The State of Park City's Real Estate Market
People are falling in love again with Park City,” is how one veteran real estate salesman describes Park City’s currently booming real estate market.
There’s no denying that after languishing for most of the past four years, property is moving quickly again as the 2004/2005 winter skiing and selling season begins. “There’s been a complete resurgence in the market,” reports Seaton Prince, the immediate past president of the Park City Board of Realtors and an agent for Lewis, Wolcott and Dornbush. “Good snow this winter will make it all the better.”
With the Salt Lake Olympics now solidly in the rearview mirror, the “Olympic effect” has passed the Park City market. Before the Games, investors swooped in to buy property to hold until all the world attention produced interest in Park City’s homes and condominiums. The investment frenzy sent prices to unrealistic highs, and drove away buyers, resulting in excess properties for sale, and buyers too smart to bite on them.
“Buyers are still tough when they look at property,” reports veteran sales agent Randy Spagnoletti of Prudential Utah Real Estate. “Regardless of the market, buyers think that a property is worth 10 percent below what it’s selling for, and sellers think it’s worth 10 percent more than it is, so they’re 20 percent apart to start with,” he says, adding that the Olympic afterglow did nothing to change that reality.
For the past few years, the result has been an excess of inventory; homes and condos being on the market for longer periods; and flat prices. The 2004/2005 period is bringing an end to the four-year Olympic lull.
“People who’ve been on the fence for a while are now saying, ‘It’s my time,’” says 27-year veteran agent Jim Lea, also with Prudential. “People who’ve been coming back and coming back and thinking about a purchase are now making them. They’re ready to change their lifestyles and many find they can now work anywhere.”
Jess Reid, president and principal broker of Jess Reid Real Estate agrees. “People have been sitting on the fence and their confidence has been hurting for several years now between 9-11, terrorism, war, the stock market and the economy. Now they’re saying, that they feel more confident where we are,” and that is translating into more buyers taking the Park City plunge.
So with the economy improving, consumer confidence back and interest rates low, what’s selling?
“We’re seeing multiple offers now on reasonably priced properties,” reports Reid. “Buyers are looking for homes and condominiums priced at $1.5 million and below.” The multi-million dollar homes are still in oversupply. They’ll be slower to come around.”
But under that lofty $1.5-million ceiling, both homes and condominiums are once again hot. “We’re running out of condos under $500,000,” Lea says. As for houses, Prince reports exuberantly, “Six-hundred-thousand dollar homes are blowing off the shelves! Properties that have been dormant for four years are suddenly getting multiple offers.”
The market is equally strong within Park City limits and in the Snyderville Basin. Lots in town are nearly gone, and some established subdivisions like Jeremy Ranch also have few empty lots for those looking to build their dream homes. That’s leaving buyers who want newly built housing looking in new projects such as Bear Hollow Village, Redstone, and New Park, all located near Kimball Junction. While out-of-town buyers looking for vacation property used to stick within city limits, they’re now snapping up many of the new Kimball Junction area condos as well. They’ve learned that new public transit service extensions will let them live out of town and still hop a bus to the resorts and Main Street attractions.
With all this renewed vibrancy, prices are again rising. Board of Realtors statistics for the first half of 2004 showed an overall 23 percent increase in prices, but in a small market like Park City, a few high-end sales can skew statistics. The figures show little price appreciation in the higher-priced and slower-moving $2-million-and-up homes, but higher appreciation in neighborhoods like Old Town, Park Meadows, and lower Deer Valley.
“Prices haven’t moved much for four years and people are deciding that the prices out there now are pretty good,” Prince observes. It is the phenomenon everyone who’s ever seen a supply and demand curve in an economics class knows — as the supply dwindles, the prices go up.
A few new trends are also making themselves felt in the area. In its past 40 years as a destination resort, the attraction has always been winter skiing. Now Park City is becoming a destination golf resort as well. Glenwild, Promontory, and Tuhaye are clustering high-end homes around signature golf courses designed by the likes of Jack Nicklaus, Pete Dye, and Mark O’Meara. These properties are attracting a new buyer to the market, one who wants a fine home on a golf course in a gated community, yet who may or may not be interested in winter skiing. “This is a very good trend,” Reid observes. “It’s bringing in a whole different kind of buyer.”
Also, the development of the Flagstaff and Empire Pass area between Deer Valley and Park City is just beginning, with luxury condominium construction near the Northside Lift at Deer Valley. Within a few years, realtors predict sales volume in Flagstaff alone could reach $1 billion a year!
Times are good now for both buyers and sellers. The buyer’s market of the oversupplied recent past is coming into balance with what’s available. And Park City real estate is still under-priced compared to many other major western resort towns. Buyers are realizing prices are beginning to move and acting. Sellers are seeing their property move again and even enjoying increases in pricing. Supply and demand. Economics 101. And instead of an “A” on the report card, the buyer gets a nice home in a nice town, and the seller gets a nice check!
Park City-based writer Larry Warren writes frequently on growth, planning and real estate issues in Utah and the West.