Park City & Deer Valley

Other Western Mountain Ski Resorts are Experiencing a Market Similar to Ours

Representatives from the Park City Board of REALTORS® attended the annual winter meeting of the Western Mountain Resort Alliance (WMRA) in January which was held in VAile Colorado. The meeting, as always, was interesting and informative. The main take-away from the meeting is that other Western Mountain Ski Resorts are experiencing a market similar to what we are experiencing in Park City. Other than Whistler, all resorts reported an increase in the number of sales in 2010 compared to the number of sales in 2009. In general, this corresponded to an increase in dollar volume (Summit County Colorado was flat) but the percentage increase in number of sales surpassed the percentage increase in dollar volume, meaning that average prices were lower. The two exceptions for this were Whistler and Vail, where average prices actually increased. However, Vail's increase was from the closing of a number of new high-end developments where the units were contracted in the better markets of 2006 thru early 2008, and finally closed last year.

2011 WMRA Winter Meeting in Vail, Colorado

#1 Compare 2010 Sales to 2009 Sales:

Tahoe/Truckee Up 28% in dollar volume and up 33% in number of transactions

Sun Valley** Up 20% in dollar volume and up 24% in number of transactions

Park City** Up 16% in dollar volume and up 26% in number of transactions

Whistler** Up 6% in dollar volume and up 6% in number of transactions

McCall** Up 3% in dollar volume and up 24% in number of transactions

Big Sky Up 21% in dollar volume and up 42% in number of transactions

Crested Butte Down 5% in dollar volume and up 7.5% in number of transactions

Summit County, CO Flat in dollar volume and up 6% in number of transactions

Vail Up 67% in dollar volume and up 33% in number of transactions

Steamboat Up 17% in dollar volume and up 18% in number of transactions

(**) Disclosure: Undisclosed sales are reported at 95% of list price

#2 Distressed Sales in 2010 vs 2009:

Tahoe/Truckee Number increased in 2010: 27% of all Single Family Home sales distressed, 36% of all condo sales distressed

Sun Valley 30+% in Haiely and Belleview, 5% or less in Sun Valley and Ketchum

Park City Numbers increased in 2010: Approximately 30+% of all sales distressed in 2010

Whistler Numbers increased in 2010: Although still only about 5% of the market

McCall Nearly half of all transactions (48%) were of distressed properties

Big Sky 15% of 2010 transactions were of distressed properties. Cannot compare to 2009 due to lack of data available

Crested Butte Numbers increased in 2010: With about 25% of all sales being of distressed properties (mostly foreclosures with just a few short sales)

Summit County, CO Numbers increased for 2010 but percentage of sales not indicated

Vail Numbers increased in 2010 but percentages of sales not indicated

Steamboat 22% of transactions in 2010 were of distressed properties, numbers not tracked in 2009 for comparison

#3 Prices Stable, Declining, Increasing:

Tahoe/Truckee Prices declining: Median price down 12% comparing 2010 to 2009

Sun Valley 2010 saw prices declining although signs there may be stabilization in certain areas

Park City Prices declining: Median price down 2.9% comparing 2010 to 2009. Signs are that some areas and some markets may be stabilizing or even increasing

Whistler Prices increasing with average price up 13% in 2010 compared to 2009

McCall Prices appear to be stabilizing

Big Sky Prices still declining although perhaps approaching bottom

Crested Butte Prices still declining

Vail Prices still declining slightly

Steamboat Prices declined 1% per month per 2010. Prices still declining with prices being driven by distressed properties

For More Information on Park City and Deer Valley Contact:
Michael LaPay, Associate Broker
Prudential Utah Real Estate
Mobile: 435-640-5700
Toll Free: 888-410-7653

mlapay@pureparkcityrealestate.com

How Does Our Local Market Compare with

What's Happening Nationally?

Looking at the country as a whole, the economy grew 2.6% in the third quarter of 2010 and 3.2% in the final quarter of the year, the highest rate since the prerecession peak at the end of 2007. Statistically speaking, the US economy is now back to 2007 levels of growth.

National Association of Realtors® (NAR) reported a 1.2% increase nationally in the number of sales in existing homes at the end of 2010. In the greater Park City area (local areas 1-23), the number of sales of existing homes in 2010 rose 34% over 2009 and 17% over 2008. The data indicates a greater stability in the local Park City market, as well as a swifter recovery than is happening on a national scale.

Also referring to national-level statistics, NAR reported December 2010 as the fifth month of improvement in pending home sales in the previous six months. "Pended sales are a forward-looking indicator of demand," explains Rick Klein, a Park City-based lender with Wells Fargo. "These figures can give us a very good picture of what's to come." In the greater Park City area, 2010 pended sales volume rose 40% from 2009 and 44% from 2008. "Clearly, there is a lot of movement in the local market," says Klein.

*All statistics and graphs from Rick Klein, Wells Fargo / 435-647-9055

Greater Park City Barameter Annual

Pended & Closed Sales

For More Information on Park City and Deer Valley Contact:
Michael LaPay, Associate Broker
Prudential Utah Real Estate
Mobile: 435-640-5700
Toll Free: 888-410-7653

mlapay@pureparkcityrealestate.com

2010 A Year in Review A Year in Review

The Park City market is not on the move. Now that 2010 has drawn to a close, statistics show an upward trend across the board for almost all property types. In fact, real estate sales surpassed the billion dollar mark, marking 2010 as one of only six years where the local market hit that benchmark. "Buyer's are recognizing value, which is creating a flurry of activity and an increase in the number of units sold." says president of the Park City Board of Realtors®. Here's how 2010 stacks up in terms of sales volume:

2010 Sales Volume

(Park City MLS figures)

• Sales dollar volume totaled at $1,009,582,720 up 16% from 2009

• 1,421 total closed sales, up 25% from 2009 and 6% from 2008

• Vacant Land units sold up 60% from 2009

• Single Family Home units up over 26% from 2009

The National Association of Realtors® reported a regional drop of 1.5% in sales volume of existing homes in 2010, further evidence that Park City's market continues to outpace the West and the nation as a whole. At the same time, Park City has seen almost no uptick in real estate prices, except in the case of single family homes, which increased 3.5% over 2009. On the whole, though, the Park City market saw median prices fall 3% off last years.

Of course, the question on everyone's mind is have we hit bottom? "This question is actually a complex one," says the 2010 president of the Park City Board of Realtors®. The following "peak to trough" statistics compare the highest market peaks of the past with the more recent market lows to try to answer this universal query.

Peak to Trough Median Pricing

With the exception of vacant land, which has experienced a strong price correction, the average drop in price was 28%, far less than most markets across the country. "The thinking is that our market hits its low point in terms of sales volume nearly two years ago, and we believe we have not hit our bottom in terms of prices," explains former president of the Park City Board of Realtors®. "This is a great time to buy; prices will begin to climb again."

"This is a great time

to buy; prices will

begin to climb again."

For More Information on Park City and Deer Valley Contact:
Michael LaPay, Associate Broker
Prudential Utah Real Estate
Mobile: 435-640-5700
Toll Free: 888-410-7653

mlapay@pureparkcityrealestate.com

Despite Troubling Stats, Park City Real Estate Remains Highly Desirable

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.

by Andrew Kirk OF THE RECORD STAFF : The Park Record

For More Information on Park City and Deer Valley Contact:
Michael Lapay
Prudential Utah Real Estate
Mobile: 435-640-5700
Toll Free: 888-410-7653

mlapay@pureparkcityrealestate.com

Half of West Side Sales in 3rd Quarter were with Cash

The Park City housing market is thawing and unit sales are up from last year, yet it's still hard to get a loan. Experts say this apparent paradox is partly explained by an increase in cash purchases.

Luxury real estate attracts affluent buyers so cash purchases have always been common in Park City, but according to data compiled Rick Klein at Wells Fargo Home Mortgage, the percentage of property bought with cash is way up.

According to the National Association of Realtors, 29 percent of real estate nationally in September was paid for with cash. On the West Side of Summit County, 50 percent was. About 35 percent of single-family homes, over 50 percent of condominiums and nearly 80 percent of land sales were paid for with cash in the 3rd quarter.

For perspective, Klein compares that to the same period in 2007. In three years, that's a 65-percent increase for homes, double for condos and up 150 percent for land.

These buyers tend to be a mixture of investors and people unwilling to subject themselves to the lengthy and rigorous lending process banks have developed. And sometimes those are the same people, he added.

These cash purchases are usually for distressed properties, which continue to threaten the health of the market, but their number is declining, Klein said.

"Is it elevated? Yes. Is it also coming down? Yes," he said.

About one-third of purchases in today's market are of distressed real estate, but the flip side of that coin is two-thirds are normal sales, he said.

The increase of cash sales is having an interesting effect on local mortgage brokers, he said. It's a sign of recovery, but it doesn't help people in his business.

The uptick in sales means buyers are recognizing the bounce off the bottom has occurred and prices will begin rising. But with half the transactions being done with cash, there must be an even larger number of people who would like to buy now but can't get the financing.

"There have been 344 credit policy changes," Klein said.

He was recently asked to talk about "changes in the industry." Klein said that's like asking Jonah how he liked his cruise.

This is hurting first-time home buyers the most, he said. With tougher scrutiny of credit, many American families are failing to convince lenders they're ready for home ownership. That's hard to regular people, mortgage brokers, Realtors and home builders.

If a breadwinner was unemployed for several months in this economy, some lenders are asking to see proof of new employment for six months before they'll consider lending. It's hitting people who are already down, he said.

The irony is that the trend is still moving the market in a positive direction.

Mortgage agent Lisa Lundquist with Axiom Financial's Park City office said any movement in the market is a good thing. People are putting cash into real estate instead of the stock market and that will help her in the long run.

Rich Sonntag, managing director of the Promontory Club, agrees.

With roughly 80 percent of the most recent land purchases made in cash, Sonntag said buyers are broadcasting a message that it's time to get off the fence.

Sure a lot of people are being left out in the cold right now, but as these cash buyers snatch up real estate they are stabilizing pricing. As lenders become more confident about their appraisals, they'll loosen lending restrictions and allow more people into the game, he said.

He also agreed with Lundquist about investing. Gold promoters describe the precious metal as a hedge against inflation, but so many people have bought recently that gold is experiencing a bubble. Real estate is the best hedge against inflation, Sonntag said.

Right now it's the smart money that's buying, he said, and that will have short-term and long-term benefits. Cash buyers are purchasing what they are most confident about reselling as soon as lending restrictions loosen, he said.

They are improving the market and will profit when it is better, he added.

"It's the best support for next year's market," Sonntag said.

by Andrew Kirk OF THE RECORD STAFF : The Park Record

For More Information on Park City and Deer Valley Homes Contact:
Michael Lapay
Prudential Utah Real Estate
Mobile: 435-640-5700
Toll Free: 888-410-7653

mlapay@pureparkcityrealestate.com