The Future of Real Estate

During these uncertain times everyone wants to know what is going to happen with the real estate market and their investments in particular. My crystal ball has been very cloudy lately but I can confidently say that the resort real estate market will rebound and it will most likely be before the metropolitan markets. Now just what is it that I see that causes me to make such a statement? I am seeing several very positive signs that indicate a recovery in the real estate market, if not already occurring, it is not far off.

First is the stock market. The stock market tends to be an indicator of what will be expected six months from now rather than a single snapshot of the economy at the moment, so while the unemployment numbers are very high the market feels like the turnaround may be near.

Second, the number of new real estate contracts written in Park City has steadily increased each month beginning last March. It is true that the majority of these buyers are bargain hunters but the fact that they feel that we are close enough to the bottom or to get off the fence, is very encouraging. What is interesting to me is that the increase in activity covers all ranges of the market. Again, an indicator that confidence in our market has returned.

Third, for the past year I have shown property to many buyers who stated that “We are in no hurry and want to wait for the bottom of the market”. This waiting creates a lot of pent up demand. It is often said in a market that is moving downward that no one wants to be first but no one wants to be third either. So when the real estate market does start to rebound, as we are seeing, the pent up demand often causes a flurry of activity. Barring any new economic or political disasters, this initial flurry of activity can be the catalyst to a sustained increase in market activity.

While we are still in the middle of summer, oddly enough, buyers are thinking of the upcoming ski season and are thinking that now is the time to start looking for ski investments. As we get closer to the ski season there are more buyers looking and as a result of this sellers are feeling less pressure to accept drastic price cuts. Savvy buyers understand that the best deals are to be found from mid spring through mid summer.

Resort real estate is always speculative and subject to the whim of the economy but Park City is in a unique situation with its proximity to Salt Lake City. No other major ski resort destination in the west has the convenience of an international airport that is an easy 30 minute drive away. Another unique aspect of Park City is that unlike any other western resort Park City is not surrounded by national forest but rather land that was prospected for silver and privately owned. While other resorts have a scarcity of developable land witch puts upward pressure on prices we seem to have an over abundance of land, which helps suppress prices. The ski resorts certainly have their share of expensive properties but we are blessed with an inordinate amount of very affordable homes and condos (for ski resorts). This allows me to help buyers find a property that fits just about any budget and need.

So what does all of this mean? While nothing can ever be said for certain, my confidence is very high that Park City will come out of this downturn sooner than most and today’s buyers will be very pleased with their purchases.