 16.3 percent. In the Heber Valley sales were up 40 percent.

Median Price of Condominiums
Prices of condos in Park City limits fell 10 percent to $745,000, down from $825,000 a year earlier. In the Snyderville Basin, the median price of condos sold in 2009 was down 24 percent at $327,000 compared to $430,000 a year ago.

Land
Vacant land sales were down 44 percent in the greater Park City area. In Park City limits, the median price of land in 2009 was $725,000, down 21 percent compared to a median price of $917,500 in 2008. In the Heber Valley, the median price of vacant land was $275,000, down 27 percent compared to $375,000 in 2008. In the Kamas Valley, median land prices were down 7.5 percent at $236,000 compared to $255,000 a year ago.

Looking Ahead
"As prices have come down and properties have become more affordable, more properties in the lower part of the price range have sold, thus lowering the median prices," Seltenrich said. "Sales of higher priced properties have taken place, but at levels below what we have seen in recent years."

Seltenrich said that inventory levels have remained fairly stable since the beginning of the year, but have recently started to decline. This is due to some sellers having taken their properties off the market because they are unwilling to sell at today's lower prices. As inventory levels decline, eventually prices will start to rise, and these sellers may reenter the market.

Buyers continue to be very price sensitive, and are looking for the best deal. Looking forward, distressed sales (mostly short sales and foreclosures) will continue to hold prices down for the first part of the year.

"Park City remains one of North America's premier ski destinations and continues to have the best public education system in the state," Seltenrich said. "The factors that make Park City a great place to live and recreate remain. There will always be demand to own here." With prices lower than they have been in many years, buyers will see the value and continue to invest in the community.

Seltenrich stressed that all real estate is unique, so to find out what the value of any particular property is, one should talk with their local Park City REALTOR®.

The Perfect Storm:

Low Prices and Interest Rates plus Choice Product and Motivated Sellers equals The “Perfect Storm“in Park City Real Estate

December, 2009 (Prudential Utah Newsletter) – Who hasn’t kicked himself at some point for not buying before an investment skyrocketed in value? Say, stock in Apple Computers the year before it introduced the iPod? Or, real estate in Park City before the boom? You’re on your own for your stock portfolio, but you can have a second chance to get into Park City’s real estate market at the right moment.

A timely convergence of opportunities—dropped prices, low interest rates, availability of product and motivated sellers—have created a “perfect storm” of value. This opportunity may be a fleeting squall, however, as the nation rises out of a recession. For buyers looking for a refuge for their families, now is the perfect time to take advantage of Park City’s excellent values and excellent choices.

A timely convergence of opportunities—dropped prices, low interest rates, availability of product and motivated sellers—have created a “perfect storm” of value. This opportunity may be a fleeting squall, however, as the nation rises out of a recession. For buyers looking for a refuge for their families, now is the perfect time to take advantage of Park City’s excellent values and excellent choices.

“Park City, Utah, a popular destination with a mix of high and moderately priced homes, has shown some signs of stabilization."

What’s more, the Park City market is outperforming other resort markets across the country. An October 30, 2009 article in the Wall Street Journal trumpeted fire sales at luxury ski resorts across the West, but noted a striking exception here. “Park City, Utah, a popular destination with a mix of high and moderately priced homes, has shown some signs of stabilization. The number of homes sold as of August of this year was the same—50—as it was by August 2008.”

Even if Park City real estate prices fall again, they would need to drop another full 10% to balance out a 1% rise in interest rates. While most believe the first scenario is unlikely, rising interest rates are almost certain to occur. “Going back over 30 years, my data shows that interest rates are at a near historic low,” says Rick Klein of Mountain Summit Mortgage. However, Klein believes rates will soon rise due to three factors. First, the Federal Reserve’s massive intervention program is slated to end in March 2010. Second, demand will likely decrease, as people shift from safer financial instruments to riskier investments. And third, there is considerable fear in the investment world that government debt may increase inflation and swell supply. “Between now and March would be an excellent time to take advantage of interest rates,” offers Klein.

In contrast to most of the nation, Park City boasts a choice selection of new construction coming onto the market right now. From slopeside luxury condos, to private estates on acres of open space, to older units and single-family homes within the community, the available product offers opportunities for a wide range of budgets and desires. The relatively small size of resort developments means that this wide selection of product may not last long. Unlike urban projects that offer hundreds of units, Park City’s new construction can quickly become scarce.

The final element that forms Park City’s perfect storm for buyers is the mindset of our sellers. Because our market initially held up better at the beginning of the national housing downturn, area sellers were reluctant to lower their prices. “Now, individual sellers and developers alike are generally very motivated,” explains Steve Chin, Prudential Utah Realtor®. “We’re seeing sellers offer not only price concessions, but also other values, like waived HOA dues or added amenities.” But, this seller incentive may be short-lived. Adds Chin, “If sellers believe the market will correct, they may quickly become less motivated.”

For buyers looking for a refuge for their families, the simultaneous convergence of these market forces offers a rare opportunity. You won’t want to miss it.

*10/09/09 data from Rick Klein, Mountain Summit Mortgage, www.mountainsummitmtg.com