Park City & Deer Valley

Strong September puts Park City on Track to Hit $1 Billion in Sales!

The 3rd Quarter Report from the Park City Board of Realtors reveals the local market "continues to bump along the same bottom," but evidence of recovery is strong, said President Mark Seltenrich.

Since the economic downturn began, local real estate experts have said prices must come down to thaw the market. The 2nd Quarter Report suggested that was happening, and it was working.

This quarter, evidence of the trend can be seen in every part of the Wasatch Back in all property types. In some like single-family homes the prices appear to have bottomed out with sales continuing, suggesting the market has stabilized, he said.

Although September is not traditionally a strong month here, it ended up being one of the best months of the year, said a press release.

Perhaps the best bit of news for the local real estate community is that the year is on track to hit $1 billion in sales again. According to a press release, that would make 2010 one of only six years the local market reached that mark.

Lowering prices to increase sales volume may sound like good news for Realtors, bad news for sellers, but Seltenrich disagrees. It's bad when prices are lowered but no one buys. The enthusiastic reaction to lower prices in Park City bodes well for the community, he said.

Low-priced inventory is getting snatched up, thereby creating scarcity that will raise prices again. There are many developers ready to build as soon as the economy improves, Seltenrich acknowledged, but the days are gone of developers "flooding" the market. He expects neighborhoods to be built two or three homes at a time a "trickle" into the larger market.

And developers ready to build again have lots far from Old Town. There will always be high demand for homes, condos and land within Park City limits. More building in the county can only be good for Park City because the construction will create jobs and support local businesses.

"It's an important part of our economy here that has been hurt a lot. Slow growth would be good," he said.

When discussing real estate trends, the elephant in the room is foreclosures. Although the job market is improving, people are still losing homes. In this area, Seltenrich said many people with second or third homes "under water" on the mortgage are walking away from them.

That has given Summit and Wasatch Counties the highest percentage of distressed properties in the state, according to data collected by RealtyTrac.com. In Midway, it is estimated that one in 18 homes is behind on mortgage payments.

Seltenrich acknowledges that foreclosures or bank-sold properties are accounting for over one-third of the current market. His crystal ball gives him reason for hope, however.

When an owner falls too far behind on payments, the bank registers a Notice of Default with the Recorder's Office in Summit or Wasatch counties. tracking the number of new notices and the number that actually result in a Trustee's Sale, Seltenrich said it's possible to estimate whether the situation is improving or worsening.

Both the number of notices and sales peaked in 2009, and the number of notices is decreasing, he said.

The problem, he said, is that it will still be some time before someone who bought between 2005 and 2007 will be able to recoup what they paid.

If they're able to be patient for a few more years, there are many signs of market improvement, he added. Overall sales dollar volume is up 37 percent from the same time last year. The number of sales is up 39 percent from a year ago. Vacant land sales are up 71 percent.

Fractional ownerships are now the weakest part of the market. That's likely because people who before were only able to buy Park City property with a fractional can now afford a condominium, he said. Likely for the same reason, condominium sales have been weak in the Snyderville Basin area.

The strongest segment in the market is single-family homes. In both counties, median price averages actually increased three percent. The numbers are less rosy by neighborhood. In Park City, median sale price was 39 percent less. In the Heber Valley it was 16 percent less.

Median sale prices for land had to come down 37 percent to achieve that 71 percent increase in number of sales.

"Some people are definitely taking a loss," Seltenrich said.

But he points at the silver lining: The median average sales price for all types of properties combined was only down one percent.

Condominium sales are up 46 percent overall. Twice as many condominiums were sold in Park City the first three quarters of the year compared to 2009.

Seltenrich said auctions only account for less than 10 percent of those sales. He believes shoppers have realized the bottom has been reached and they're buying before prices rise again.

"With land down in price 37 percent many buyers aren't even sure what they'll do with it, they're just deciding these prices won't last long," he said.

Looking forward, Seltenrich said a few things have been made clear in the recession. One is that Park City is a highly desirable place to live or own property. The market is cyclical, and more downturns will come, "but we'll bounce back because people want to be here," he said.

For a comparison, the Telluride Realtors Association reported a 33 percent increase in number of sales for all properties. But that was only 272 compared to 1,063 in the Park City area. The cumulative dollar volume sold for all property types more than doubled.

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