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Economist breaks down housing market for Park City

By Park City Board of REALTORS
Feb 17, 2012

Economic outlook good, weary of political tax efforts
Posted:   02/17/2012 04:48:31 PM MST
 
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Chief Economist of the National Association of REALTORS Lawrence Yun addresses the Park City...
Chief Economist of the National Association of REALTORS Lawrence Yun came with facts and figures in hand to speak to the Park City Board of REALTORS about the national housing market Thursday. His assessment was a positive one: trends show the housing market is headed toward stabilization.

"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

2011 PCBR Final Statistics

By Park City Board of REALTORS
Feb 14, 2012

PRESS RELEASE

FOR IMMEDIATE RELEASE: February 1, 2012

For further information:

Mark Seltenrich Statistician 435-901-1561 mark@markinparkcity.com

Tami Whisker President 435-640-2777 twhisker@pru-utah.com

Jeff Spencer President Elect 435-640-4770 jeff@resortswest.com

 

Park City, Utah – Real estate sales in Park City surpassed the billion dollar mark for the seventh time in 2011. Year-end statistics from the Park City Board of REALTORS® show an overall sales dollar volume of $1,077,426,368, up 6% from $1,013,432,555 for 2010. The number of sales continue to trend upward with 1,662 closed sales for 2011, up 17% from the 1,418 closed sales in 2010 and up 32% from the 1,131 sales in 2009.

Inventory levels have decreased since last year, with about 2,300 properties listed for sale compared to about 2,750 in 2010, a 13% decrease.  Sales activity remains strong, which can be attributed to the reduced home, condominium and vacant land prices and the positive economic conditions in the state of Utah.  For the Park City area, tourism, resort industries and a nationally ranked public school district continue to draw both primary and secondary home buyers.

It was predicted that 2011 would look much like 2010, and that turned out to be true.  Just as in 2010, in 2011 the number of sales was up while prices continued to decline.  The exception to this is that prices in some neighborhoods and some property types seem to have stabilized. Prices have declined in many areas and property types with the following exceptions: home prices overall and particularly in the Snyderville Basin were either flat or saw an increase, while vacant land prices in the Snyderville Basin and in the Heber Valley were either flat or have increased. “The market continues to be active, with the number of sales in all four quarters of 2011 being strong, with the second quarter of 2011 having the most sales that we’ve seen since the fourth quarter of 2007,” says Mark Seltenrich, Statistician and Past President of the Park City Board of REALTORS®.

Prices Median sold prices in 2011 were down 13% for our overall market, although single family homes continue to be the strongest part of our market with a 1% increase.  Condo median prices were down 16% and vacant lot median prices were down 13%.  While the percentages improved in the second and third quarters, they are still well below where they were predicted to be at the beginning of the year.

Number of Sales The number of closed sales in the Park City area in 2011 was up substantially over 2010. Home sales increased by 19%, condo sales were up 10% and vacant land sales were up 23% in 2011 compared to 2010.  Just as had been noted throughout the year, the number of overall sales and home prices in particular are the two bright spots in our market.

Single-Family Homes Home prices may be stabilizing. Although certain neighborhoods are still seeing declining prices, other neighborhoods are experiencing increased prices. This is similar to the national trend where the year end statistics showed three straight months of improved sales and is characterized by the National Association of REALTORS® as a “market in recovery.”

In reviewing the data for individual neighborhoods, some areas are certainly doing better than others.  Median home prices in Old Town are down 14% to about $817,500 while median home prices in Park Meadows are down 7% to an even $1,000,000.  Median home prices are also down 2% to about $609,000 in the Silver Springs area.  However median home prices in the Sun Peak area are up 25% to a median price of $872,500, up 12% in the Old Ranch Road area to a median price of $1,500,000 and up 13% in Pinebrook to a median price of about $642,500.  Conversely, median prices in Jeremy Ranch are down 11% at $624,000.

Condos Median condo prices inside the city limits are down about 28% from a year ago to a median price of $539,500, while median prices in the Snyderville Basin area are down about 15% to a median price of about $260,000.  However, there are some areas where median condo prices have increased, including Empire Pass (up 25%), the Prospector area (up 12%) and Sun Peak (up 4%).

Vacant Land Median lot prices were down about 18% inside the city limits, and were flat in the Snyderville Basin (exactly the same at a median price of $160,000).   However, just as with home and condo prices, certain neighborhoods did post median price gains, including Promontory (up 7%) and Summit Park (up 59%).  The Promontory area had by far the highest number of sales in an individual area, accounting for over half of all lot sales in the Snyderville Basin area.

Foreclosures As in 2010, foreclosures continued to be a significant part of our market in 2011.  As reported previously, the number of Notices of Default (NOD’s) in Summit County peaked in the third quarter of 2009 and has been falling since.  In fact, the number of NOD’s in 2011 was about half of what it was in 2009, and about one-third fewer than in 2010.  The number of Trustee’s Sales (foreclosures) peaked in the fourth quarter of 2009 and has also been generally falling since.  The total number of foreclosures was down in 2011 about 25% from the higher numbers seen in 2009 and 2010.  “The numbers are still historically high, but it is a positive sign that those numbers are decreasing,” says Seltenrich. As for actual sales of distressed properties in our market, about 30% of all sales were distressed, a high number but down from 2010.   Distressed sales still make up about 7% of all properties on the market.

The number of Wasatch County foreclosures is declining but the number of NOD’s remained elevated throughout 2011.  So even though there were fewer foreclosures in Wasatch County in 2011 than 2009 and 2010, the number of foreclosures is likely to increase in 2012 compared to 2011.

Looking Ahead Prices in our market have, in general, been falling for four straight years, with many parts of our market being 40-45% below where those prices were at the peak.  Similarly to how many erroneously thought in the mid-2000’s that prices would keep rising “forever,” it is just as erroneous to assume that prices will keep falling as they have over the past four years.  It appears that prices have now corrected in virtually all parts of our market, and although price increases will probably be slow, future sizable declines seem unlikely.  It continues to be a buyer’s market, but choices are declining as the distressed properties are being purged from the market.

The bottom for home prices has probably already past, and that may be true of lot prices as well.  Condos are probably nearing their low point or will reach that point in 2012.  There continues to be strong buyer interest and activity, and hopefully the number of sales will be similar in 2012 to what they were in 2011.  Properly priced properties will continue to sell, while properties that are priced too high will languish. Seltenrich advises, “With different neighborhoods responding differently to the current market, it continues to be very important to consult with your local REALTOR® to understand what the market is doing in your area.”

The Park City Board of REALTORS® (PCBR) is a trade association of nearly 900 members comprised of REALTORS® and Affiliates from the greater Park City real estate industry.  PCBR analyzes and reports on real estate trends for the greater resort community of Park City.

Real estate market rebounding

By Park City Board of REALTORS
Feb 14, 2012

Report analyzes ups and down of 2011

Posted:   02/07/2012 05:01:45 PM MST
The Park City Board of REALTORS shut the book on the 2011 real estate market, releasing their annual report on last year's number of sales, sales prices and number of foreclosures. 2011 sales increased by a total of six percent from the year before pulling in a total of $1,077,426,368, making it the seventh year real estate sales exceeded the one billion dollar mark.

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."

Link to this article in The Park Record