Supply is down. It’s actually at record low levels.
Number of sales are down from 2013.
Sales volume is up from 2013.
Prices are up from 2013.
What does it all mean?
Sales Volume & Inventory
There is such a shortage of single family homes listed for sale that 983 sold in 2013 vs. 951 in 2014. This 3% decrease in number of sales is in contrast to condominiums (which increased about 10%) and vacant land (which increased 11%). I have a few theories behind these numbers:
People who couldn’t afford single family homes settled on condominiums instead.
Condominium sales were behind 2013 in January-September of 2014. After the announcement that Vail and Powdr Corp settled their lawsuit and it was announced Vail would take over as owner and the resort would open, condominium sales surrounding the resort spiked.
Vacant land increased because construction lending is back. Spec builders are re-entering the market and buyers who can’t find a home that meets their needs are willing and able to build custom homes.
Sales volume is up. This means that although there were fewer sales, they were more expensive, raising the total dollar volume of sales from $1,521,765 in 2013 to $1,667,108 in 2014.
The median price in general was up 3%, from $598,000 to $617,000. The average price was up 4% from $928,000 to $968,000. It is interesting to note how these numbers work out by location. In Park City limits (84060), the single family median price was stable at $1.3 million and average price was $1.87 million, up 3% and 5% respectively. In the Snyderville Basin, (84098) the average price was up 14% to $1.1 million and the median price was up 10% to $775,000. Snyderville Basin neighborhoods like Trailside, Sun Peak, and Silver Springs, and Pinebrook all saw their median price increase by double digits.
Lending & Interest Rates
There is a paradox of low supply, high demand, yet stable prices. An added factor is the historically low interest rates and easing of lending requirements. Buyers can obtain 100% USDA, 96.5% FHA, and 90% conventional financing (using a first and second loan option). Financing for condominium hotels is also back.
Although prices are up, they are not nearly back to the peak prices of 2006-08. Our market is stable with a healthy appreciation trend line. If you can find a property that is right for you given our low inventory, now is a great time to buy.
The above photo was taken last fall in front of a 16 acre parcel at the entrance to Jeremy Ranch known as “The Jeremy Center”. The owner of this land has development rights for 66,000 square feet of office/commercial development. He wants to increase those development rights to over 200,000 square feet of development and include residential condominiums. Over 2,000 residents live in Jeremy Ranch.
Let’s go back a step. Summit County is updating its General Plan. The General Plan will serve as an advisory document that defines future planning and uses for each of the County’s 16 neighborhoods. The Summit County Planning Commission is holding hearings on the General Plan to obtain community input. The goals of the 2014 update to the Plan include, but are not limited, to the following:
Sustainability, both in terms of development and the environment.
Preservation of open space, view corridors and scenic mountainsides.
Provision and inclusion of affordable housing.
Promote quality growth growth and economic development that provides a positive contribution to the community’s quality of life and the mountain resort economy.
The General Plan’s strategy for increasing open space is to concentrate density in specific areas called “density receiving areas”. The “Jeremy Center” parcel was designated as a density receiving area. Essentially, the General Plan, as drafted, would have more easily enabled the owner of the “Jeremy Center” to obtain approval for his project because it fit within some of the goals of the General Plan.
Overwhelming Meeting Attendance
The residents of Jeremy Ranch are organized into several Home Owner’s Associations, the largest being the Jeremy Ranch Owner’s Association, with over 650 homes. The residents of the Jeremy Ranch Owner’s Association sought legal counsel and organized support from the other Jeremy Ranch HOA’s. They hosted a meeting with Patt Putt, the Summit County Community Development Director. They contacted KSL and were interviewed for the news. They encouraged all Jeremy Ranch residents to attend a Planning Commission hearing held last Tuesday, January 13th. The anticipated attendance was so large that the hearing was moved to the Ecker Hill Middle School auditorium.
Over 200 Jeremy Ranch residents attended that meeting. Laura Arnold, President of the Jeremy Ranch Owner’s Association, made an impassioned speech against the Jeremy Center parcel serving as a density receivng area. She asked those who agreed with her to stand up, and the packed auditorium stood up.
What’s Happening Now
At the conclusion of the meeting, the Planning Commission directed staff to modify the draft future land use map to remove the Jeremy Ranch/Pinebrook interchange area as possible development receiving area.
I attended the hearing last Tuesday and was amazed at the sense of community I felt in the room. Patt Putt stated that he had never seen a hearing that was so well attended.
In a world where so much seems out of our individual control, it was heartwarming for me to see a group of organized neighbors wrestle a little control over the gateway to their neighborhood. I was also reminded how fortunate I am to live in a county where the staff and commissioners make transparent decisions and are not corrupt.
We love our local paper, Park Record! Founded in 1880 as the Park Mining Record, it has been delivering local news to Summit County for over 130 years. They recently released their Top 5 Headlines of 2014, and while we admit we’re surprised there was no ski resort chatter, we couldn’t help but speculate on the real estate implications.
Oil Pipeline: Not In My Backyard
Plans to “build a pipeline to pump crude oil from the Uinta Basin to refineries in Salt Lake, has had residents throughout the county on edge for most of the year”.
Real Estate Implications — In truth, nothing yet. There isn’t much use speculating on real estate until we know where the pipeline will go. However, the most recent proposal would skirt the hills of Kamas Valley, so we would put those properties on our radar. We aren’t saying that an oil pipeline nearby would put anyone in danger, but it’s the perception of danger that matters for your real estate value. If you have property that could be impacted by the pipeline, you may want to follow the subject matter closely and become more involved in the public hearings.
Former City Manager Travels Abroad
County Manager Bob Jasper retired and “right now, the former county manager is scheduled to be in Vienna, with plans to spend the New Year in Prague.” The paper continues, “in October, the County Council announced Tom Fisher as the county’s new manager. He will start on Jan. 20.”
Real Estate Implications — NANCY insert thoughts
The 2014 Election
“The 2014 election season ushered in some major changes at the county level as one incumbent was defeated and others chose not to seek re-election.”
Real Estate Implications — NANCY insert thoughts
The Canyons Golf Course
“After more than a decade of developing and designing the Canyons Resort Golf Course, it finally opened in early October for a couple days of invitation-only play.”
Real Estate Implications — There’s no doubt that, coupled with the other changes and developments at the ski resort, the golf course should do nothing but drive real estate values up. We are already seeing things on the rise in the Canyons area. NANCY insert some stats on Canyons real estate. Everything from Red Pine to The Colony…. are they going up? Anyone who is able to snag a property or hold on to the one they have should be in great shape.
Rockport Fire Part Deux
“Rockport Estates’ residents experienced déjà vu last summer when a fire tore through 120 acres, prompting a Local Emergency Proclamation in a scene reminiscent of a fire in the same area in August, 2013.”
Real Estate Implications — The Rockport area continues to be one of the most affordable areas to buy real estate in Summit County. This isn’t solely because of the fires, although it certainly isn’t helping. It’s also farther than a lot of other areas, and some of the services (water, plowing) aren’t built up yet, such as in Rockport Estates neighborhood. In my opinion, this is a great area for those looking to stay in the general area and wanting more bang for their buck. NANCY insert some stats on the Rockport area
The purchase of Park City Mountain Resort by Vail overshadowed Ski Utah’s announcement last fall about the “ONE Wasatch” concept. With the addition of just a few connecting lifts, seven Utah resorts can be connected into the largest contiguous ski experience in North America.
The geography of the Wasatch Mountains creates the world famous Utah powder. Yet, even the casual observer who looks at a map can see the existing Wasatch Mountain ski resorts are extremely close to one another as the crow flies. This unique proximity begs the question: What if you could ski between the seven resorts, and do so on one pass?
According to Ski Utah, connecting seven Utah ski resorts is possible with just a few steps:
Connect Little and Big Cottonwood canyons
Connect Big Cottonwood Canyon to Park City
Connect Park City to Canyons Resort
Drop the rope between Deer Valley and Park City
Dropping the rope between Deer Valley and Park City Mountain Resort seems easy enough and Vail has already announced it plans to connect Park City to Canyons Resort next season. Although the logistics seem simple enough, ONE Wasatch is currently just a concept and there is no timeline for implementation.
Why bother to link the resorts? Increased skier days in Utah. (Yes we are still behind Colorado and Vermont with respect to skier days). Skiers will certainly want to spend more time exploring each side of the Wasatch mountains and the distinct personalities and cultures of each ski resort.
Imagine waking up at Snowbird and ending your day at Deer Valley, visiting seven resorts along the way and getting the full scope of Utah’s unique geography and varied resort cultures. It’s a concept fully supported by all of the ski areas in the central Wasatch and is possible only here in Utah, home of The Greatest Snow on Earth.
It almost feels sacrilegious to say, but there are lots of great things to do in Park City besides ski. Don’t get me wrong, the skiing is world class all over Utah, and even when conditions might be (ahem) a little less than perfect early season, the skiing is still fabulous.
Whether you’re a first time visitor, a second home owner or a local resident, there are bound to be times when you or the people in your group simply don’t want to ski. Never fear. There are plenty of activities in Park City for non skiers. Here’s a short list of my favorite Park City activities “off the slopes”.
This article was written for Tripping.com with Volo. My client, Kris Getzie, turned an investment home she purchased through me into a money making machine and a vacation management consulting business. She asked me to write about FAQ for vacation rental homes and added comments based on her experience as a property manager. If you are considering the purchase of a vacation rental property, you won’t want to miss this blog post.
Buying a Vacation Rental Property
[Kris Getzie] Actually purchasing your vacation rental home is obviously a huge piece of starting your business. So, I’ve partnered with one of Sotheby’s top agents to help answer frequently asked questions.
Nancy Tallman sells vacation properties in Park City, UT so I’m very well acquainted with her strategies and work. In fact, she helped me find my first rental in Park City. Being that she is based locally, local examples will be used, but the principles apply anywhere.
Any good agent will want a clear understanding of your goals. So when a client tells Nancy they are interested in purchasing a vacation rental property, she asks a lot of questions to ensure no stone is left unturned and that the client finds the best home for their situation.
Regardless of the client’s personal goals, all successful vacation rental properties share these same characteristics.
We’ve previously covered tips for choosing the best location, which focused on local elements; local landscape, the surroundings, and understanding if nearby businesses and homes are complimentary to your intended experience.
Nancy actually helped me navigate some of these topics (i.e. the water main situation at my Park City rental), so I knew she’d have additional input on choosing the best location:
[Nancy Tallman] Best, like beauty, is in the eye of the beholder, so again, it’s important to understand the goals of my client. Do they plan to spend any time in the rental property? Is this a property my client hopes to live in one day? If the answer is “yes” to either or both of these questions, then the client’s lifestyle and personal taste come into consideration.
If the property is going to be rented 100% of the time, then we are looking at a pure economic decision. Economic decisions are always a dance between the price and income the property is expected to generate.
In my experience, the exact location may not be the strongest indicator of return on investment. For example, the rental differential on a ski in/ski out property may not be sufficient to justify the higher purchase price. An older condominium project with a low price and HOA dues could have hidden costs if there is deferred maintenance and planned owner assessments.
Take time to understand your intent (and financial needs) for the vacation home, so your chosen real estate strategist can better work for you.
[Nancy Tallman] In Park City, just like in any other town, the location will drive the appreciation. Appreciation is based on supply and demand. There is always going to be a limited supply of properties in walking distance to Historic Main Street, the ski slopes, and other amenities. There is also strong demand for new construction, which has seen strong appreciation even when located further from amenities.
The “average” annual appreciation in the USA is about 3%. In hot neighborhoods, we have seen 10-20% annual appreciation in the past couple of years. For some investors, cash on cash return is more important than appreciation. It depends on the goals of the client.
Positive Economic Signals
[Nancy Tallman] Property investors look at unemployment, job creation, population migration, economic stability, housing prices and rental yields when deciding where to buy. An unfortunate negative example of the above factors moving in the wrong direction is Atlantic City, New Jersey, where casinos are closing and people are losing jobs.
On the other hand, Park City has all of these factors moving in the right direction. Park City is just 30 minutes from Salt Lake City, which has one of the strongest economies in the USA, and is one of Park City’s major feeder markets for resort real estate. Vail Resorts recently took over 2 of Park City’s 3 ski resorts and has promised to make a “significant” capital investment in both resorts this year. The Sundance Film Festival also inked a long-term agreement with Park City, which means we can expect the world famous film festival to continue to draw vacationers to Park City for years to come.
[Kris Getzie] Driving maximum profit starts with a detailed understanding of your home’s location as well as the economy, as we described in planning for vacation rental success.Ideally, it is best to purchase an investment property when the economic indicators first turn in the right direction to purchase before prices have been driven upwards.
Reasonable Vacation Rental Costs
[Nancy Tallman] Costs can vary significantly from home to home or condo. It’s easy to detail fixed costs, such as the mortgage, property taxes, HOA dues and utilities as the previous owner can typically provide records for the past year(s). However, the cost of maintaining and managing the vacation property will vary; if the property is part of an HOA, some or all of the utilities and maintenance may be covered.
The costs unique to owning a vacation rental can be more difficult to figure out. They may include marketing, furnishing, property management, listing site subscriptions and website development costs. I refer clients to Kris to help them wrap their heads around these variables.
[Kris Getzie] It’s really important to have your real estate strategist help you determine the property specific costs. A good agent has worked with many types of properties and buyers and can easily dig into the details (HOA logistics, for example). After all, you don’t know what you don’t know so it can be hard to ask!
[Nancy Tallman] The expected income and expenses of owning a property will determine the profit. For some clients, spending Christmas with their family in their vacation property will be more important than the income they are giving up.
Even a property with a negative cash flow can be profitable when considering tax savings for depreciation and the property’s appreciation. On the other hand, if cash flow is important, vacation rental properties have the potential to generate tremendous income relative to their cost if they are managed like a business with a high level of customer care and an outstanding presentation.
The Park City Board of REALTORS held their November luncheon at the Montage Deer Valley on Thursday, November 20th. I had the privilege of sitting with our speakers, Bob Wheaton, President and General Manager of Deer Valley Resort, Blaise Carrig, President of the Mountain Division for Vail Resorts, and Bill Rock, COO of Park City Mountain Resort and Canyons. Each provided an update on plans for their respective resorts. A lot of this information is new and worth sharing with my blog readers. Much of it is highly relevant to someone looking to invest in Park City real estate.
Deer Valley® Resort
Bob Wheaton announced that Deer Valley was pleased to note that season pass sales and lodging are both up over 20% from last year. He wasn’t sure of the reason, but thought that it could possibly be due to the “Vail Effect”. With the recent cold temperatures in Park City, Deer Valley’s snow making is about 10 days ahead of this time last year. Deer Valley has recently purchased 5 snow cats and continues to improve its snow making capacity.
Steve Issowits, Director of Real Estate and Resort Planning for Deer Valley Resort, noted the new Brass Tag restaurant located at the Lodges at Deer Valley. This restaurant is committed to upholding the high Deer Valley standard and even makes its own bitters for the bar. Steve said that Deer Valley continues to work on a plan for a gondola that would be based at the Park City Transit Center in Old Town and would link Main Street and Silver Lake Village. Deer Valley is working with the University of Utah School of Architecture on a study.
Steve also touched on the eastern (Deer Crest) side of the resort. That part of the resort will definitely house a military hotel. The Mayflower land tract could change ownership by early next year, which would open additional possibilities for development on that side of the resort. He also mentioned that Deer Valley purchased Solitude resort because it has the same intimate culture as Deer Valley. No changes are expected there for this season.
Park City Mountain & Canyons
Blaise Carrig noted that since Vail is a publicly traded company, he could not publicize capital plans for the resorts until they are approved by Vail’s board at their December 5thmeeting. He advised everyone to look for a press release after the board meeting.
Vail uses the same marketing model as casinos. They are all about the on-mountain experience and make their profit by providing excellent lifts, ski schools and restaurants. They sell 400,000 season passes in 40 states and 80 countries. He told us to expect new visitors from across the country and across the world.
Because Vail took over Park City Mountain Resort so late in the summer, he cautioned that we should not have high expectations for the “Vail Experience” this season, but hopefully by next season. Vail made some needed improvements at Canyons, including an expansion of the Cloud Dine restaurant, doubling its size and making it a permanent structure. They did not make their typical capital investment at Canyons because they wanted to wait until the lawsuit was settled and make changes to both resorts at the same time.
Vail is committed to investing in a “pretty aggressive capital package” at PCMR. Blaise noted that Vail normally makes a big capital investment when they take over a resort. For example, they invested $50 million at Heavenly and $30 million at Northstar. (It is interesting to note that Bill Rock, the COO of PCMR and Canyons, came from the Tahoe area where he was responsible for both of those resorts.)
In my opinion, once Vail makes its capital improvement announcement after December 5th we are going to see an uptick in value and pricing in Park City, especially for the properties located in the PCMR and Canyons resort areas. Now is a great time to get in on what could be the last good real estate deals of the season.
You’ve probably been hearing about the ski resort changes in Park City for quite some time now. It’s hard to escape the topic in local publications and conversations alike. But Vail, Deer Valley and buzz about One Wasatch aren’t the only new topics up for discussion in Park City this year.
Where do I start? Park City is still the same town that you know and love, but when looking around you may have noticed business is booming; and it is booming everywhere. Seemingly overnight, new trails, farms, restaurants, film studios and stores have popped up pretty much in every single neighborhood. Here is a short rundown on changes in Park City for 2014-2015.
Tanger Outlet Expansion
A logical starting point may be the entrance into town from the west. Even before you reach the Kimball Junction exit on I-80, you’ll notice the Tanger Outlet Mall is undergoing a huge expansion. There’s a new coffee shop in the complex, Clockwork Café, so you can stay energized while you shop! New stores include Under Armour, White House/Black Market, Michael Kors and more.
⇒ Real Estate Effect: The additional shopping opportunities will add continued value to the already bustling Kimball Junction area, and surely keep long and short term visitors coming to the area to spend their money, a tax benefit to us all.
Except for skiing, there’s almost nothing a Parkite loves more than his or her trails. Thus it comes as no surprise that funding for trails continues to be a priority for both the local government and the residents. This summer and fall we have started to see three new notable trails take shape. First, a paved trail from Kimball Junction to Jeremy Ranch Elementary School along Rasmussen Road is now complete, including an underpass to the school. Second, if you frequent Highway 40, you’ll notice construction as the pedestrian and wildlife underpass is being completed. Finally, we are loving Dawn’s trail, which connects Armstrong and Spiro a couple of miles shorter than HAM trail.
⇒ Real Estate Effect: The neighborhoods which will specifically benefit from these trails, many of which are connecting trails, include Jeremy Ranch, Promontory and more. Of course, everyone who owns Park City real estate benefits from trail changes like these.
Bill White Farms
As you get off the exit and head toward Park City, you may notice a stylish farm on the right. Brought to you by restaurant mogul Bill White, Bill White Farms is a restoration of the 1938 Hixon Farm. This landmark will be used for producing locally grown foods while the barn will host cooking classes and community events. The venue also preserves a pond and water habitat for local water fowl and other animals.
⇒ Real Estate Effect: The restoration helps tremendously with the beautification of nearby neighborhoods Bear Hollow and Ranch Place. Locals and second homeowners benefit from the deliciousness factor that is sure to be upgraded at Bill White Restaurants.
A Local Favorite Gets Fried
Buzzing into town there’s a new epicurean gem, Bird & Barley. This little place has scored a lot of stars. Specializing in fried chicken and beer, it is said to be easy on the wallet and quick as a whistle. Sounds like a great stop after a day of skiing! Bird & Barley is located a few doors down from its owner’s flagship Sammy’s Bistro.
⇒ Real Estate Effect: Families rejoice. There is finally a meal in Park City that’s quick to grab and can feed a family of four for under $30. For $26, you get 8 pieces of fried chicken, a rotisserie chicken or a rack of ribs. You also get to choose from four delicious sides. This change is small but can effect families who are vacationing here as well as longtime locals.
White Castle, or Something Like It
Heading out of town on Highway 248 you might notice a big white castle. Well, it’s not actually a castle, and you certainly can’t order sliders there. It’s a film studio. To be precise, Park City Film Studios, LLC. After a temporary pause, construction has resumed.
⇒ Real Estate Effect: This is just another example of how Park City is adding commerce and diversifying its portfolio. Establishments such as this one, help make it so that our children can have careers in Park City which are not in the ski or hospitality industries.
That’s just the tip of the Park City iceberg. Stay tuned for updates on more expansions and their effect on Park City real estate. And start getting those ski legs ready! Things are shaping up to be an incredible year.
The Park City Board of Realtors just released its Quarter 3, 2014 data. I’ve studied the Press Release (my name is on it as President-elect) and I have attended two separate analyses of the information presented. You can view it here. Below is my analysis of the data and the Park City real estate market for the third quarter of 2014.
This data compares Q3 in 2014 to Q3 in 2013:
Sales of single-family homes are down 12% overall, 20% in Park City 84060 and 14% in 84098.
The overall single-family home median price is up 2.1% (but has been stable since January, 2011)
The median single-family home price in 84060 is $1.3 million and up 4%.
The median single-family home price in 84098 is $767,000 and up 4.2%.
A lower inventory usually means higher prices, but the overall median price has been stable for over 3 years!
I have been studying Quarter 3, 2014 reports from other “sister” markets around the country. They are all seeing the same phenomena of record low inventories, but these markets are beginning to see greater increases in sale price.
“As the third quarter of 2014 came to a close, total sales across all areas were down by an average of 11% from the same period in 2013. Is it an indicator of a slowing market? Not likely. The health of any market is not determined by the past but the present and future.”—Rob McGarry, South Bay Brokers, Manhattan Beach, California
A Segmented Market
Part of the reason for Park City real estate’s stable overall median sale price in light of record low inventories is that our market is highly segmented. Some neighborhoods are seeing flat or decreasing prices, while others are seeing enormous appreciation.
“Prices have stabilized and are improving slowly for our overall market. However, price appreciation is highly dependent upon property type and area.”—Rick J. Klein, Wells Fargo Private Banking, Park City, Utah
The median price in Silver Springs rose to $767,000, Pinebrook increased to $715,000 and Trailsideincreased by $90,000 to $600,000. It is no surprise that these markets all have record low inventories. The average inventory for Park City’s single-family homes and condos is 7.1 months. In Silver Springs, that number is 0.78, Trailside is 3.25, Kimball Junction is 3.43 and Sun Peak is 3.72. Expect to see appreciation in all of these neighborhoods in the coming months.
The condominium market also has its hot spots. Silver Springs has 2.0 months of inventory, Jordanelle has 3.6 months, Pinebrook has 3.79 months, Kimball Junction has 3.83 months, and Jeremy Ranch has 5.14 months. What do all of these neighborhoods, excluding Silver Springs, have in common? These neighborhoods all are composed of affordable and newer condominiums, which are very much in demand.
The “Vail” Effect
Vail announced its purchase of Park City Mountain Resort on 9/12/14. A study of pended properties between 9/12/14 through 10/31/14 compared with the same time period the previous year revealed a 43% increase overall, with a 71% increase in condominium purchases. There is definitely a Vail effect and as Vail invests into improvements at the resort and surrounding neighborhood, expect to see a further impact on the real estate market.
Advice if You’re Considering Listing
Current buyers have become so anxious to find the right property that many only pay attention to the new listings as they come out. This means that coming out with the right listing price when you first come to market is critical.
“I think to most sellers, the idea that a $1 million asking price would result in a sale price of $990,000 is counter intuitive to the level of negotiation that has always been associated with real estate. Now more than ever, asking prices must be realistic and carefully chosen to maximize the value of the property.”—Stan Ponte, Sotheby’s International Realty, New York City
Advice if You’re Looking to Buy
It is critical to work with an agent who understands the diverse Park City neighborhoods and who has connections with other listing agents so that a hot property can be previewed before it even hits the market. There may also be deals lurking on the active list, especially those properties that have not sold within the expected timeframe of their neighborhood.
“The properties stagnating on the active list likely came out with prices supported more by wishful thinking than data. After a few weeks, many of those sellers are not sure what to do. An opportunistic buyer can likely get a deal.”—Rob McGarry, South Bay Brokers, Manhattan Beach, California
The Park City Real Estate market is complex. There are excellent opportunities to invest in that perfect dream home, vacation home or investment vehicle. It’s critical to obtain expert advice when navigating our marketplace.
Rich Sonntag, Managing Director of Operations for Promontory in Park City, recently presented an update on the community. For those not familiar with Promontory, it is a 6500 acre development on the eastern border of Park City’s unincorporated area (zip code 84098). Every home and amenity at Promontory has been built since the community first opened in the early 2000’s.
Promontory’s home owners and developers have constructed custom homes and amenities according to cutting edge and ever-evolving mountain design trends. The photos below were provided by Promontory and are the best representation I have seen of the evolution of mountain design and architecture in the Park City real estate market. Check them out: