5 Real Estate Habits of the Ultra Wealthy in 2015

Ultra Luxury Real Estate StudyFor the wealthiest people in the world, the real estate market is searing. The number of Ultra High Net Worth (UHNW) individuals is increasing, and they like to scoop up more and more properties all over the world.

In order to clarify and analyze trends, Sotheby’s International Realty recently published a study in which they looked at the real estate spending habits of the global population of UHNW individuals. Titled The Global Luxury Residential Real Estate Report 2015, the study analyzes 211,275 individuals in the world with net assets of $30 million or more.

Five Key Findings From The Study

  1. A UHNW individual owns multiple properties. On average, a UHNW individual will own 2.7 residential properties; 79% own two or more, 50% own three. Secondary residences tend to be 45% more valuable and twice as large.
  2. Real estate interests for a UHNW individual are increasingly more global. People increasinglypurchase foreign properties outside of their home countries, mainly the United States, the United Kingdom and Switzerland
  3. The United States is the most desired country for real estate. New York City shows to be the most popular area as it claims the highest number of UHNW-owned residences in the world. Besides access to business hubs, the U.S. boasts a high standard of living and excellent education opportunities.
  4. Personal wealth through real estate investment is growing. 7% of UHNW individuals increased personal wealth through real estate, up from 5% in 2013
  5. Real Estate assets are important for women. UHNW females hold 16% of net worth in real estate compared to 10% of men. Females tend to hold onto their properties longer, almost twice as long as men.

Receive Your Free Copy of the Study

Luxury Real Estate ReportThese trends allow just a small glimpse inside the intriguing and comprehensive study. Insights into the UHNW consumer and where and how they spend their money are fundamental to understanding major factors in the real estate market. This study was done by Sotheby’s International Realty in conjunction with Wealth-X, a world leader in UHNW research and prospecting.

Want to know more on Ultra High Net Worth individuals? Who are the most significant groups to watch? Which markets are emerging, and why? Please leave your name and email.

2015 Luxury Real Estate Report

Leave your name and email and we’ll send you a copy of the study.

The Latest on One Wasatch & Mountain Accord

Earlier this month, it was announced that the previously proposed One Wasatch plan to connect 7 Utah resorts has been put on the back burner. Instead, Mountain Accord has a new proposal.

One Wasatch was favored by many including Ski Utah, the ski resorts themselves. It was also largely opposed by backcountry skiers and environmentalists, who raised concerns about the impact on backcountry skiing, traffic and drinking water.

Mountain Accord BlueprintMade up of local governments, resorts and environmentalists, Mountain Accord is proposing a new plan that outlines the future of the Wasatch in terms of ski resorts, transportation, development and watershed. Rather than interlinking the resorts with lifts, they would be connected by bus or train. Much more of the previously unprotected backcountry terrain would be protected.

The current state of this plan is that the blueprint has been proposed and is open for public commenthere. Public comment will be accepted through March 16th.

ade up of local governments, resorts and environmentalists, Mountain Accord is proposing a new plan that outlines the future of the Wasatch in terms of ski resorts, transportation, development and watershed. Rather than interlinking the resorts with lifts, they would be connected by bus or train. Much more of the previously unprotected backcountry terrain would be protected.

The current state of this plan is that the blueprint has been proposed and is open for public commenthere. Public comment will be accepted through March 16th.

Meanwhile, In Switzerland

Two members of the Park City Council, a policy adviser, and two Summit County council members recently left for a trip to Europose to “study transportation systems in the Swiss Alps”, according to The Park Record. They specifically want to learn about ski lifts, gondolas, bus lines, trains and mountain tunnels. According to The Park Record, Mountain Accord helped organize this trip.

So, where does this leave us? We have a new plan, and they need public input. There is a Q&A and Open House this Tuesday, February 24th from 6:00 p.m. to 8:30 p.m. at the Park City High School Lecture Hall. We encourage people to attend and let their opinions be known. Let’s make sure we make the right decisions for our community and our future!

Can We Expect More Foreign Investors in Park City Real Estate?

More foreign investments in Park City real estate?Foreign investment in U.S. real estate is increasing as foreigners see the U.S. as a bargain and a safe way to diversify their portfolios. Nationally, we are 15-20% off of peak prices, so foreigners still see U.S. property as a bargain. (Park City’s median single family home price is about 12% below the peak). Foreigners are scooping up luxury properties in New York, Los Angeles and Miami. Can we expect them in Park City? The answer is an “epic” yes.

Vail Resorts is now running two of Park City’s three resorts and the Epic ski pass is already a game changer. Ski any of Park City’s mountains and you will hear a multitude of languages spoken on the chair lift. The Epic Pass is sold in 80 countries and in all 50 states. This one pass is putting Park City on the international map.

For the 2014/15 ski year, Epic Pass holders could enjoy unlimited skiing at 11 Vail resorts for $729.00. Epic Pass holders also gained access to limited complimentary skiing at Niseko, Japan, Verbier, Switzerland and Les 3 Vallees, France. The Epic pass is making the ski world a little bit smaller and more accessible for everyone. And those of us who live in Park City full-time or part-time know that once foreign visitors discover Park City, they will fall in love with it, too.

Bottom line? Expect to see more foreign investment in Park City.

Should I Sell My Home Now or Wait?

Sell Or Wait?One of my favorite clients mentioned that he is afraid to list his home because he doesn’t have another home picked out. So the question of the day is: should you sell your single family home now or wait? The answer is: that it all depends on your goals.

Is Your Goal to Move Up?

Wow-there could not be a better time to purchase a move up home. As of two days ago, interest rates were 2.875% for a 15-year fixed rate with zero points. It doesn’t get much better than that. Depending on your current mortgage, you could sell a smaller home, buy a more expensive home, and see no change in monthly payments.

Is Your Goal to Move Down?

Several clients I am currently working with are selling one large home and buying two smaller homes or condominiums in different locations. This is a great time to sell a home because the low interest rates give buyers more purchasing power.

Does it Make Sense to Sell in the Winter?

This is a great time to list your home for sale because the inventory is at record lows meaning there are plenty of buyers competing for fewer homes.

If the reasons you are considering selling your home are important to you, does it make sense to wait? No one knows what the future will hold. Right now, you can obtain a great price for your home, but who knows what tomorrow will bring? As we all learned in 2007, there are no guarantees. As a hedge against the unknown, I always recommend my clients buy and sell in the same market.

Have questions about the Park City real estate market? I have all the statistics for 2014 broken down by neighborhood.

Ready to get started on a change in lifestyle? Contact me today!

Park City Real Estate Market Update: Recap of the 2014 Sales Statistics

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

Annual Sales Volume

Inventory Levels

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:

  1. People who couldn’t afford single family homes settled on condominiums instead.
  2. 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.
  3. 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.

Home Prices

Median Home Prices

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.

Residents of Jeremy Ranch Fight for a Cause

Jeremy RanchWho Says You Can’t Fight City Hall?

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.

As a REALTOR©, I know there is great demand for affordable townhomes in Jeremy Ranch. As a resident, I don’t want my neighborhood to change.

There is another hearing on the General Plan on February 10th where revised maps will be presented. Then the County Commissioners will vote on the Plan.

What Park City’s Top News Headlines of 2014 Mean for Real Estate

Park Record Top Stories 2014
All images from ParkRecord.com

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.

  1. 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.

  2. 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

  3. 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

  4. 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.

  5. 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

All images from ParkRecord.com.

European Ski Experience Coming to Park City?

One Wasatch Proposed Plan18,000 Acres, 100+ lifts, 7 Resorts, 1 Pass.

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.

For more information, visit onewasatch.com.

Park City Activities for Non-Skiers

Park City Activities for Non-SkiersIt 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”.

Outside with the Family

Outside for the Big Kids

  • Rev your engine on a snowmobile ($$$$)
  • Hit the trails and go snowshoeing (Free to $$)
  • Learn a little about Park City history ($$)
  • Have a winter dogsledding or horseback adventure ($$$$)

Indoors with the Family

Indoors with the Big Kids

Evening Fun

For more tips or if you fall in love with Park City on your visit and would like to explore Real Estate opportunities here, contact me.

Insider’s Guide to Buying a Vacation Rental

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

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.

  1. Best location.

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.

  1. Expected Appreciation

[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.

  1. 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.

  1. 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!

  1. Expected Profits

[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.