Park City Board of Realtors End of 2015 Stats are in!

The Park City Board of REALTORS® has released its official year-end statistics. I think you’ll find the official press release (below) quite interesting. The biggest trend I see is the lack of single family home inventory priced at under $1 million. The market continues to vary based on neighborhood, with low inventory and prices creeping up just about everywhere. Let me know if you would like the data for your neighborhood.

2015 Park City Official Stats

Summit and Wasatch County property prices rise at a steady market pace in 2015

At the end of the fourth quarter of 2015, the year-end statistics reported by the Park City Board of REALTORS® indicated a slow but consistent annual increase in both the number of closed sales and the median sales price for single family homes, condominiums and vacant lots in Summit and Wasatch Counties. The total dollar volume for 2015 was up 10% over 2014, reaching $1.85 billion, with single family homes sales accounting for the highest dollar volume by property type.

Single Family Home Sales

Within the City Limits (84060), the median sales price of a single family home was 17% higher than the year before, reaching almost $1.52 million, but the number of closed sales decreased by 12%. By neighborhood, Old Town had the highest number of closed sales with a total of 52 with a 6% increase in median sales price to $1.31 million. Thaynes Canyon had the highest jump in median sales price – up 46% from 2014 to $1.82 million with a total of 11 closed sales for the year. Park Meadows had seven fewer sales than last year but the median sales price was up 11% to $1.44 million. In Prospector, the median sales price increased 6% to $740,000, but there were only 11 closed sales for the year (down 39%), which demonstrates how low inventory of active listings can affect the number of sales in certain neighborhoods.  “Higher median prices of homes within City Limits and lower number of unit sales is reflective of demand outpacing inventory. In this case a decrease of home sales from the previous year is not a sign of a weakening market. In our current cycle, single family homes listed for less than the median sales price are in very short supply,” said the President of the Park City Board of REALTORS®.

Within the Snyderville Basin (84098), there were seven more home sales at year-end than 2014’s number, with an 18% jump in median sales price reaching $912,500. The median sales price shot up 23% in Jeremy Ranch to $874,000 and was up 25 % in Silver Springs to $960,000, though both neighborhoods were slightly down in the number of sales. The highest increases in the number of sales occurred in Glenwild / Silver Creek (up 77% with 39 sales), Pinebrook (up 30% with 48 sales), and Jordanelle (up 85% with 37 sales).  With new construction in Promontory, there continued to be an upward trend in the number of sales, ending the year at 60, with a median sales price of $1.67 million, as well as, in the Jordanelle area, with 37 total sales – up 85% from last year, and a median price of $900,000.

According to the Statistics Chair for the Park City Board of REALTORS®, “In and around the Jordanelle Reservoir we are seeing increased interest from both primary and secondary home buyers. There were 135 condo sales in Jordanelle at an affordable median price of $375,000, and 37 home sales at a median price of $900,000. Contrast that with the rest of Wasatch County ending the year with only 25 condo sales, but 241 single family home sales with an 8% increase in the median sales price to $369,000. We are definitely seeing a dual market then in Wasatch County, with the focus on the Jordanelle area for the newer condos.” In the Kamas Valley, there was a 10% increase in the number of sales with a 4% increase in median sales price to $310,500.

Condominium Sales

Within Park City Limits, the number of condominium sales was down 13% from 2014 but up 11% in median sales price reaching $605,000. Neighborhoods with increased closed sales include Lower Deer Valley Resort (up 25%), Upper Deer Valley Resort (up 23%), and Prospector (up 38%). The median sales price for a condo was up 9% in Lower Deer Valley to $780,000, down 35% in Upper Deer Valley to $995,000, down 24% in Park Meadows to $585,000, up 15% in Old Town to $450,000, and up 27% in Prospector to $155,000. “Once again we see the relative affordability in surprise sectors within Park City. The 55 condo sales in Prospector saw a remarkable $155,000 median sales price. Old Town and the base of Park City Mountain saw 108 condo sales at a median price of $449,000,” the Statistics Chair added.

The overall Snyderville Basin condo market was up 35% in the number of sales with a total of 361 sales, or one a day, at a median price of $400,000. The strongest condo market was at Kimball Junction and Jordanelle which each averaged a sale every two and a half days with 135 units sold at the median sales price of $375,000. The quantity of units sold in the Sun Peak/ Bear Hollow neighborhood was 71% higher in 2015 than 2014 with a median sales price of $394,000. Jeremy Ranch was up 36% in the number of sales and 15% in median price to $574,000. At the Canyons, the median sales price of $401,000 and 84 closed sales were both flat compared to last year’s number.

Vacant Land Sales

Vacant Land sales account for the smallest volume of the market by property type, though for the total market area, the quantity of lots sold was 9% higher than last year; median sales price was 13% up, and total dollar volume was 8% up. Within the City Limits, there were 13 fewer land sales than last year, a 33% decrease, but the median sales price was up a solid 18% reaching $677, 000. The median price for a lot in Park Meadows was up 19% to $970,000, and in Old Town it was up 35% to $575,000.

In the Snyderville Basin, there were 170 lots sold, which is the exact same number as 2014. The Glenwild / Silver Creek area saw increased activity with 42 units sold and a 19% median sales price increase to $443,000. The two neighborhoods with the highest number of vacant land sales were Promontory up 31% to last year with a total of 72 units sold and a median sales price of $305,000, and Jordanelle up 92% with a total of 69 lots sales and a median price of $250,000. Though the number of sold lots dipped slightly in both the Heber and Kamas Valleys, the median sales price increased 15% in both areas reaching $205,000 in Heber and $101,000 in Kamas.

Looking Ahead

The gradual increase in dollar volume, median sales price, and number of closed sales in Summit and Wasatch Counties indicated strong and steady growth in 2015, though the market is not back to the highs of 2007. The median sales price continued to rise slowly at a pace of 4.7% this year, which fits the upward trend we have been seeing annually since 2011. There is still affordable property to be found within Park City Limits and the Snyderville Basin. While new construction continues to be in high demand, buyers must pay the premium costs for it.

“Over the past five years, our market has continued to post solid gains. Changes in the overall market have been steady and for the most part, headed in the right direction.  Demand appears to be increasing and as more buyers focus on our area for family, work, retirement and lifestyle, inventory will be an issue, particularly in popular areas.  Our community will continue to grow and with that, we hope there will be a variety of housing opportunities for a wide range of buyers,” said the President of the Park City Board of REALTORS®. Our market continues to be highly segmented with micro-markets dividing product by price, property type, and demand, so it is best to contact a local Park City REALTOR® for information on what is happening in your neighborhood.

If you have any questions regarding real estate conditions in your neighborhood, I am always here to help. Whether you’re curious or actively looking to make a transaction, contact me at your convenience.

In Park City Real Estate, Timing is Important…

The Sundance Film Festival is Not the Time to Buy or Sell Park City Real Estate

Egyptian Theater Park CityFifty Thousand people descend on our town of about 20,000 each year for the Sundance Film Festival. For ten days, our small town is transformed into one giant film festival and everything revolves around it. Even the public school schedules are altered because of the traffic patterns.

While the media showcases the celebrities at film premiers or walking down our historic Main Street, the truth is that these folks represent just a small fraction of those 50,000 visitors. My guess is that many of these visitors are:

  • Worker bees associated with the movies
  • Worker bees associated with the Sundance Film Festival
  • Volunteers associated with the Sundance Film Festival
  • Visitors who are fans of independent film
  • Visitors who want to “stargaze”, crash parties and are generally Festival “hangers-on”

My point is that none of the above are visiting Park City because of its amazing mountain lifestyle or to ski. Which means that every room is booked with people who have come to visit a film festival. The amazing location helps draw people, but it is secondary to the Festival. These visitors are generally not likely to invest in property.

Of the minority of Festival attendees who are familiar with our town and interested in looking at property while they are here, it’s almost impossible to find a condominium or home that is not rented to a Festival attendee. Since demand is high and rental rates skyrocket during the 10 days of the Sundance Film Festival, it is very difficult to find properties available to show and to navigate through the traffic and parking restrictions.

Which brings me back to my point. If you are a potential buyer or seller of Park City real estate, the Sundance Film Festival is not the ideal time to find the right buyer or property. When would be a good time? The Sundance Film Festival ends on January 31st. There will be a lull between February 1st and President’s Week, which starts on February 13th. The last week of February, after President’s Week and before “spring break” season is another great time to look around.

In the meantime, let me know if I can help with your property needs! I can set you up with a market snapshot so you can keep track of what’s going on in the Park City neighborhoods of interest to you.

How the Stock Market and Real Estate are Connected

12 White Pine Canyon in Park City
The stock market doesn’t always go up. But what does that mean for luxury real estate in places like Park City?

Those of us who have stock portfolios or retirement accounts may not be too happy with what we have been seeing over the past 6 months. The third week of August, 2015 was the worst week in four years, and a recent drop of 6.6 percent this month has reminded many of us that the stock market doesn’t always go up.

What could a stock market dip mean for real estate?

  • It could keep the Federal Reserve from raising interest rates on mortgages.
  • When stocks turn volatile, many investors turn towards real estate as a more conservative investment.
  • Real estate values correspond with the overall economy, including employment. As long as the economy is good, there will be demand for housing.
  • A psychological shift in buyers thinking they do not have ‘enough money’ in their portfolio could have a negative impact on demand.
  • Economic uncertainty or a loss of consumer confidence may cause buyers to delay purchasing decisions.
  • Declining portfolios could mean buyers have less cash for down payments or to close.

In short, if the stock market declines, but the overall economy is strong, we could see an increased demand in real estate as a less volatile investment opportunity. On the other hand, declining portfolios could have a negative psychological impact on buyers, causing them to delay purchases.

What are your thoughts? Please add them to the comments below.

Why I’m Buying A Park City Rental Property

…And Why You Should Buy One Too

I am buying a Racquet Club condo. Racquet Club condos were built in the late 1970’s and are located in the Park Meadows neighborhood. They surround the former Racquet Club, now known as the Park City Municipal Athletic & Recreation Center (MARC).

The condo I’m buying is clean and in close to original condition and it will make a great rental property. I’m paying cash, and if it stays rented, I’ll earn about a 4% annual return after taxes & HOA dues. This does not include the tax advantages for depreciation or the potential for appreciation, which I believe is significant.

Here are some photos of the condo.

RC 140 ExteriorRC 140 Interior

There are currently no other Racquet Club condominiums on the market, indicating a scarcity. Four have closed in the last 6 months. The least expensive Racquet Club closed at $465,000 and the most expensive closed at $550,000. The one I’m buying was listed at $449,000. This means that if I decide I want to sell the condo, I have the ability to add value through a remodel.

A few years ago, I sold a Racquet Club condo that was nicer than the one I’m buying for $265,000. That was at the bottom of the market. I know that we are not going to see those prices again, unless there is some sort of worldwide catastrophe like we had in 2008. Even in that worst case scenario, my condo will be rented and generate income. I won’t have to sell it in a down market.

I truly believe that Vail Resorts is a game changer in our town as they have started to create an entire economy of employees who will need to rent housing. With this purchase, I will be helping my community by providing a nice place for someone to live.

This condo also affords me with lots of possibilities for the future. My condo could be used by one of my kids after they are grown. Or, I may decide to downsize and live in the condo with my husband.

To sum it up, I’m buying a rental property because I think there is great upside potential for appreciation and a very limited downside. For me, the downside on this rental property is lower than if I kept that money in the stock market. If you wish to discuss the pros and cons of purchasing a Park City rental property, give me a call or shoot me an email. I always enjoy talking real estate with friends and clients.

Park City Real Estate Inventory Update!

Park City Homes For Sale – What the Inventory is Telling Us

7408 Tall Oaks Park City UT-small-039-34-7408TallOaks36-666x445-72dpi

As of this morning, there were 335 single family homes for sale in Park City. Twenty percent of those homes are located in Promontory, while just 2 (0.59%) of those homes are located in the Prospector neighborhood. Here’s a more detailed breakdown:

– There are 48 homes for sale in Old Town (14%), but only 4 homes priced below $1 million.

– There are 20 homes for sale at Glenwild, but only two for sale in Silver Creek, right next door.

– There are 15 homes for sale in Jeremy Ranch, but only 6 for sale priced under $1million.

– There are 12 homes for sale in the Trailside area, but only 5 for sale priced under $1 million.

– There are 18 homes for sale in The Colony at White Pine Canyon. The lowest priced home there is $5.9 million. The lowest priced single family home in the Canyons area is $995,000.

– There is only one single family home for sale in Park City that is priced under $500,000.

Turning to condominiums, as of this morning, there were 348 condominiums for sale in Park City. Only two 2-bedroom condominiums in Old Town were priced under $500,000. One of those went under contract in between the time I pulled the statistics this morning and when I sat down to write this blog this afternoon.

– There are 35 condominiums for sale in Lower Deer Valley. Twenty-eight have pended or sold in the past 6 months. Twenty-one are priced under $1 million. [Hint-this is a good neighborhood for buyers].

What do these numbers mean?

 

  • Our market is very segmented. You need the guidance of a real estate professional to price your property to sell and to understand your negotiating position if you are a buyer. There are neighborhoods where buyers have great leverage and others where buyers have little leverage.
  • The average days on market for pending single family homes and condominiums are lower than for active properties. This tells us that properties priced right will sell quickly while properties priced too high won’t sell at all. Even though Park Meadows has a very low inventory, almost every home currently for sale there has been on the market for over 3.5 months.
  • The inventory in Park City is becoming more expensive. Lower priced homes are more rare, but must still be priced in accordance with the market. For example, there is a home priced at $795,000 in Jeremy Ranch that has been on the market for 539 days.

If you’ve been thinking about a home in Park City, now’s the time. I have access to all of these available properties so give me a call at 435-901-0659 for assistance.

TRID – Tila-Respa Integrated Disclosure OR The Reason I Drink!

How Murphy’s Law Just Took Over the Loan Process

 As nerve racking as the loan process was before October 3, 2015, we now have TRID-“The Reason IDrink”.

“The new TILA-RESPA Integrated Disclosure (TRID) went into effect on Oct. 3, 2015. It’s two months later, and real estate professionals, as well as many buyers, have given the acronym a new meaning: TRID stands for “The Reason I Drink.” (Bernice Ross, December 14, 2015, Inman.com)


TRID has changed the closing process. Before October 3rd, in Utah, the title company worked closely with the lender and prepared the HUD-1 or Closing Statement. Since TRID went into effect, the lender (vs the title company) must prepare a “Closing Disclosure Statement”, or “CD”.   Because of the flow of debits and credits throughout the transaction, it’s possible for the buyer to receive multiple CDs. Each time the title officer receives new numbers, like taxes, HOA dues or a credit for repairs, a new CD must be generated. The kicker is that the CD must be issued no later than 3 days before the closing date and acknowledged (usually by electronic signature) by the buyer. If the buyer is electronically challenged, then the clock is set to seven days before closing. If the CD is not issued on time, the buyer will not meet their contractual Settlement Deadline.

7042 Powderhorn Ct Park City-small-004-DSC 1043-666x445-72dpiWhat could possibly go wrong? Just ask Murphy. Here are some examples that happened to my clients and I last week:

  • The lender and the mortgage broker work on different systems and have trouble coordinating the data entry for the CD. The CD isn’t issued on time and the closing is delayed.
  • There are errors on the CD which must be corrected, which restarts the 3-day waiting period all over again. The closing is delayed.
  • The seller didn’t get that window repaired in time for closing and wants to issue a credit for the cost of the repair to the buyer. That means a new CD, which restarts the 3-day waiting period. The closing is delayed.

It’s not fun when you are representing a buyer whose earnest money is already non-refundable and you have to ask the seller for an extension to the Settlement Deadline. Luckily, for my clients and me, their sellers were reasonable and we ultimately closed.

What can we do to prevent Murphy from ruining our transactions and placing buyers in jeopardy?

  • Work with a local lender who does not broker out loans, but actually funds them. I recently had an excellent experience with Wells Fargo.
  • When writing Real Estate Purchase Contracts, add a buffer of 2-weeks after the Financing & Appraisal Deadline (loan approval) and the Settlement Deadline (closing) to give the lender plenty of time to prepare the CD and ensure it’s correct.
  • Do not make changes to the Real Estate Purchase Contract after the Financing & Appraisal Deadline. This is difficult as things sometimes come up at the last minute. As Buyer’s Agents, we need to be on top of our game and ensure that there are no last minute surprises with repairs, taxes or HOA dues.

REALTORS need to educate both buyers and sellers about the new TRID regulations and how they can potentially impact our transactions. It is imperative that a real estate professional is involved in transactions involving financing, as there are a lot of things that can potentially go wrong. Hopefully, we are just going through a learning curve or adjustment phase. In the meantime, TRID, which was intended to protect borrowers, has put them at a disadvantage if they are competing for a property against a cash buyer.

Have you had any experience with a TRID closing? How did it go? We’d love to hear your experiences.

‘Tis the Season for Home Buying?

Seasonal-home-price11-e1449072453486

Now is the Best Season to Buy a Home

There is a discount to be had for the few buyers purchasing over the holidays. (Written by Lawrence Yunand published 12/2/15 on Forbes.com. See note below for Park City insights)

With increasing incidences of unruly shoppers competing over holiday sales, it could well be the best time of the year to be among the exceptionally few buying a big ticket item that both adds value and is long lasting. The big ticket item in this case is a home.  About one million consumers will purchase a home from November to January this year, when home prices are a bit softer.

As you may know, the typical home price tends to rise around 3% to 5% per year. This year in 2015, the gain is a bit stronger at 6% because of the ongoing shortage of inventory in many markets. But the annual price gain does not smoothly and steadily change from one month to the next. There is a clear seasonal pattern of rising prices from the spring home buying season to the end of summer. Then prices mildly retreat. Closings in January provide the best discount for home buyers, meaning that buyers get the best deal when they get the home under contract around December.

The graph below shows the median home price over the past five years. Note the month-to-month price swings that occur nearly every year with home prices retreating over the winter months. The seasonal decline is not all price depreciation of homes. A good portion of movement is driven by a higher proportion of lower priced and smaller-sized homes getting sold during the winter months. The reason for this is families with school-aged kids are generally not in the market during the winter because they do not want their kids to be disrupted during a school year, and it is the families with kids that generally require the larger homes that carry higher prices. So not all of the decline in home prices in winter is a genuine price depreciation, but is driven partly or largely by the different mix of homes being sold this time of year.

There is another home price measurement that can better delineate true price change from the changes in the mix of homes that are sold. The Case-Shiller price index, of which pair the latter professor won the Nobel Prize in economics, uses something called a repeat-sales price measurement. Briefly, they look at how a given property has changed in value from the first purchase to the second purchase. An algorithm is then applied over all properties sold to reveal a price index over time. Though there are caveats and statistical noise, the Case –Shiller index does a good job of capturing a genuine price change uninfluenced by the type or mix of homes sold at certain time of the year.

Yet even in this price index, one notices mild swings in the data with prices falling over the winter months. Real estate professionals know this to be true in everyday business since there are far fewer buyers shopping over the holidays; as a result, listed homes staying on the market for a longer period. In short, there is a discount to be had for the few buyers purchasing over the holidays.

Note from Nancy Tallman—I checked the statistics for Park City 84098 and 84060 and this trend holds true in Park City. See the graph below. If you are looking to move up, buy a second home or investment property in Park City, now is the time to act. Contact me at 435.901.0659.

Park City Median Price

Why Now is a Great Time to Buy a Park City Rental Property

Rising Rental Rates economic-and-housing-outlook-lawrence-yun-2015-11-13

The media has picked up the fact that home ownership rates are low among “Millennials”. What is less apparent is what a boon this is for potential real estate investors. Last month, I attended the National Association of REALTORS® (NAR) Annual Convention. A highlight was listening to NAR”s Chief Economist, Lawrence Yun, Ph.D., share his thoughts and predictions about the real estate market. These slides and this blog are taken from his presentation.

Rental Vacancy Rates economic-and-housing-outlook-lawrence-yun-2015-11-13

In his presentation, Dr. Yun mentioned that during the recent economic downturn, there was very little new construction. This has resulted in lower inventory and fewer affordable homes available, especially for first time home buyers. First time home buyers also have a hard time qualifying for financing as 41% have student loan debt of $25,000 or more. Finally, competition from vacation buyers and investors paying cash has made it more difficult for first time home buyers to compete when there are multiple offers. For these reasons, there is an historic low home ownership rate of young people under 35 years of age.

Home ownership rates are falling and predicted to fall even further. This makes buying and holding long term rental property a great investment strategy. The pool of qualified renters has never been better and rental rates are predicted to continue rising. There are some great rental properties available in the Park City area. In addition to solid rental income, Park City properties have seen solid appreciation over the past several years. Contact me at 435.901.0659 to learn how you can leverage this national economic trend to your advantage.

 

What is the Best Month to Buy Homes in Park City?

This chart shows the number of active single family listings vs. the number of sales.

Best Time to BuySource: Park City Multiple Listing Service.  Note, this chart was printed on 11/14/15 and does not reflect a 30-day month.

A picture is worth a 1,000 words. The fewest sales related to available inventory occur in the month of November.  Park City’s “shoulder season” has been getting shorter and shorter as we become more of a year round community.  The chart shows that the market did not slow down at all during the spring shoulder season. However, if you are looking to invest in the Park City real estate market, now is the perfect time.  As a buyer, you will have the least amount of competition with other buyers, while enjoying a healthy inventory with plenty of homes to choose from.  Search all Park City homes for sale here and give me a call to answer any questions you may have about available homes.

Up and Coming Wasatch County Real Estate!

Summit vs. Wasatch County Real Estate

Summit vs Wasatch

I just received the September, 2015 data from the Utah Association of Realtors.

Look what’s happening in Wasatch County! There were 77% more listings in September, 2015 than the prior year. Wasatch County is hot! Some Wasatch County neighborhoods that are extremely popular are Red Ledges, Black Rock Ridge, The Retreat at Jordanelle and new projects like Village at the Shores, which is located in the Jordanelle State Park and Marina area. These are all great neighborhoods and are attracting buyers who want a lower priced, newer home away from tourists. I’ve sold several properties this year in Wasatch County. It is most definitely an up and coming area. Check out the stats below and feel free to call me if you are interested in any of these newer properties.

Summit County Year to Date

2014 2015 +/-
New Listings 2,103 2,460 +17.0%
Pending Sales 1,269 1,514 +19.3%
Closed Sales 1,122 1,376 +22.6%
Median Sale Price $535,000 $574,000 +7.3%
Average Sale Price $866,516 $919,699 +6.1%
Days on Market 107 85 -20.6%

Wasatch County Year to Date

2014 2015 +/-
New Listings 1,071 1,163 +8.6%
Pending Sales 620 739 +19.2%
Closed Sales 556 562 +1.1%
Median Sale Price $315,000 350,000 +11.3%
Average Sale Price $410,457 480,930 +17.2%
Days on Market 112 112 0.0%