Year In Review

This past Sunday was closing day for Park City Mountain Resort and Canyons Resort, leaving only Snowbird, Alta and Brighton resorts still open. Both Alta and Brighton will be closing in the next couple of weeks and Snowbird will stay open through June and possibly into July. If it will stop snowing here in Park City, perhaps the local golf courses can dry out and we can move on to golf season. This is the 'ugly' time of year for the mountain resorts, no skiing, golf, hiking or mountain biking. Time to head South to warm beaches!

As I've been talking about for the last couple of weeks the first quarter stats have come out and are quite interesting. Before I get into the details, here is a little background info.The Park City Board of Realtors Multiple Listing System (MLS) divides our area into 24 separate areas in and the immediate vicinity of Park City. There are more areas which include the outlying communities but for what I'm talking about these are not important. Furthermore, for this report I am only looking at areas 1-10, which includes all areas within Park City's city limits including Park City Mountain Resort and Deer Valley Resort and also includes the Canyons Resort which lies just outside the city limits.


Comparing single family homes sold in the first quarter of 2011 to first quarter of 2010, there was a significant increase in the number of sales. In 2010, 26 homes sold, compared to 41 in 2011. Very telling, however, was the total dollar volume for these sales. The 26 homes sold in 2010 totaled a dollar volume of $70,612,500, while the 41 homes sold in 2011 had a total sales volume of $72,170,300. Did prices drop that much or is something else going on?

Condo sales showed even more dramatic numbers. Again, using areas 1-10 (Park City limits and Canyons Resort), there were 92 condos sold in 2010 and 89 in 2011. These numbers are slightly skewed as I'll explain momentarily. However, what is most striking is the dollar volume sold. In 2010, the 92 units sold had a sales volume of $139,683,000 while the 89 units sold in 2011 had a sales volume of $72,939,400. In looking at condo sales area by area, nine of the ten areas showed a significant decrease in average sales price from 16-40%. Again, what is going on?

Like with all statistic reports the raw numbers don't tell the entire story. But insight is really crucial to understanding what's going on and evaluating the strength (or lack of) of our Real Estate market. In the first quarter of 2010, we saw the St. Regis hotel open up and close on pre-sales that had been many years in the making. There were 12 closed sales in St Regis, with an average sales price of over $4.5 million, while in 2011 there were only two new sales closed with an average sales price of $2,770,000. A significant decrease both in number of sales and price point of what had sold the previous year dramatically influenced the market statistics. Also in 2010, in the Empire Pass and Silver Lake areas of Deer Valley there were two condo projects, Silver Strike and Lookout, that elected to auction off its units and another project, Flagstaff, which elected to drop its prices comparable to the auction price of Silver Strike. In 2010, 23 units sold compared to only 15 in 2011. Interestingly though in Empire Pass, the 23 units sold in 2010 had an average sales price of $1,733,000 while the 15 units in 2011 had an average sales price of $2,266,000 for an increase of 30%. Of the 10 areas that I'm reporting on, Empire Pass was the only area that showed an average sold price increase. Going back to single family homes, of the 10 areas that I'm reporting on, four of the areas showed an increase in the average sold price and two were basically flat.

Another area that I found very interesting was vacant land sales. Land sales continue to be one of the most difficult and hardest-hit parts of our market. However, one of our golf course communities, Promontory, reported a dramatic increase in number of sales. In first quarter 2010, there were 11 lots sold in Promontory with an average sales price of $119,000; while in 2011 there were 34 lots with an average sales price of $148,000. Once again, if we just look at the raw numbers and not delve into the cause, it would  appear that lot sales in Promontory have taken off and it could be switching to a seller's market. Not true. The average sales price of a lot in 2011 was $148,000 and is, at best, 1/3 of what the lot would have originally sold for. We have an overabundance of golf course properties and buyers are looking for and finding incredible deals. For the area golf courses, the same holds true for single family homes, where buyers are purchasing at prices that are significantly below replacement costs. ( I know of one buyer who feels that these lots are so undervalued that he is buying Promontory lots in bulk. So far he has purchased around 20 lots)

So what does all this mean? Buyers are here, they are buying, but they are only buying if they perceive the purchase to be a "deal." In each of the market segments that I'm reporting on, the properties in the lower end of the spectrum tend to be selling, again, what is perceived to be undervalued. Spec buyers have returned and are betting on the strength and desirability of Park City, of Americas infatuation with vacation homes, and a dwindling supply of under valued properties.

This is very strongly demonstrated by comparing the number of new listings between 2010 and 2011. In 2010 there were 254 condos listed in the first quarter, while in 2011 the number dropped to only 175 new condo listings. (again area 1-10). With the number of sales increasing, or staying flat, and the number of new listings decreasing, the competition for value is increasing. Reinforcing this point is that we are seeing multiple offers on well priced properties is desirable locations.

An interesting tidbit is that in 2010, roughly 50% of all transactions across the Park City MLS were cash transactions. This is no doubt a function of today's lending climate but I also feel that it is the very real perception that "cash is king." A buyer who can make a cash offer and close very quickly (many transactions close in less than two weeks) is in a very strong position and can negotiate very favorable terms. More often than not these cash buyers, who are often focused on an area but not necessarily enamored with a particular home or lot, will make offers until they find the right seller.

Is this the right time to buy? This is a question each individual has to answer for themselves and every buyers' situation is different. We are seeing interest rates starting to climb slowly and we are seeing numbers of transactions increase. (I am particularly surprised at the activity this week, with all 3 resorts closed.) What we're telling our potential buyers is that if they find a property that they like and if it is priced properly for the market, the time to act is now as it is very likely that the property will not be here on their next visit. The past two years buyers felt that their was no urgency and the fear was over paying as we did not know if the market had bottomed out. Now I am hearing buyers say that they are afraid of missing out on what could be the best opportunity to purchase at these prices and interest rates.

For more detailed information on specific areas, please call or send me an email. I am always happy to share my 20+ years of experience selling vacation properties here in Park City/Deer Valley.