Early Season Real Estate Activity

The first 7 weeks of this year have been quite active for real estate sales. Particularly in Empire Pass at Deer Valley. This is largely due to developer's slashing their prices and offering incentives to encourage buyers to buy now. In the development called Silver Strike, there were 19 units available January 1st. At the end of January the developer auctioned off 8 units with prices averaging around $760 per square foot down from $1200 per square foot at the original listing price. The auction was extremely successful with all 8 units selling in about a half hour and as a result the developer lowered the price on the remaining 11 units to slightly above the auction pricing. Since that time 6 more units have sold leaving only 5 units out of the original 19 left unsold.


Another new development, Flagstaff, has seen similar activity. The Flagstaff building was completed this past November 2009 and the developer had tried to pre-sell as many units as he could during the construction phase. During the two years of construction 7 units sold. Because of the auction at Silver Strike the developer of Flagstaff offered buyers a 30% discount off the list price. In the past month I have, heard that the developer is seriously looking at offers even below the 30%. As a result, since January 1st 7 additional units have sold in the project. The obvious message here is that there is a price where these new condo’s become so attractive that buyers are stepping up and purchasing. This is a message that most real estate agents in Park City are trying to get across to all sellers.

The difficult part now is that buyers are coming in and expecting to discount the asking price even more. We, the Park City agents, are telling our sellers that if they want to get their property sold they need to price it at X price. While many are not enthused with this, they do understand the current economy and are listening to our advice. However, they are then not agreeable to discounting further. This is becoming a little bit of sticking point between buyers and sellers and as we educated our sellers on pricing we now have to educate our buyers on pricing. This is beginning to happen as properties that are priced extremely well are receiving multiple offers and selling very quickly. The buyers that come in and find what they are looking for and at a great price but still come in with a very low offer, are finding that sellers are unreceptive and more often than not they will loose the property that they wanted to someone who understands what is going on.

For the month of January the sales numbers are quite encouraging. While for only one month the numbers are small and a couple of sales can skew the averages but the big picture is promising. In 2009 for the month of January we saw 23 homes sell compared to 27 in 2010 for a 17.4% increase. Interestingly, the average sales price dropped 37% from $1,410,000 in 2009 to $888,000 in 2010. During January 2009 there were 4 sales of homes over $4,000,000 while in 2010 the highest price was just over $2,000,000. Condominiums faired even better; in 2009 22 condo’s sold compared to 44 in 2010 and the average sales price jumped over 150% from $663,000 to $1,695,000. As I mentioned earlier, with only one month's numbers a few sales can easily skew the numbers and in the case of condominiums the opening of St Regis, Silver Strike and Flagstaff condo’s greatly changed the market mix. For example in 2009 there were 0 condo sales in Deer Crest but there were 8 in 2010 with an average sales price of over $5,000,000. What is very interesting to me is that the number of vacant land sales more than doubled in the month of January from 4 in 2009 to 10 in 2010. The average sales price however was way down from $1,359,000 in 2009 to $381,000 in 2010, however as with condo sales, one sale can greatly skew the numbers and there was a large acerage parcel for nearly $4,000,000 that sold in 2010. Without that sales price the average sales price in 2009 would be very close to the number in 2010.

So while the early numbers are promising, they are just that, early numbers. However from what I have seen in February, I expect that the numbers will just be stronger. This all bodes well for 2010 and we will eagerly await the next few months.