The View From Here - A Value Market
The Park City real estate market offers good value right now.
They are about as LOW as they will get for quite a while. We used to say anything below 10 percent would be great and now they are roughly half that. Rates will increase gradually, so now is the time to strike. A one percent increase in interest = ten percent increase in home price.
We are literally seeing no new planned construction over the next several years, except what is already in play now. The current supply of homes for sale will get absorbed, so the value of homes will go up over time, especially in a resort market. Low home inventory = scarcity and thus property values go up.
They are down, below replacement cost, so sellers/lenders/developers are more motivated to sell than ever. We may have little spikes up and down in the short-term future, but we know that we’re at the low end of the bell curve right now. Prices will correct upward. The key is inventory scarcity and eventual economic improvement.
The national economy has created low prices, lower inventories, low interest rates, and sellers more motivated than ever. We may still see a “W” curve (up and down like a roller coaster) or an “L” curve (flat) for a while, but we firmly believe that we’ll see gradual improvement over the next year or two. Our local resort economy is unique for its proximity to a major airport, three top ranked ski resorts and limited housing supply. Our resort market has historically been the last to come down and the first to go up.
Today’s sellers want debt relief and non-performing loans off their backs. They are more realistic than ever right now. We always say that sellers are the last to lower prices and the first to raise prices, but timing is everything — and the timing looks good right now.
Some loans are available, but it’s not like what it used to be. Will it improve over time? Yes. If you need a loan, then wait or ask the seller/developer to help — they just might.
STABILITY OF DEVELOPERS/PARK CITY, UTAH:
Despite the poor national economy, the financial strength of Park City and Utah in general is the same. Deer Valley and Park City resorts are both privately held, strong-going resorts and will be for years to come. We’re still one of the best destination ski resorts in the country within 35 minutes of an international airport and the lifestyle here attracts buyers from all over the country. We have less risk, more stability and more value than most resort towns. Recognition of the value we offer is key.
Combining today’s level of seller motivation with low interest rates, reduced pricing, minimal inventory growth and an overall soft economy, the value market is here at least for now. Take advantage!