Are we entering a Seller’s Market in Park City, UT?

The Salt Lake Tribune reported that the median sales price for single family homes in Salt Lake County rose last quarter for the first time in 5 years. Will Park City real estate see similar statistics soon?

National statistics are beginning to show strength and there are many reports indicating prices on the rise (similar to the reports from Salt Lake City). Park City and other resort communities tend to lag the national indicators as people must feel comfortable with their primary home before purchasing secondary homes and condominiums.

Sales statistics so far for the year have been flat with the previous year in terms of volume and again this last period showed a slight decline in the median sales price for single family homes in Park City. The decline was not even across all areas and some areas experienced an increase in median sales prices. Inventory levels are having an impact on sales in most areas and especially in the lower price points in all neighborhoods.

Recent Park City area home sales statistics report that inventory levels are at a five year low. This lack of inventory shows very prominently in the lower price levels in all neighborhoods and also can be seen in the lack of REO product. For example, single family homes in Park City under $500K that aren’t considered cabin properties actively for sale numbers under 50 while over 100 such homes have sold in the past 12 months. A look at the Promontory area shows 14 home sales (non-“cabins”) in the past 12 months under $1.5M and only 9 active non-cabin listings offered at under $1.5M.

Park City Home Sales and Inventory

The lack of inventory is causing multiple offer situations in many situations as well as frustration on buyer’s sides trying to purchase a deal.

Lower inventory levels and lower prices will not last long as the demand will begin to force prices up.

As mentioned above, sales statistics and inventory levels vary between Park City neighborhoods and price ranges. Contact YouInParkCity.com for specifics about the price point and neighborhood matters most to you (888)968-4672.

The Park City, UT housing market is often thought of as being different than the rest of the country due to its luxury resort nature, but many of the indicators housing experts are pointing to in the rest of the country are mirrored closely here in Park City.
A Wall Street Journal article today titled ‘Housing Ends Slide but Faces a Long Bottom’ notes gains being made in the construction of new homes in the US Market. Locally in Park City, construction of new homes has yet to rebound, but the combination of lower building lot prices and construction costs has many Buyers weighing new-builds versus purchasing previously owned homes. This trend is even more prevalent in the outlying areas of Park City such as Midway, Heber and Kamas where new home offerings can be found for less than $100 per square foot.

Shadow inventory, tenuous job growth and the likelihood of mortgage rates rising in the future are cited as possible stumbling blocks to the recovery, but the overall tone of the article is positive and while it doesn’t suggest a rebound in pricing, it does see the market at or near the bottom.

An article also from the Wall Street Journal Friday April 27 entitled ‘Stunned Home Buyers Find the Bidding Wars Are Back’ notes that the current lack of supply in the housing market has people offering prices above list for homes in some parts of the country. The article notes that at the height of the housing crisis in 2008 inventory was at an 11.1 month’s supply and that number currently is 6.3 nationally. That represents a 40+% reduction; Park City real saw a peak of nearly 3600 listed properties and now has just 2100 listed across the MLS also a 40% reduction in inventory. Multiple offers and prices being bid up are common with bank REO properties and it is also seen in any aggressively priced property. The prices are not coming near peak levels, and Park City buyers are well in tune with what is a good deal; buyers are aggressively pursuing these deals.

While the Park City real estate market has seen a drop in inventory, the drop in inventory and changes in price have not been equal across all areas of town or all price points. For a report specific to the Park City neighborhood or home value that interests you most contact a realty professional with YouInPakCity.com at (888)968-4672.

A look at Park City home and condominium sales in the first quarter plus some interesting resort news.

If we had to pick out what stood out most about the first quarter of 2012 in Park City, the weather might be the first thing to talk about. Winter just never seemed to take hold this season; snowfall totals for the year were less than half of last year.

The lack of snowfall seems to have affected the locals much more than the tourists. Most locals will tell you that they hardly skied or snowboarded at all this past year and yet Park City Mountain Resort reported that ticket sales for the season were down by just 4%. Similarly the lodging occupancy totals for the year so far are off by only 3%. This is a tribute to area snowmakers and groomers who did an amazing job at area resorts.

Park City area real estate sales for the first quarter of the year were relatively flat compared with the first quarter home sales of 2011. Single family home sales in the greater Park City area registered 81 (down from 100 in the 2011 period) with the median price falling to $692K. Condominium sales saw a slight boost with 131 sales and a median price of $402K up from 121 and $381K for the same period last year. Building lots saw a sharp decline but prices were way up as the number of distressed sales have fallen. Distressed inventory (bank REO and Short Sales) made up less than 20% of the sales and are currently under 9% of the active real estate inventory in Park City.

As we move into the summer season (which has come about quickly with the low snowpack from the winter and current 70 degree weather), real estate in Park City is experiencing a decline in available inventory and deals are getting tougher to find.

For in depth information on buying or selling in a particular segment of the Park City real estate market contact a realty professional with the YouInParkCity.com group at (888)968-4672 or email info@YouInParkCity.com.

Here is a new program designed to insure the value of the home you are buying. Equity Lock Solutions is offering a product called Home Price Protection.

Generally the plan works like this: The buyer or seller of a home or condominium in Park City can purchase a plan of up to $2 million for a one time fee of 1.8-3.0% of the plan amount (costs vary slightly but Keller Williams agents have access to the lowest rates). The plan is tied to a local House Price Index published by the Federal Housing Finance Agency (FHFA). The index for the Park City area is tied to the Salt Lake City metropolitan statistical area. If the index drops from the time of purchase to the time of sale, the plan pays the percentage difference in the fall to the owner at the time of the sale.

If you as a buyer purchased this price protection and bought a $1 million Park City home and five years from now when you go to sell the home the House Price Index has gone down 10%, the Home Price Protection Plan will pay you $100,000 when you sell the house. The plan is a hedge against the housing market going down, not the individual home, so choosing the correct home is still important.

For more in-depth information about this program as well as the current HPI for your area, go to: http://equityocksolutions.com/faq/ .

The NAR (National Association of Realtors) has picked Home Price Protection as their product of the year.

This may give a buyer the peace of mind they are searching for as they wonder if they are truly buying at the bottom of the market.

For more information about Home Price Protection or any Park City or Deer Valley, UT real estate questions contact a realty professional with the YouInParkCity.com Group of Keller Williams Park City Real Estate at (888)968-4672 or email us at info@YouInParkCity.com.

Park City Real Estate Market Turning Upward

The bottom of a market be it stock prices, commodities or real estate in Park City, Utah can really only be seen in hindsight. We can never be sure of the bottom until we look at it in retrospect and study the sales data. While we cannot yet call the bottom of Park City real estate prices, we can see definitive signs of the bottom.

Real estate sales in the second quarter of 2011 show a strong increase in the number of transactions. The 451 closed real estate sales in Park City for the second represent a 20% increase from the first quarter of 2011 and the best quarter since the fourth quarter of 2007.

The recent increase in sales in the area has been accompanied by a decrease in the number of newly listed properties in the Park City real estate market. So while demand is increasing, the supply is falling which should in time lead to an increase in pricing.

While it may be too early to call the bottom of the market in terms of pricing, we may be seeing signs that some of the best deals are gone. It is kind of like that big sale at the store and we are in its last days. There are still good values to be found in the Park City real estate market, but there is far less to choose from. A good example of this may be the Promontory area of Park City: so far this year there have been 15 homes sold for under $1.5M that were not part of the “cabin” communities and only 10 remain in this price range. It doesn’t mean that there are no more deals to be had in the area, only that the remaining opportunities have been picked over.

There are other areas within Park City that show real estate values possibly finding their bottom as well as localized areas which have indicators pointing toward further price reductions. For information on specific buying and selling opportunities in Park City real estate contact a realty professional with YouInParkCity.com.

 Silver Baron Lodge Park City, Utah – Trustee Sale April 15, 2011

            The courthouse steps auction of 16 developer owned units of the Silver Baron Lodge in Deer Valley, Utah took place yesterday at the Third Judicial District Court in Summit County, Utah.

            While the sale did produce many onlookers, it did not have many registered buyers. Buyers were required to submit certified funds of $25,000 to the trustee before the sale and the purchase price was due at the end of the day Friday. These requirements likely kept many potential bidders away from the sale.

            In the end, two units were purchased by bidders offering more than the initial offer from the bank. The four bedroom five bath penthouse model with expansive private rooftop deck was purchased by an investment group. The Silver Baron penthouse model was listed for sale in 2008 for $2.15M. The other Silver Baron condominium that sold to interests outside the bank was the two bedroom model located directly below the penthouse; it had an original asking price of $1.25M.

            The fourteen Silver Baron condominiums which are now bank owned will likely be available in the very near future. A look at the area comparables while adjusting for differences in the subdivisions would indicate that anything under $400 per square foot represents a great value at the Silver Baron Lodge (the least expensive active listing is currently $425/sq ft and the most recent comparable sale sold at $451 per square foot).

            For more information about the Trustee Sale of the Silver Baron Lodge developer owned units and information regarding purchasing condominiums at the Silver Baron Lodge or any other Park City, UT area property contact a real estate professional with the YouInParkCity.com Group of Keller Williams Park City at (888)968-4672.

            Luxury real estate sales in Park City, UT for the year so far show a slight decrease when compared to the pace of 2010.

            2010 saw luxury home sales in Park City, UT buoyed by the St Regis Hotel at Deer Crest and Silver Strike Lodge at Empire Pass.  2011 is seeing strong sales from the new Montage at Empire Pass as well as continuing sales of the Flagstaff condominiums in Empire Pass.

            The average sale price for homes listed at over $2M remains fairly steady at nearly $3M. Relatively small sample sizes in this market combined with the occasional sale in the $10M range have impacts on this data.

            The luxury residence category overall is may be beginning to show more pricing pressure. Currently the Park City MLS shows over 170 homes and 70 condominiums in the luxury category over $2M. Current sales show a discount rate of over 15% from asking price and the influence of undisclosed sales prices across the Park City MLS means that this discount rate could be considerably higher.

            The luxury home market in Park City and Deer Valley is a tough category to consider as a whole because there are many factors which makes each of the homes and condominiums in the luxury category unique. For a more complete analysis and in-depth information about individual properties contact a realty professional with YouInParkCity.com (888)968-4672.

            The March 5^th, 2010 edition of Barron’s PENTA ranked Deer Valley, UT as #6 among the top 15 places to own a second home. PENTA is a standalone quarterly pullout section of Barron’s which focuses on individuals with $5M or more to invest.

            In considering the rankings Barron’s focused “In seeking out and ranking these havens, we looked for beauty, comfort, convenience, a range of lifestyles and — always the paramount criterion at Barron’s — value. We wanted prices that had clearly hit bottom and were either rising or ready to rise.”  The article also notes that “home prices in moneyed enclaves climbed more than 10% last year”.

            The accolades are great; Deer Valley deserves to be named one of the best places in the country to own a second (or first) home. Deer Valley without a doubt ranks among the top spots in the world for the criteria of beauty, comfort, convenience and range of lifestyle opportunities. The Barron’s article notes that the proximity of Park City to Salt Lake International Airport gives the area an advantage over other rocky mountain ski destinations. Reasons why Deer Valley and Park City, UT in general are worthy of these accolades are too numerous to list.

            The Barron’s PENTA article goes on to name and include a photo of a home in Tuhaye as the place to be in Deer Valley. The article notes that sales in 2009 in Tuhaye were 0 while the median price for 2010 was $1.3M (there were 9 single family home sales shown across the Park City MLS for the area in 2010).  Worth noting within this is the fact that nearly all of the sales were bank REO or distressed sales (something that wasn’t mentioned in the article). These sales may represent the new market values for the area and very well may mark the bottom of the market in which case the value proposition for Tuhaye is very strong. Tuhaye has great views of Deer Valley though it is not necessarily part of what locals and Park City real estate professionals recognize as Deer Valley.

            This is not the first time that Park City and Deer Valley have been recognized as one of the world’s best places to own a vacation home; the fact that this trend continues points to the fact that what makes this are desirable has not changed.

            Call the YouInParkCity.com Group of Keller Williams Park City Real Estate to discuss the current opportunities for home ownership in one of the best places to own a (first or) second home Deer Valley, Utah (888)968-4672.

             Two years ago two leading property management companies doing business in Park City went out of business.  Their downfall led to many unpaid bills to local vendors and to the owners of the properties that the companies managed.

            Recently the Summit County attorney has determined that according to the laws of the state, the firms did nothing illegal in not paying home and condominium owners their share of rental revenues. He was quoted as saying “It was bad business practices. Horrible decisions were made, but it was not fraud.” Utah law and the contracts signed by owners allow for the co-mingling of funds and code leaves the oversight of nightly rental managers to local authorities. Other states require that the owners revenue share of nightly rentals be places in a trust account. Local Park City authorities as well as Utah lawmakers have no plans in changing the current laws.

            One of the local property management companies quietly went away while the other has been the object of much ill will and speculation as to where the money went. The bankruptcy of Premier Resorts of Utah dba Deer Valley Lodging (not associated with Deer Valley Resort) left creditors and homeowners with unpaid bills totaling about $13 million. Since the company did not hold real property or many assets, it appears that most of the creditors will go unpaid as the bankruptcy concludes.  Premier Resorts owners have been “tight lipped” about where all of the money went. It appears that while what happened was criminal, it was not illegal.

            The YouInParkCity.com group encourages Park City home and condominium owners to carefully read property management and nightly rental contracts before placing their properties into rental pools. Make sure you understand not only splits, fees, rental rotations and possible revenue sharing or equalization strategies; but also how the property will be marketed and how and when revenues will be dispersed.

             A look at sales for 2010 shows that the Promontory Club area of Park City was one of the sales “hot spots”.  87 Homes and Vacant Lots were sold in the Promontory area during 2010. This accounts for over 9% of all the sales in the greater Park City area for the year.

            To date there have been about 800 lot sales in Promontory and there are currently about 300 completed homes with another 25 under construction. The Promontory area was hit hard by the economic downturn, but recent indications show that investors and value shoppers are buying the deals up quickly. The developer is waiting to release new areas and building lots when they feel that prices and inventories warrant new product.

            Promontory executives currently consider any lot priced under $300,000 or home priced at less than $300/sq ft to be a distressed sale.  Given these parameters, all but one of the 52 lots that sold last year were distressed, and nearly 70% of the 35 homes that sold last year were distressed properties.

            A look at the current inventory shows an inventory level of slightly more than one year for vacant lots, but most still fit within the developer’s distressed category (there are 64 lots for sale in Promontory and 50 of them are priced under $300K, ten are actually under $100K).  Current available Single Family Homes in Promontory total 74 including 4 bank REO’s and 8 short sales with a total of 19 being offered at less than $300/sq ft. The offerings in the distressed category (less than $300/ sq ft) represent less only 10 months worth of inventory at last year’s absorption rate. To put this number in perspective, the absorption rate for Park City as a whole is over 24 months.

             So far this year, 8 sales have closed in the Promontory area of Park City and there are 20 sales pending. Current trends show prices within Promontory on the rise and inventory levels falling. The deals are getting harder to find and Buyers need to react quickly.  Current levels of distressed homes in the greater Park City area are down considerably from their peak.

             For more Promontory Ranch Club information and assistance finding the Park City home that is a “steal” in your book, contact a realty professional with YouInParkCity.com.