This is a follow-up post from Oct 20, 2008. On the 22^nd of October Park City’s local paper The Park Record ran an article stating that average home prices in Park City have shown only a 5% decrease while sales volume is down over 40%. In the previous YouInParkCity.com blog post it was noted that some Sellers “don’t have/or need to sell” as a reason why prices have remained somewhat stable in Park City and Deer Valley. The homes and condominiums that are currently selling have represented strong values and have been some of the most aggressively priced. So the question is “why doesn’t everyone lower their price?”

          We want to explore a possibility beyond Sellers being “stubborn” or not truly needing to sell unless they get the price they want. Another reason why Sellers haven’t lowered their price may be because they truly can’t afford to do so.

          While statistics can show that pricing has remained stable here in Park City and Deer Valley, it can also be shown that many of the properties that are selling have sales prices close to those of 2005. For a Seller that bought last year or on 2006, they are not necessarily “upside-down” but they may be “underwater” or in a negative equity position. These owners aren’t necessarily in danger of losing their home, but they are in a position of being “stuck”. While these owners may wish to move, they would need to bring a check to the closing and actually pay to sell their home. To a lesser extent, Sellers may lose the money they had put down originally. For many residential homeowners the majority of their wealth is tied to home equity. They don’t have the ability to walk away from equity they had, or start over again with none.

           Some national data has shown that nearly 20% of homeowners that bought their home since 2006 may be in a negative equity position. For many of these homeowners, there are only a few ways out of their home and most of them have very harsh financial impacts. Frequently, these homes stay on the market at a sales price that doesn’t reflect the current market conditions. Prices may stay stable due to the fact that these owners truly can’t afford to lower their price.

Submitted by Todd Anderson

Todd@youInParkCity.com

         I was speaking with a fellow REALTOR® here in Park City last week and she stated that she was surprised that prices here in Park City and Deer Valley hadn’t fallen as much as she had expected.  While news articles from around the country show home values dropping as much as 30%, Park City hasn’t seen very dramatic price changes. Many people ask “why?”  Here are some of the contributing factors.

          The reasons vary somewhat according to the property involved; primary residences and second or vacation properties. In this article we’ll focus on the latter. Second homes and vacation properties are a luxury item and they are bought by people that can afford them. As much as 70% of Park City and Deer Valley area property can be attributed to second homes and vacation property. The majority of these property owners have relatively small or no mortgages on these properties and most have an “if it doesn’t sell at this price, I’ll just hold onto it” attitude. Few of the second home owners have a true need to sell. In the sellers mind, the property is worth ‘x’ and in time it probably will be. Sellers here in Park City have “staying power” and while overall sales volumes are currently down 45%, prices are holding somewhat steady. Sellers are willing to wait, and Buyers are not necessarily willing to jump at prices that have held steady which leads to more property on the market. This Seller’s resistance to drop their prices and ability to wait is a major reason that prices in resort towns don’t fall as much as national averages in a down market.

          A driving force behind the national market downturn was the sub-prime and “risky” mortgages. Park City saw relatively few of these mortgages. It may seem odd from the outside, but few of the second homes with values over $1M have any mortgage debt at all. Historically, fifty percent of real estate purchases in Park City and Deer Valley are cash. In general even with as easy as credit was recently, it was still tougher to mortgage secondary homes as creditors know that if there is trouble, these are the first thing debtors walk away from. That is not to say that sub-prime mortgages in our market don’t exist or that there are no property owners that are in financial trouble, only that this number is smaller in relation to the Nation’s trouble spots.

          Another reason that Park City second home and vacation property values have stayed strong is that things the have not changed much here.  People still want to be here, whether it is to vacation or to live. Park City is a beautiful, easily accessible. The city offers endless recreational opportunities and a great climate. Park City’s economy has not been greatly impacted by the national “crisis”. In addition, the Utah economy has been touted as one of the best in the country. Finally, there is scarcity built into Park City. There are only so many places in the world that are like our city, and much of the town is truly “built out”.

          These are some of the reasons that Park City has not seen a dramatic change in its prices as compared with other spots in the Country. That is not to say that prices in Deer Valley and Park City have not fallen; they have. As noted earlier, pricing remains fairly steady, but many of the properties that have sold were priced aggressively and represent pricing similar to 2005. There are good values and realty opportunities in Park City, and the situation for each seller is unique. Just don’t expect to see rows of homes for sale with foreclosure signs in every other window as you search for a place to live or vacation in Park City.

          For more detailed information about recent price trends in Park City, Utah and Deer Valley, UT go to: http://www.youinparkcity.com/. Price trends, highs and lows, averages and days on market information is available for each Park City neighborhood.

          Amidst all of the recent horrible national housing and economy news Park City, UT has received some great accolades. In addition to the release of The SKI Magazine readers’ poll recognizing Deer Valley as the top ski resort in North America (see our www.YouInParkCity.com blog post from September 24), Park City has been mentioned by Forbes Traveler and featured in a USA Today article this past week.

          In the ForbesTraveler.com article which falls under their “Inspirations” section, travel writer Sarah Tuff Dunn in naming Park City, Utah as one of the 20 prettiest towns in America says:

“I was struck by just how blue the sky was, and how dry the air, during a ski trip one March. I was used to soggy or icy conditions back East. After I skied seemingly bottomless powder at nearby Deer Valley, the whole town of Park City (which looked like a candy village, thanks to all the different colors of the Victorian buildings) seemed like it was on some crazy high from the sun, the snow and the altitude.”

Photographer Krist (who also contributed to the list) sums up the intangible quality shared by the pretty towns on his list: “They haven’t been homogenized, they still have their local character-and the charm is real.”

        See http://www.forbestraveler.com/best-lists/americas-prettiest-towns-story.html for the rest of the list.

          While Forbes was recognizing the beauty of Park City, UT, the USA Today was touting how easy it is to get here. Beauty can be very subjective, but location isn’t. Larry Olmstead, travel writer for the USA Today, notes in the Friday Oct 10, 2008 article titled: Second homes: Park City is just a hop, skip and a ski slope away:

With ski towns, getting there is rarely half the fun. Many, like Aspen and Telluride, are hours from a major airport. Moreover, small mountain-town airports operate at the whims of nature.

But the ski resorts surrounding Salt Lake City are the most accessible in North America, a city-bus ride away from a major hub airport that rarely closes. Three of the biggest Utah resorts can be found in one place: historic Park City.

        The article goes on to describe real estate opportunities in and around Park City’s three resorts - The Canyons, Deer Valley, and Park City Mountain Resort -

see (http://www.usatoday.com/travel/destinations/secondhomes/2008-10-09-park-city-utah_N.htm?csp=34 ).

          What stands out most is the age old real estate mantra: location, location, location. While Park City is experiencing the same economic and finance pressures as the rest of the Nation, the town has something that won’t change. Park City is a very desirable place to be. For those of us lucky enough to live here, we are in a place that many people come to vacation. For those who own a second home here, you have a beautiful place to go and recharge your batteries that is easy to get to from most places in the USA. Our location and the scarcity of beautiful and easily accessible towns will keep home values in Park City stronger in times of economic uncertainty.

          For information on the average costs of housing in the Park City area see the neighborhood sections of http://www.youinparkcity.com/ or call us at 888-968-4672.

        Posted by Todd Anderson

Todd@YouInParkCity.com

          Saturday Morning TV seems to be filled with shows on HGTV and the DIY network among others that show people upgrading their homes followed by a Realtor telling them how much more it is worth.

          The country’s present real estate market shows us that those upgrades may not all be good and definitely don’t necessarily make you money in the end. This is not to say that something can’t be bought at a great price have a few cosmetic upgrades done and be sold for a profit, but the days of the easy fix and flip may be gone.

          The Park City area, having a resort originally built in the 60’s and 70’s (not to mention miners shacks from the early 1900’s), has some properties that are in need of a remodel. The majority of the guests coming here expect a world class resort and accommodations to match.  Real estate buyers in Park City have come to expect granite countertops surrounding professional grade appliances, jetted tubs and travertine tile in bathrooms, LCD or Plasma screen TV’s, hot tubs plus plenty of snow in the winter and sun in the summer.

          Maybe your Park City home or condominium doesn’t currently have all this. Do you have to upgrade? If so, what should you do and how much should you spend? To answer these questions you really need to consider what end result you are trying to accomplish. Are you looking to sell soon? Are you looking for better rental revenue? Are you looking to just please yourself or spouse by making your place more comfortable? Do you just want to smile when you turn the corner and see your home come into view? Each of theses answers may lead to a different upgrade and investment in your property.

          If your intention is to fix up the property and sell it, consult your local Realtor about which project to tackle first and the resulting revenue difference it may make in the sales price of your home. Remember that the most important part will be to get people to come into your Park City house or condominium, so work on the outside “curb appeal” first (this is the first and last thing people see when they come to look at your property).

          If your intention is to remodel the inside of your home, take a look at the cost of remodels and the average return on that investment in the Sellers section of our website. Remember why you are making an upgrade, if it brings you happiness while you are living in the home; consider that value in your return on investment calculation.

          Also, for those of you that plan to “do-it-yourself” note that it is never as easy as the ½ hour TV show would lead you to believe. Think about what type of person you are (are you a perfectionist or do you settle for adequate?), make sure that you finish the project to the end and not just do “good enough” especially if your end wish is for better resale value.

          Not to be out-surveyed by Ski Magazine (see the previous www.YouinParkCity.com/blog ), Skiing Magazine has come up with more reasons to visit and enjoy the Park City winter scene.  The current edition highlights a survey conducted to identify reasons, other than skiing, why Park City ranks as one of the best ski destinations in North America.

          Need your skis tuned?  Jans Mountain Outfitters was ranked as the third best in the country.  They have stores in town and on the mountain at Deer Valley and Park City Mountain Resort.

          Don’t want a hassle with resort transportation.  Don’t worry, it’s free from anyplace in town and from all major resort locations within miles of the three ski resorts.  But for a special treat, try the Karaoke Cab (the Music Taxi is also a good ride).  It was ranked as the second best value in the survey.

          Want to enjoy the après scene after putting in a big day on the slopes?  Park City was ranked as the fifth best overall in the country.  Best dining was the Seafood Buffet at Deer Valley’s Snowpark Lodge. Butcher’s Chop House downtown received special mention.  For upscale dining, Stein Erickson’s at Deer Valley is the only five-star restaurant listed in the survey.  And, don’t forget the music and dancing where Harry O’s pulled in top honors.  On any night you might see Metallica, 50 Cent, LL Cool J, Nas, or any other nationally recognized personality. See the YouInParkCity.com Events calendar and Dining guide for more info.

          If you weren’t a part of this survey, come to Park City to discover the Best for yourself.  Chances are you will be coming back for many years to come.

          Make your plans to ski Park City’s three resorts - Deer Valley, Park City Mountain Resort and The Canyons - now.  We’ll have the snow ready for you soon.  And don’t forget the summertime activities (ask a local and they’ll tell you they moved here for the winter and stay because of the summer).  We have some very special, un-crowded things to do until it snows.

          Once you’ve experienced Park City, you’ll want to make it a lifetime experience, and any of the agents with YouInParkCity.com can help make that happen.  Check out the website, then call or email for more information.

Posted by Ken Drummet

Park City scores again with 3 resorts in SKI Magazines top 15 ski resorts in North America!

          SKI Magazine released its annual reader’s survey and Deer Valley has retained its top spot as the # 1 ski resort in North America.  Park City Mountain Resort moved up from sixth to fifth place and The Canyons jumped from 18^th to 13^th place.  In short another great year for the Park City ski resorts! 

          Skiers and resort home buyers today are looking for more than just the skiing; they are looking for a total vacation experience.  A Park City vacation starts with the ease of getting to the slopes from Salt Lake City Airport (only 30 minutes away), extends to the night life of Main Street, shopping and other entertainment for the non-skiers,  cross country skiing and snow shoeing represent just some of the experience that goes far beyond Park City’s 3 Ski (and snowboard) Resorts. 

          Deer Valley has been ranked #1 four out of the past eight years.  They continue to be ranked #1 in service, food and grooming year after year.   Deer Valley limits itself to 6,500 skiers per day skiing on its two thousand plus acres.  The limitation is set not by how many people the mountain can handle, but by how many skiers the resort can handle in terms of food service. Un-crowded slopes lead to a great experience.  For accessibility Park City is by far the best ski location in North America, offering free skiing on your day of arrival. None of others can this offer this convenience.

          These great reader poll results should make Park City real estate the beneficiary of more people putting Park City into their ski plans.  Park City is more and more being recognized as one of the premier ski and resort destinations in the world.  It remains on a cost /value comparison a better value than Vail or Aspen.  The fact that interest rates are currently very favorable (although tougher in terms of qualifying) bodes well for real estate sales. Great ratings from skiers and snowboarders will keep Park City real estate desirable to own and help to keep property values here high.

          All three Park City Ski Resorts and the city itself are very pleased with the ratings again this year. 

SKI Magazine Top Ten North American Ski Areas:

• 1. Deer Valley, UT
• 2. Vail, CO
• 3. Whistler / Blackcomb, BC
• 4. Snowmass, CO
• 5. Park City Mountain Resort, UT
• 6. Beaver Creek, CO
• 7. Aspen, CO
• 8. Steamboat, Co
• 9. Breckenridge, Co
• 10. Telluride, CO
• 13. The Canyons, UT

Posted by Michael Jacobson

          New census estimates shows that Utah has the youngest population in the country.  This bodes well for the real estate industry because of the demand for housing this growing population will require.

          Census figures show that nearly one third of Utah’s population is under the age of 18, and one tenth is under age 5.  The facts that Utah has a large population of women in childbearing years, and that they have more children than average, result in a younger total population.

          University of Utah research economist Pam Perlich also adds that the State of Utah’s economy has been strong in recent years, usually ranking in the top ten percent nationally.  This means that more jobs are available keeping the young people in State and even attracting younger families to Utah for jobs that are available.

          A young population and strong economy also supports the State’s largest industry……tourism and recreation.  This brings us to the long-term benefits that a growing population, strong economy, and growing dependence on tourism and recreation have on the strength of the real estate market in the Utah resort areas, and specifically Park City.

          For now, Park City’s future growth may be dependent on the continued success of the Deer Valley, Park City Mountain Resort, and The Canyons ski areas, but Park City has other reasons to attract home buyers.  Among these are: a hospital set to open in 2009 that will attract new professionals, the new home of the U. S. Ski and Snowboard Association, more than 1500 registered business, 250 retail stores, a new high school building, and the proximity to Salt Lake City and an international airport.

          For current market information on vacation homes or investment properties in the Park City area, use the “Contact Us” button on the top of the web page.  You can expect a response within hours from one of the http://www.youinparkcity.com/  real estate experts.    

Submitted by Ken Drummet, 8/29/2008

           A recent video on the web shows an interview by Hilarie Barsky of Good Morning America Now speaking with Donald Trump about the real estate market. Mr. Trump is quoted as saying that the time to buy is now through next year and that those who don’t may be wishing they had in the future. Trump feels that we are currently at “about the bottom of the market”.

          We see and hear reports pointing in all directions about which way the market is going. Mr. Trump may have some good insights, but can he call the bottom of the market? Only time will tell. He also states in the interview that “the country is obviously in big trouble” and that the banks have failed the people. Buying while home prices are down is good if you can find a way to finance it, and time will probably show that Trump seeing buying signals now was a good call.

            How does all of this relate to the Park City market? The President of the Park City Board of Realtors recently said that prices in the Park City area are holding steady while inventories are on the rise. Economics 101 tells us that this can’t last and the likely solution to drive up demand is to lower prices. Recent sales in the Park City, UT area indicate that prices are falling. The YouInParkCity.com group feels that most of the homes that have sold recently represent aggressively priced houses and condominiums that were a true value. We have recently added a Park City Best Buys page to our website. In its first week, 2 of the 12 properties we identified were put under contract. We will continue to update the site with Park City homes we think are a strong value and monitor the results. The Park City market may not have reached its true bottom, but we are seeing some great values.

          A couple of other things from the Donald Trump interview do ring true in the Park City market. Mr. Trump states that real estate is a local business and that you need to know what you are doing. This idea has been a common theme in the www.YouInParkCity.com/blog. We know what we are doing and we are here to help you with your Park City real estate needs.

            To see the Donald Trump interview go to: http://abcnews.go.com/video/playerIndex?id=5576708 or search ABC News Donald Trump 8/13/2008.

Posted by Todd Anderson

          Let the bargain hunting begin.  Home prices may still be falling, but they are getting low enough for some investors to be buying and selling to pocket a tidy profit, or buying investment property that actually returns a positive cash flow.

          Rock-bottom prices have finally begun to lure real estate investors into the fray with the effect that prices may be stabilizing in some markets. For example, in south Florida where home prices have dropped nearly 27% a broker bought a three-family home for $195,000 that had been listed at $350,000.

          Quick flips are in. Even in the Seattle area, where prices are down just 5% (similar to Park City) from a year ago, an investor purchased a 2700 square foot home for $330,000 and quickly sold it within 3 months for $415,000 (a 25% profit).

          Many of these transactions involve a “short sale” (see blog dated 5/13/2008 entitled Short Sales in Park City, Utah), where the seller owes more than realistic market value, and the lender is willing to accept a low offer. But, in the Park City market, some transactions just reflect the lower market value. In other words, there are some real bargains on the market right now!

          This week, I talked to representatives of the three ski resorts in Park City: The Canyons, Park City Mountain Resort, and Deer Valley. They are all reporting that advanced sales of lift tickets and skier services are substantially ahead of last year already. It looks like another great ski season in Park City, UT is just months away.

          And more good news was reported in the Salt Lake Tribune this morning.  A new survey by Ball State University’s Bureau of Business Research ranked Utah the second best state in the country for manufacturing success. Previously, Forbes.com and CNBC placed Utah in the top five states for its business climate. Today, the Nation’s Unemployment Rate was announced at 5.7 percent for July with a loss of 51,000 jobs while Utah gained 1.3 percent jobs and listed unemployment at just 3.2 percent.

          For current market information on vacation homes or investment properties in the Park City area, use the “Contact Us” button at the top of this page. You can expect a response within 24 hours from one of the http://www.youinparkcity.com/  real estate experts.

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Submitted by Ken Drummet, 8/2/2008

            The second quarter of 2008 has come to an end and the statistics are out for the Park City, Utah real estate market. It is always interesting to see how the numbers stack up to what your gut feeling about how the market is doing. A quick look at the numbers can show that my gut feeling is both right and wrong, as usual, the numbers can be spun to show whichever story you want to tell. Well, almost…

There is almost no classification in which it can be shown that sales volumes are up. Single Family home sales for the first 2 quarters of the year were off by 45%.  Pricing though was effectively flat (up 1% in town, down 6% in the Snyderville Basin, up 1% in the Heber Valley). Bright spots can be found in single family home sales if you look at Woodland and Francis, sales prices were up 80% from the same period last year. 

          Over-all condominium sales showed a drop of 24% in sales volume, but prices were up by 18%. There were a few newly completed projects that skewed the numbers (please note that it can be argued that this is almost always true in the Park City real estate market). Sales at the Newpark Hotel in Kimball Junction totaled over $24 million and gave the Kimball Junction area a 95% boost in sales volume and a 131% boost is dollar volume of sales. Similarly, the Old Town area shows remarkable numbers unless you remove the sales of Silver Star (new ski-in / ski-out property at the Park City Mountain Resort) which showed over $54 million in sales. 

          Vacant land showed a 60% decrease in unit volume sold while overall pricing was up 14%. The telling number here might be that there are over 1300 active listings for vacant land on the Park City MLS and 109 sold in the first 2 quarters of 2008 leading to a 6 year supply of inventory at the current sales pace.

          There are bright spots and dim spots throughout the sales report for the first 2 quarters of 2008.  All real estate is local down to the block, side of the street, which ski run you’re on, or on which hole of the golf course your home sits. For a more complete analysis of the Park City real estate area that you are most interested in, give the YouInParkCity.com Group a call at 888-968-4672 or email us at info@YouInParkCity.com.

Submitted by Todd Anderson

Statistics herein were derived from the Park City MLS. Numbers are deemed accurate and reliable, but not guaranteed.