Podcast interview with Jeff Spencer and Mark Seltenrich on KPCW Park City Real Estate Numbers Show Increase in Sales http://kpcw.org/2013/01/park-city-real-estate-numbers-show-increase-in-sales/
Bottom of market behind Park City
Gina Barker, The Park Recordparkrecord.com
Posted: 01/18/2013 04:40:21 PM MST
Across the country, experts say the ebb and flow of the real estate market is pointing toward recovery, the market having reached its bottom. The same is true in Park City. In nearly every category in total number of home sales to median prices Realtors saw increases and steady growth in the market.
With so much improvement in many cases double-digit growth in sales amidst an ever-shrinking inventory for buyers to choose from local experts agree that the bottom of the market is behind Park City.
According to the end-of-year report released by the Park City Board of Realtors (PCBR), signs of improvement are everywhere, meaning Realtors are finally able to compare peak prices to rock bottom prices. Even with the price increases and the balancing of the local real estate market, prices are still a far cry from what they once were at the peak of the market in 2009.
"We don't want to go from 0 to 100," said Mark Seltenrich, a Prudential Realtor and PCBR statistician. " Big swings, improving too fast, is not good for the market. Right now, I'd say we're averaging five percent growth a year, and that is a nice healthy amount. It is similar to the growth of the market in the 90s."
"There is not one side, a buyer or seller, that has more power in the game than the other," he added, "and where we're at now is still a really good value."
During the real estate boom, home buying was a very different story.
In Park City, the peak market prices were in 2008 with the median home price at $1.8 million. 2011, that number dropped to $1 million, a total of a 44 percent drop. Condos in Park City saw a similar decline, from $994,500 in 2007 to $522,500 in 2011, a 47 percent drop. In the Snyderville Basin and Jordanelle, home prices went down 27 percent from 2007, $894,550, to 2012, 649,000.
Since the bottom of the market in 2011, and in some neighborhoods this past year, improvement has been slow but steady.
"We have been slowly improving in the past couple of years," Seltenrich said. "What we've seen this year, it feels like we have really turned the corner, in the number of sales, the prices, the inventory amounts, all positive signs."
"If you were looking for a home or condo in a certain price range, a year ago options may have been plentiful, but those deals don't exist this year."
For example, Redstone condos in the Kimball Junction area were selling in the low $200,000 range a year ago, Seltenrich said. This year, prices are starting in the upper $200,000 range.
"If somebody was like, 'I'd buy one for $225,000, and I'll wait for one to come online, that's not going to happen'," he added. "There is no reason for someone to list their property at $225,000, even a bank. At that price today, there would be 50 buyers ready to make an offer, where a year ago, it would sit on the market for a month or two, maybe even longer."
Compared with last year, the entire market stretching from parts of Heber to the Snyderville Basin improved by 13 percent in median price, from $348,250 in 2011 to $395,000 in 2012. Prices dipped slightly in certain markets or housing types, but total prices reflected an increase. Number of sales improved as well, increasing by nine percent. In each category of sales, that fact is still reflected. The number of home sales was up by eight percent, vacant land by 12 percent and condo sales jumping the most since last year by 15 percent.
Perhaps one of the most staggering figures in the report is the starting point of the year, the number of pending sales leading into 2013. The beginning of the year had a 125 percent increase in pending sales from the year before, meaning January had one of the strongest leads in recent years.
"Prices are still well below the peak, they are just not at the bottom anymore," said PCBR Executive Director Curt Singleton. "So there are still deals to be had."
Deals are harder to find in some areas more than others, though.
"There are certain segments, take for example lower Deer Valley, that are not as strong," said PCBR President Jeff Spencer. "Lower Deer Valley is behind the market in seeing prices rebound, so there are still good deals in that area, both in pricing and available inventory."
"In other areas, inventory levels are decreasing quickly and the products out there are starting to get picked over," Spencer added. "No one is getting a foreclosure with a great view anymore, even if there are a few foreclosures still out there. Buyers are realizing the boat has left the dock, and maybe they have missed it. But they can still catch that wave though, because prices are going to keep going up."
Jeff Spencer takes on new role with organization
Gina Barker, The Park Recordparkrecord.com
Posted: 01/18/2013 04:40:23 PM MST
The Park City Board of Realtors (PCBR) has elected a new round of leadership including a new president, president-elect, secretary, treasurer and two new board members. The newest members of the Board of Directors were officially installed Jan. 10 by Kenny Parcell, past-president of the Utah Association of Realtors.
"This is exciting, stepping into this role,' said the new president, Resort West Realtor Jeff Spencer. "I want to be able to help members in real ways, making this organization even more successful."
Former president Tami Whisker stepped down earlier this month and Spencer took up the reins, continuing the legacy left to him from past presidents, but also hoping to incorporate some of his own ideas in the coming months.
Spencer moved to Park City in 1996, graduating from Utah State University and working for Deer Valley for a year before he became a Realtor. The first home he sold was a sight-unseen to a Kansas buyer, and ever since he has been serving owners of luxury second homes in Deer Valley and Park City.
"As our market firms up, so is our membership," said PCBR Executive Director Curt Singleton, adding that growing the number of Realtors in the organization is a trend he expects to see continue this year.
"We're starting a lot of new projects this year," he added. " We're looking at increasing our offerings to members, especially technologically It is all about our members, about what we can offer."
Since assuming his new role, Spencer has set up a committee specifically to look at membership value and benefits for the organization.
"One of our goals is to find technologies to make life easier, from online forms to e-signatures," Spencer said. "I could show you a property on my iPad from the car, write the offer, sign it and email it to you from one device. It's about simplifying the life of an agent, making their business more efficient. Let's slim down and streamline the process for buyers."
Marcie Davis is the new president-elect, Deb Hartley the new secretary, Nancy Tallman the new treasurer and Marc Coulam and Suzanne Sheridan added as the two new directors.
By Leslie Thatcher on October 24, 2012
Through the third quarter, the Park City real estate market is making slow and steady gains. KPCW’s Leslie Thatcher reports. Click the link for the radio version: http://kpcw.org/2012/10/park-city-real-estate-making-steady-gains/
The housing market in Park City is somewhere between a buyer's and seller's market as home prices and sales continued to find the middle ground in the third quarter of 2012. The total number of property sales was up for 4 percent and total revenue was up 3 percent compared to last year, according to numbers provided by the Park City Board of Realtors.
Median property prices, which include homes, condos and lots, are on the rise, up 11 percent from the year before,
"It's a slow but steady improvement," said Mark Seltenrich, the Park City Board of Realtors Statistician. " The biggest trend is that the really cheap properties, the low-priced condos or low-priced lots, are not there anymore. There aren't as many on the market as last year.
"If you're looking for a condo in a $200,000-range, you are going to have a hard time finding one. And that's because we're moving toward a balanced market."
Seltenrich said the current local trends are on par with national housing market trends, that the local area is recovering with the rest of the nation and neither artificially inflated home prices or bottom-dollar deals are out there.
Vacant land sales, a major piece of the market last year due to bottoming market prices, have increased significantly in median price since last year, up 19 percent. Between the first and third quarters last year, a total of 207 vacant lots were sold, including several in the Promontory area. This year for the same time period, the Park City Board of Realtors recorded 212 sales, and Seltenrich said he expects vacant land prices to continue to rise.
The number of home sales was up 5 percent, selling 32 homes more homes. Condo sales were up even more at 7 percent, selling 451 homes this year compared to 420 over the same time the year before.
Curt Singleton, the Executive Director of the organization, said the numbers gave him a reason to be optimistic.
"I think the numbers are promising, and show that the market is improving," Singleton said. " Outside of the statistics, it appears to me that the general feeling is that our market is on the rebound and we're seeing that in additional members joining the association. More people are getting back into real estate."
"I still think there's room for caution, but the rise in sales and home prices is promising," he added, "but nothing is concrete at this point."
The second highest disclosed home sale in Park City history, an $11M property in Deer Crest, was sold shortly after Sept. 1 when the third quarter ended, so even though the property was not reflected in the most recent housing market statistics, Seltenrich said home sales of that magnitude show market strength.
Distressed properties were also down in the third quarter, accounting for only 14 percent of the market. Last year during the third quarter, distressed sales made up 27 percent of sales, a total of 80 property sales.
While basement prices in the market may be gone, Seltenrich said there are still well-priced properties out there, so even if a condo for $200,000 is gone, the price increase to $250,00 is still a well-priced property.
"Historically, you're still doing pretty well," he said. "Buyers have to shift their thinking and realize that $250,000 is still a good price for the area."
Singleton agreed.
"I think its somewhere in between a buyer's and seller's market, and we've surpassed the best days for a buyer's market," Singleton said, "but the market is still ripe for buyers even if it's not quite what it used to be. The glory days of being a buyer, while still good deals to be had, not quite what it was before, and that shows an overall strengthening of the market."
2012 Sales and Median Prices by Neighborhood:
CLICK HERE to see full article.
"There are many indicators that things are starting to show much better numbers," Yun said, "both economically and in housing."
Perhaps one of the biggest issues areas like Park City will face in the future have less to do with the economy and more to do with government. As a way to raise tax revenue, lawmakers are considering removing tax breaks for those buying a second home.
"The government is considering removing interest reduction for second-home purchases," Yun said. "That would have a very harmful impact for markets like Park City. If that tax benefit is taken away, then it will make it less desirable to buy second home."
With a market so reliant on those buying second homes, Park City and other resort towns would have a lot to lose if such legislation came into effect. If this type of law is adopted, Yun suspected it would be after the elections at the end of this year.
"We work very hard at the state legislature to watch what kinds of bills come up that could cause problems for Realtors," said Park City Board of REALTORS president Tami Whisker. "We're one million strong nationally, and we can take a stand."
Yun said lobbying efforts are already underway.
"We hope it doesn't happen, but it is something Washington is seriously considering," Yun said. "It's coming up, discussion after discussion."
While politics may leave some concern, the economy itself is looking up.
Nationally, home prices are down by 33 percent from peak prices, with most American homes still undervalued in the sale price, he said. Nationwide, investors are picking up real estate at bargain prices, and in doing so breathing some life back into the market. Simply put, it's a buyer's market, but that's not necessarily bad.
The same has been true for Park City. Home prices are down, the number of sales are up.
"I know these numbers," Whisker said. "We've seen the same trends just much softer than other areas of the country."
Yun speculated that a wave of renters may be looking to buy in the near future too. In the past few years more people have opted to rent, move back home or find an extra roommate, but Yun said that option could only go on so long before rent prices start to dramatically increase.
Faced with renting at higher prices or buying at low prices, Yun suspected people would chose to own. He described the renters market as a spring slowly being compressed, and eventually that spring would pop and flood the real estate market with people looking to buy.
The biggest hurdles the housing market faces is building American confidence and getting banks to back home loans at current interest rate levels, Yun said.
Local Realtors agree.
"There's a glimmer of hope," said Park City Realtor of six years, Patrick Giblin, "but I think keeping access to loans available to consumers and buyers and keeping that consumer confidence up is what we need to focus on now."
Click Here to read the story in the Park Record
Though numbers were not as high as the peak in 2005 of more than $2 billion, realtor confidence is growing in Park City. More are ready to believe Park City real estate has reached its bottom and the market is starting to climb its way out from the low point in 2009, where total sales fell to $867,230,118.
"I think this report is good news," said Park City Board of REALTORS president Tami Whisker. "I feel like we're starting to see signs of stabilization in certain areas, which is amazing."
A Buyer's Market
In any market, the buyer or seller is favored more than the other. Park City was no exception. Prices fell for the fourth straight year, leaving many areas of the market an estimated 40 to 45 percent below what prices were at their peak. But falling prices are not all bad, as prices have drawn more first-time buyers into the area.
"The market in recovery, but it keeps improving," said Mark Seltenrich, the Park City Board of REALTORS statistician. "Of course we would like to see homes sell for more, back to kind of numbers we saw a few years ago, but we have a ways to go. It is still a buyer's market."
Whisker said that as the number of properties available shrinks, the supply and demand model will shift the market back into a seller's market.
"I believe it's a good sign that inventory is shrinking," Whisker said. "Financing can still be a challenge but there is a lot of activity I feel confident going into the rest of the ski season that the sales activity will continue."
Number of Sales Up
The number of sales in the Park City area increased by double digits in 2011. Home sales increased by an estimated 19 percent, condo sales increased by 10 percent, and vacant land sales saw the largest increase at 23 percent more in sales from 2010.
The Economic Development Director for Park City Jonathan Weidenhammer said with more homes sold, the city is able to collect property taxes feed into the community.
"The Park City market demonstrates strength and resilience," Weidenhammer said. "These sales help our resort economy, and the real benefit on the city side is what we can collect for property taxes. Those numbers continue to be strong, making up half of our annual budget."
Prices of Sales Down
Several neighborhoods, including areas such as Old Town and Jeremy Ranch, continue to see home values drop, but properties in areas such as Old Ranch Road, Pinebrook and Sun Peak sold well above 2010 market prices.
"With the prices dropping, a lot of people from around the state who couldn't afford to live here before, are able to live here now," Whisker said. "Maybe someone who lived and worked in Salt Lake City moved to Park City because they could afford to."
Median Old Town home prices were down 14 percent, with the median price at $817,500. In Jeremy Ranch, that number was closer to 11 percent, with the median home selling at $624,000.
On the other side of the scale, Sun Peak home sale prices were up 25 percent, Old Ranch Road home sales were up 12 percent and Pinebrook was up by 13 percent.
Foreclosures Down
According to the report, sales of foreclosed properties continued to make up a significant part of the market in 2011, but since 2009 the number of foreclosures continued to decrease. In 2011, foreclosures fell by roughly a third of the number in 2010, totaling half of the foreclosures from the peak in 2009.
"I think we're going to continue to see foreclosures," Whisker said, "but we like to see that they're falling in number. Once we can get rid of the foreclosures on the market, property values will hopefully return back to normal."
Statewide it's Good News
Statewide optimism is growing as well.
And while home values haven't risen to where they were just before the housing bubble burst, that's not the largest indicator that the market is in recovery.
"We're seeing home sales up for the entire state of Utah," said Utah Association of REALTORS Communications Director Deanna Devey. "That's a reflection of the housing market improving as a whole, a reflection of the job market improving and confidence returning. Our home sales ending in 2011 were highest they've been in three years."
Statewide numbers have improved, Devey said. The state increased home sales by 8.6 percent in 2011, with Summit County just surpassing that number. Wasatch County, portions of which were included in the report, had the second highest increase in home sales in Utah.
"In 2003 Utah sold 31,050 homes," Devey said. "This year we did better than we did in 2003. I track these numbers religiously and they've just been getting better and better every month."
The three clearest signs of improvement are changes in single-family home prices and foreclosure rates and a steady decline in inventory.
Single-family homes strong
Single-family home sales are up 24 percent over last year. They accounted for 44 percent of all sales and 55 percent of total dollar volume. The median price for Summit and Wasatch counties is also up one percent, with greater increases in some neighborhoods. On average, houses are also selling at about five percent off the final list price, which is close to the historical norm, the report said.
Foreclosures down
Distressed properties are still driving the average sale price of condominiums and vacant lots down below 2010 levels, but foreclosure sales are now only 27 percent of the total (down from 35 percent one year ago) and the properties only represent seven percent of all those on the market, the report said.
Inventory down
There are now about 2,700 units on the market. That inventory level is below the 3,060 in 2010. Brisk sales, if continued, are predicted to improve that further.
However, when comparing the second quarter of 2011 with that of 2010,
Low prices caused by the distressed properties on the market are still resulting in a high number of transactions. The period examined in the report saw the greatest number of sales since the fourth quarter of 2007.
That's good for buyers, Realtors and people needing to sell. The number of sales overall is up 24 percent over last year. Condominium sales are up eight percent and lot sales are up 55 percent.
Condo sales prices are down from a year ago. They have fallen 32 percent in the Canyons area and 23 percent at Kimball Junction. Condo prices are actually up in certain neighborhoods, but the average sales price is down for the entire area.
Vacant lots selling
Vacant-lot sales were the slowest, weakest part of the market during much of the recession. With prices down, buyers are perceiving bargains, the report said. Promontory alone accounted for 42 percent of all lots sold, the remainder being scattered throughout the area. Promontory prices now are actually on the rise, suggesting prices have "bottomed out" there, the report said.
Reason for optimism
Perhaps the most optimistic data in the report came from comparing the second quarter of 2011 to the first. While not much has changed since 2010, there is significant improvement since the beginning of the year, especially in the average sale price of single-family homes.
Mark Seltenrich, one of the report's authors, said single-family homes have always been the strongest segment in the market. In part, that's because Park City continues to attract people who want to make it their primary residence.
The profile of primary residence shoppers is very similar to vacation home shoppers, said broker Jess Reid.
And affordability is "off-the-charts good," said Prudential head Steve Roney.
Low prices have spurred activity and, as inventory goes down, the area is beginning to experience the results of decreased supply and increased demand, Roney added.
Foreclosures still a factor
Wells Fargo mortgage broker Rick Klein said fewer single-family homes are in distressed sales - 23.5 percent of homes for sale versus over 29 percent of condos for sale. Klein added that there's an old adage that condos "are the first to fall and the last to rise," although he isn't sure why that is.
Seltenrich said Canyons and Kimball Junction condos have likely been so hard hit because they were the last be built before the recession and were bought at the peak of the market. Those condos finished since the start of the economic downturn appear to be faring better, he said.
Klein said over half of the condo sales in lower Deer Valley, Canyons area and Kimball Junction were distressed.
He also predicted it will be another six to nine months before distressed sales stop impacting market prices.
Lending up
Seltenrich, Reid, Roney and Klein all agree bank financing for qualified buyers is getting easier, but about half of all transactions are still paid with cash.
That was common before the recession as well, Roney said.
The best news to come out of all of this, Roney added, is that buyers have recognized the market's bottom has been hit and they're now off the fence. The results of this are beginning to be seen.
"The evidence with lot sales is really, really good; it means recovery. It means people are thinking about building," he said. "You only think of building when you can't find what you want in the inventory, or if you're a speculative home builder and think there's not enough inventory."
Recovery slow, but steady
Seltenrich and Reid don't disagree, but believe a full recovery is months away.
"Consumer confidence is still way below where we were several years back," Seltenrich said. "With real estate, I don't see a quick increase in prices or sales volumes."
"It's soft and going frustratingly slow," Reid said. "The Board's report is certainly a legitimate positive spin but we're in a soft recovery for a couple of years."
Reid said the recovery is "looking good, but not feeling so good." But that is how most Park City businesses are feeling, he added.
The quarterly reports used to include a breakdown of average sale prices for each neighborhood. With so many factors impacting each development, averages would not be helpful, the report said. People are encouraged to contact a local Realtor for an opinion on a particular property or neighborhood.
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.
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.
"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
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