Interesting Times in Real Estate

Most real estate markets throughout the U.S. are struggling to reach some stability and the rocky mountain resorts including Park City are no exception. While the general trend in number of sales has been on an upward trend since March, getting in to specific sales I find the numbers are all over the place. If we compare September 2009 to September 2008 the number of accepted contracts written were up 21% from 105 in 2008 to 127 in 2009. However, the number of units that actually closed was down 7% from 121 units in 2008 to 112 in 2009. I suspect that there are several reasons for this, the first is that in August 2009 only 85 accepted contracts were written and the second is a reflection on the difficulty buyers are having obtaining financing. In the past, from time of acceptance to closing for a property subject financing 30 days was common. With the current lending climate the days needed to close a contract has increased to at least 45 days and can often take longer than that.

Another interesting part of the Park City Real Estate market is the “seller’s mentality.” While we have been in a declining market for at least the past 18 months, this past year has been more like a free fall. Depending on when a property was purchased, sellers are now finding themselves selling their properties for the amount they purchased it for or in some cases less than the original purchase price. After many years of a steady increase in selling price this has been a very bitter pill to swallow particularly knowing that Park City is a highly sought after resort. For the past year Park City real estate agents have been working very hard to educate their sellers on where the market is and to price their properties to sell rather than be in a “chasing a declining market” game. Then the issue becomes that even though we have convinced the seller to price their property correctly, buyers are still coming in and expecting the seller to come even further off of the price. So the education now switches towards the buyer to explain where the market is and the true value of their vacation home. As consumer confidence increases I expect that we will see the number of sales continuing to increase and will be significantly higher than last winter. This could increase the differences in the mind set between buyers and sellers. With all of this said… this winter should prove to be very interesting.

Next week I will be in Whistler B.C. participating in a panel discussion with agents from Vail, CO, Jackson Hole, WY, and Whistler, B.C. Check back next week for what should be a very informative report.