End of Season

Now that another ski season has ended it is a good time to reflect back on the past 4 months, and what an interesting time it was! Let’s first start with the easy part, the ski season. November was warm and dry. Everyone was quite nervous as December approached and there was very little snow on the ground. The early part of December wasn’t much better but at least it turned cold and snow makers were able to work their magic and the resorts opened on time.

Fortunately, about a week before the start of the Christmas holidays it started snowing and we were able to open up most of the mountain with excellent ski conditions. As seems to be the norm for the past few years, the Christmas Holidays saw a continuous stream of storms roll through, the strongest on Christmas Day when 2 feet of snow fell. Needless to say, the skiing for the Christmas-New Years week was fantastic, with visitors enjoying all the new snow and a few sunny days. January, February and March were a nice mix of warm sunny dry spells and snowy periods. The last two weeks of March and beginning of April seemed like one continuous snow storm with over 8 feet of snow here at Deer Valley.

With the economic melt down in the U.S., the excellent ski conditions saved the season. While final numbers have yet to be tallied, preliminary reports from Deer Valley are that they will end up with similar numbers to the 2006/2007 ski season. The property management companies (who definitely struggled this past year) are also saying that their numbers are similar to the Deer Valleys skier days. While property management companies are reporting about a 30% decrease in revenue from last year, the actual number of visitors staying in their properties was only down 8% and up 8% from the previous year. One result of the lagging economy was that while visitors still came to Park City, they tended to stay fewer days and spend less money while they were here. Restaurants in town are reporting similar numbers to the lodging companies, which is their revenue is down 20 to 30% from the last year. Taken as a whole, I look at these numbers in a very positive light. I spoke to a lot of skiers who were here for the first time, and were very impressed with what we have to offer, and said that they would definitely return. Along with the new visitors, our past guests continue to come back although they were more frugal this year. If we can show these kinds of numbers during a strong recession I feel that the future of Park City/Deer Valley is very bright.

Now for the tough part….the real estate market. From late fall through late winter it seemed that anyone who had an interest in purchasing real estate all said the same thing, “I’m in no hurry and I think the market is going lower, ill just wait”. Around the middle of March it seemed like we may have come close to the bottom of the market and buyers started buying again. Beginning in the middle of March and continuing through today, everyone has noticed an increase in activity and contracts written. Properties are being purchased all across the board from the very low end to multi-million dollar ski homes. Looking through our rose colored glasses we are seeing signs that consumer confidence is returning and that investors are feeling that this is the right time to buy. Interestingly, this morning I saw an interview with Donald Trump who could not stop saying that this was the best time to be buying real estate in the U.S. and that he was buying as much as he could. Over and over again he stressed that for anybody that could “Now is the time to buy real estate.” Other investors that I speak with have echoed the same sentiment.

Now that the ski areas are closed, this is a great time to take a deep breath and get ready for what we hope to be a busy summer!

Is Now The Time To Buy???

As a long time REALTOR® in a destination resort, wherever I go around town residents and visitors always want to know what’s going on with the local real estate market. Residents are always interested to know if their property values are going up or down while visitors wonder if this is the right time to purchase. For this discussion let’s concentrate on the 2nd Home/Vacation Home buyer.

In a recent NAR survey of 2nd home buyers they reported that the number of 2nd homes/vacation homes purchased in the United States was down 30% for 2008. While this seems shocking at first it is not surprising. 2008, particularly the latter half, was a very stressful time for most Americans and a 2nd home/vacation home purchase was not a necessity. These purchases were put on the back burner. While not having seen any hard numbers for the first quarter of 2009, my observations are that the first quarter of 2009 numbers will be very similar to the numbers for the last quarter of 2008. During the first quarter of 2009 buyers were inquiring about vacation properties but were understandably nervous and not ready to pull the trigger. We have just begun the 2nd quarter and it appears that buyers are now feeling a little bit more confident and are once again purchasing. My guess is that a combination of the following factors has come in to play: Along with a drop in the number of home sales came a drop in home prices, interest rates are at an all time low and the stock market seems to be calming down.

While the stock market has certainly not settled on a particular direction the wild roller coaster fluctuations of last fall seem to have evened out. Lower prices combined with low interest rates seem to be attracting buyers who are fearful of loosing out on a terrific opportunity to invest in a resort vacation home. Many buyers remember 2003, which was the low point for the market after the 911 terrorist attacks and the Gulf Wars. Many buyers sat on the sidelines in 2003 not sure if it was the right time to purchase and then watched the markets escalate through 2006. Is this a repeat of 2003-2006? While no one can say for certain, I do feel confident in saying that this window of opportunity will end and there will be buyers looking from the wrong side of the window.

The past few weeks here in Park City I have seen a pronounced increase in interest and contracts written. What is very telling is that well priced properties are receiving multiple offers. This is telling in that buyers are out there and ready to purchase but only for homes they perceive to be an exceptional deal. This is not the time for sellers to test the market. If sellers are serious about selling, their property must be perceived as a “deal” not just competitively priced.

So, is this the right time to buy a resort vacation home? That is certainly an individual decision but the stars may be lining up to make now an opportunity that we may be wistfully looking back to.