Archive for April, 2008

Finding Park City Real Estate Value

Thursday, April 24th, 2008

           Park City real estate, like else where in the country, is experiencing a buyers market.  Most of the people I have been working with lately are in search of a “great deal”.  To many people this means a property that is priced below previous sales.  This is certainly one element to consider but we have also been finding value in another area; the remodeled property that is priced at or just slightly above previous sales.

           When the market was in its frenzy with multiple offers and not enough sellers many people saw the increased equity in their Park City home or condo as an opportunity to renovate their home.  Investors jumped into the market with the intent to buy, fix and flip a unit.  But markets change and some investors entered the market at the end of the cycle.  As a result there are properties in most areas that have undergone extensive renovations and can be a much better value than one that is just “priced to sell”.  You may be able to buy that “fixer upper” at a discount but after your remodel will you still come out ahead?  The answer is often no.

          We think you can find some strong values in investor owned properties.  These people, while seeking to maximize their returns, may be willing to break even or sell at a loss in an effort to free up their cash and “keep their money working” via other investment opportunities. Some people, myself for instance, who have remodeled their primary residence will usually decide to stay put unless they have to relocate for work.  See blog post of April 21, 2008

          The advantage of buying remodeled homes and condos is two fold.  If you decide you want to own it long term you don’t need to do much to bring it up to today’s standards; it already has the granite counter tops, fresh paint, new carpet and nice cabinetry.  So, when the market moves up and you decide to sell the property it will be positioned ahead of those that have not undergone the renovation.  In the interim, you don’t have to do the work and/or live in a construction project.

          So when you are having the http://www.youinparkcity.com/ group help you find a best buy in the Park City real estate market don’t be surprised if one of the opportunities we uncover isn’t necessarily the least expensive.

Entry Level housing Deals in Park City

Monday, April 21st, 2008

The Park City housing market has seen change recently.  The rocketing upward of prices has slowed and Park City is returning to a more normal real estate market.  The effect of the changing market varies greatly depending on the price, neighborhood and subdivision. 

The entry level market appears to have been affected the least by the downward pricing pressure here in Park City, Utah.  Finding a single family home in Park City that is under $400,000 is still very hard to do; the same goes for a truly affordable condominium.  There are a number of factors keeping the entry level home pricing up while other Park City marketplaces flatten or fall.

The economy of Park City and most of Utah is still strong.  Job losses and cutbacks have not been a problem here, and the resorts are still enjoying strong tourism.  The fact that the job market hasn’t changed much means that people living in Park City aren’t falling behind on mortgage payments and aren’t being forced to sell their homes. 

The entry level tier of the housing market has the most resistance to falling prices.  While no-one ever wants to take a loss on an investment, the people who scraped everything together to buy the home they live in truly can’t afford and refuse to take a loss and start over.  If these people aren’t forced into selling their homes due to job-loss or some family tragedy, chances are they will just stay where they are until such time that the market changes or they have accumulated enough wealth to move upward within the area. 

People still want to live in and raise their families in Park City.  Demand for housing, especially entry level housing has not changed much.  There is a very strong service industry in Park City and the wages that coincide with these jobs dictates that entry level housing in Park City is what these workers can afford.   The recent changes affecting credit and financing have made it harder to get loans, but in truth these were not the people that needed sub-prime loans anyway. 

Things do happen and people are forced into selling their homes at “rock bottom” prices at times in order to move them quickly, but there are few indicators that “the bottom is falling out” and that entry level pricing will fall dramatically in the near future.  For more information regarding pricing in specific Park City real estate neighborhoods and/or subdivisions, visit http://www.youinparkcity.com/ 

Rental Income and VRBO

Tuesday, April 15th, 2008

 VRBO.com is: Vacation Rentals by Owner a web portal for rentals.  The site allows you to advertise and rent out your property on your own.   For a relatively small price ($300-$500 for a year) you can advertise your property online and find short term renters.  The site is well known amongst vacationers and is gaining popularity and available listings all the time. Many Park City real estate owners and investors look to this site to increase their exposure and rental income.  I have often been asked by prospective property Buyers “Can I increase the net rental dollars if I put it on VRBO?”  The answer is: “maybe”.  VRBO is an option and when you consider that property management companies in Park City take up to 50% of the rental revenue in return for their services, VRBO’s advertising costs are fairly insignificant.  There are however many hidden or unspecified costs.

There are cleaning services that need to be factored into the equation.  Some VRBO users add in a cleaning fee to the rental price to handle this.  There is also the question of checking in and picking up a key.  Key-boxes at the door can handle this and some rental companies provide this service for a nominal fee.  Maintenance can also be a factor: if the plumbing backs up, who is going to respond?  Small per service or hourly companies can take care of this issue.   The most daunting tasks though are answering the questions (both when guests are “in-house” and before they arrive) and dealing with problems that occur during the stay. 

Being a small operator, you do not have the luxury of moving guests to another unit if they aren’t satisfied with their accommodations (this is an advantage property management companies have).  You also become the one that answers the late night phone calls.  Finally you need to set up the ability to take credit card payment (this can be handled via Paypal) and be ready to do battle with guests over their charges. 

The question becomes; “Is it worth it for the added revenue?”  Once again, the answer is “maybe”.

Finally, many owners have taken it upon themselves to use this service to find renters and then use an “owner usage block” with the management company they work with; thus increasing their revenue and still maintaining the benefits of a company to handle all the problems.  Beware; this will undoubtedly put you in violation of your contract with your Park City property management company. 

While it may appear that fees for management are high, most property management companies in Park City provide many services that justify their fees. These services include websites, advertising, reservationists, shuttles and drivers, front desk personnel and answering services, breakfast, concierge services, cleaning and laundry, maintenance and more. 

The dates that the VRBO works best for the property owner are often the easiest to book and most desirable.  By removing these from the property management company inventory it only increases their costs and it is reasonable when looking form their side that this would be a violation of their contract with the owner and that the owner should be removed from their rental pool altogether.  It’s a case of “you can’t have your cake and eat it too”. 

So, in terms of what you can do in Park City to increase your nightly rental revenue, VRBO may or may not be a good resource.  You may make more money, but it will cost you time and effort.

If you want more information about VRBO and property management in Park City, Utah go to Click Here and to contact one of our agents. 

Stale searches from Yahoo.com

Thursday, April 10th, 2008

Hitwise (a web metrics company) reported that in March, 2008 the top 4 real estate websites in terms of market share were Realtor.com, Re/max, Yahoo.com and Zillow.com. 

If you watch the month to month statistics that lead to these rankings, nothing seems wrong.  These are big companies with large marketing budgets and many people working to make sure the sites show up when people use various search engines to find real estate. 

As many of the various MLS’s (multiple listing services) become more transparent and the use of the internet increasingly becomes where consumers start their housing searches, web traffic to these sites seems normal.  There is one glaring problem with some of these searches; stale and/or incorrect data, as well as inconsistencies.

Recently while I was working with a Buyer, I was sent a list of MLS numbers that the client wished to see.  There were nine numbers emailed to me which corresponded to the 2 different MLS systems available to the greater Park City, Utah area (Park City MLS and Wasatch Front MLS).  Being a member of both the Park City and Salt Lake Boards City of Realtors, the numbers didn’t present a problem.  After searching the numbers, I found not one “active listing” in the homes my client had liked.  All of the listings had sold or expired, some had new listing numbers.  The sales had happened a year ago or more.  All of the data that my client had searched was stale and effectively worthless.  What a waste of time!  I asked what search was used and the response was “Yahoo”.    

I redirected the Buyer to my website http://www.youinparkcity.com/ which features an IDX feed from the Park City MLS and my client found current active listings and information.

While the You In Park City group will never have the budget of a Yahoo or Zillow, it is somewhat comforting to know that we will always have a better ability to stay current and offer better information and service than the big dot com’s.