Quarterly reports from the Park City Board of Realtors tend to emphasize the positive, and the 2010 End-of-Year Report released last week is no different even though people wishing for a quick market recovery will find it sobering.
That's because, said past-president Mark Seltenrich and new president Patrick Giblin, no matter how bad it is, Park City is faring better than the Utah average, which is faring better than the national average.
In other words, no matter how bad the news, it's still good news in comparison.
The Bad News
"The outlook for 2011 is more of the same as what was seen in 2010," Seltenrich wrote in the report summary. "The market will continue to be very price sensitive it will continue to be a buyer's market ."
Median prices for all property types are down three percent from one year ago; mean average sale prices are down over seven percent, the summary said. Median prices for vacant land fell 50 to 60 percent in some areas, and 43 percent overall.
Sales of foreclosures account for more than one-third of all sales.
"Foreclosures will remain a major factor in the Park City market in 2011," the summary said.
In an interview Monday, Seltenrich said the mean average is down so low because high-end homes either aren't selling, or are selling for less.
An example of this is the King Road Estates auction last week at which no one bid higher than the value of the note on the home even though that amount was less than half the original asking price.
Giblin said the number of foreclosures in the market has been a "huge wake up call."
"It was hard to predict," he added. "We thought we were an island, a bubble in the sky."
Regarding vacant land prices, Seltenrich said "we must go through some pain to get to where we want to be."
Condominium sales are likely not better because financing continues to be a struggle, he said.
The total number of units sold is up from last year, but except for the past two years, there has not been so few units sold in over a decade even though there is more inventory in Summit and Wasatch counties now.
Lastly, the Heber Valley continues to experience the steepest sale-price declines and may not have bottomed out yet, they said.
Overall, Seltenrich said the area's real estate is, in many ways, still "bumping along the bottom of the market."
"We'll be seeing a little appreciation this year, but it will be small," he said.
Good In Comparison
The board is not trying to hide or spin these facts, the two said, because much of it is good news when compared to the larger picture.
"The board tries to put that positive spin on things, and obviously there are a lot of negatives, but if we keep our noses to the grindstone and work together, the story in 2011 will be about pulling out and looking at the bright light at the end of the tunnel," Giblin said at the end of the interview.
According to the summary, total dollar volume in sales surpassed $1 billion because a large number of units sold for reasonable prices. That has only occurred six other times in history and is a 16-percent improvement over last year. Unit sales were up 20 percent over 2009.
Vacant-land sales were up 60 percent. Condo sales were up 22 percent. Single-family home sales were up over 26 percent and comprised 46 percent of all sales and 54 percent of total dollar volume, the summary said.
Property values in many neighborhoods appear to have bottomed out and are improving. There is reason to be optimistic about 2011, especially for single-family home prices, Seltenrich added.
Foreclosures and short sales continue to depress values, but the fact that they only comprise one-third of the market means sellers have adjusted to the new reality an important step to clear out inventory and to allow appreciation to begin again, Giblin explained.
What happened in the Park City real estate market in 2010 is simplified this way: prices came down and people are buying, they said.
That's good news, Seltenrich and Giblin said, because it speaks to the desirability of Park City real estate.
According to the National Association of Realtors, the number of sales in the West at the end of the year was down 1.5 percent.
According to Utah's Economy, a publication of Commerce Real Estate Solutions by Jim Wood at the University of Utah's Bureau of Economic and Business Research, the recession has so shaken Utah families that there is little appetite for homes.
"The lowest inflation and mortgage rates in 60 years, combined with 15 to 20 percent declines in home prices have done little to stimulate demand for housing," the newsletter said. "The current weakness is due primarily to a loss of demand."
Continued foreclosure rates in Utah which RealtyTrac.com has called some of the highest in the nation are only making it worse, it said.
But when the price is right, people are jumping on Park City real estate, Seltenrich and Giblin said.
"Prices are down, but not down that much," Seltenrich said.
Looking at graphs tracking the past 10 years, he would compare current sale price averages with the end of 2006 and early 2007 near the peak.
It also appears that the number of foreclosures in Summit County is in decline, the summary said.
Almost 400 more properties would need to sell in 2011 than in 2010 to get out of the units-sold slump, but the record set in 2005 was an anomaly and unsustainable, Seltenrich said.
Historically, Park City real estate appreciates at a five-to-seven-percent annual rate. There was a major dip around the time of the 2002 Winter Olympics; there was a steep increase in the middle of the decade, and then a sharp decline the last two years. But where Park City was in 2010 is really close to where it should be excluding the extreme peaks and troughs, he said.
"We're going in the right direction," he added.
Years from now, Seltenrich predicts, people will not look back on 2010 and 2011 as a dark period, but years of opportunity when they should have taken advantage of low prices and low interest rates.
Source: Park Record