Is it a Buyer's Market?

Resort real estate and in particular, western real estate has a history of peaks and valleys. While the ski resorts throughout the Rockies have been somewhat insulated from the traditional urban real estate markets the economic downturn over the last six months has had an effect on us. Fortunately, unlike the real estate market throughout much of the country, we have not seen the drastic drop in prices as we hear about, particularly in places like Florida, Arizona, and California. For the first quarter of this year compared to the first quarter in 2007, we have seen a decrease in the number of sales of about 40% across the board, but only a 3% decrease in average sold price. This is similar to the last big economic downturn in 2000, where we saw the stock market drop 50-60% but real estate values in Park City remained quite stable. During the 2000 downturn, owners who owned property in the resorts saw their investments holding steady instead of losing value in the stock market. We are seeing a very similar trend right now where the market is on a roller coaster of ups and downs and our real estate prices are remaining flat. As in 2000, this kind of a market presents many excellent opportunities for savvy investors.

With properties taking longer to sell than they have in the past, we have more listings available for buyers to see, choose from, and find out which sellers are the most motivated to sell. Because Park City and Deer Valley are very desirable and sought-after, not all sellers are ready to give their properties away. With the expected ups and downs of resort real estate I always advise my owners to purchase with the understanding that real estate markets do fluctuate, and it is important that they be able to weather the slow periods. Unless there is a specific need to sell a property right now, I am advising most of my owners to either hold onto their price and wait out the economy, or just not put their property on the market at this time. Fortunately my clientele is such that the vast majority of my owners fall into this category. However as I mentioned earlier, there are sellers that are not in this position and not all real estate agents are giving this advice to their sellers, so there are some excellent opportunities to be had. As with the stock market, the smartest time to buy real estate is when the market is down rather than waiting for activity to pick up where sellers are less negotiable and there are fewer properties to choose from.