The snow is melting SLOWLY

The snow is finally melting in Park City. Here is a photo taken this morning. You can almost see my front door behind the snowbank.

This photo was taken in January of my backyard:


This photo was taken in February:

And this photo was taken this morning. It will be a while before we're golfing, that's for sure!

Is it a Buyer's Market?

Resort real estate and in particular, western real estate has a history of peaks and valleys. While the ski resorts throughout the Rockies have been somewhat insulated from the traditional urban real estate markets the economic downturn over the last six months has had an effect on us. Fortunately, unlike the real estate market throughout much of the country, we have not seen the drastic drop in prices as we hear about, particularly in places like Florida, Arizona, and California. For the first quarter of this year compared to the first quarter in 2007, we have seen a decrease in the number of sales of about 40% across the board, but only a 3% decrease in average sold price. This is similar to the last big economic downturn in 2000, where we saw the stock market drop 50-60% but real estate values in Park City remained quite stable. During the 2000 downturn, owners who owned property in the resorts saw their investments holding steady instead of losing value in the stock market. We are seeing a very similar trend right now where the market is on a roller coaster of ups and downs and our real estate prices are remaining flat. As in 2000, this kind of a market presents many excellent opportunities for savvy investors.

With properties taking longer to sell than they have in the past, we have more listings available for buyers to see, choose from, and find out which sellers are the most motivated to sell. Because Park City and Deer Valley are very desirable and sought-after, not all sellers are ready to give their properties away. With the expected ups and downs of resort real estate I always advise my owners to purchase with the understanding that real estate markets do fluctuate, and it is important that they be able to weather the slow periods. Unless there is a specific need to sell a property right now, I am advising most of my owners to either hold onto their price and wait out the economy, or just not put their property on the market at this time. Fortunately my clientele is such that the vast majority of my owners fall into this category. However as I mentioned earlier, there are sellers that are not in this position and not all real estate agents are giving this advice to their sellers, so there are some excellent opportunities to be had. As with the stock market, the smartest time to buy real estate is when the market is down rather than waiting for activity to pick up where sellers are less negotiable and there are fewer properties to choose from.

Closing Week

With much fanfare the 2007-2008 ski season came to a close this past weekend. The ski conditions were the best that I have ever seen for closing with over a 10’ base and mid-winter conditions all last week. The weekend finally brought sunshine, warm weather and spring ski conditions on Sunday. Sunday the mountain was crowded with all locals and parties were everywhere. By Sunday afternoon the beach at Silver Lake was rockin’ with many stories being told of this past season. As we now wait for the snow to melt we can take a deep breath and relax with many fond memories of the season. From late December through early February was some of the best skiing imaginable as it snowed most every day. This year people were finally saying that they’d had enough powder skiing for the season.

Big news in real estate this week is that Lewis, Wolcott & Dornbush Real Estate is now a Sotheby’s franchise and our new name is Summit Sotheby’s International Realty. This is very exciting as Sotheby’s brings strong name recognition, and a lot of power to our upper-end market. With the worldwide connections we expect to tap into much more of an international market than we could as an independent brokerage here in Park City. Watch for further information as we make this transition.

Spring Skiing?

While the calendar may say it’s April 1, it feels more like December. After about a foot of new snow over the weekend, we woke up to temperatures near zero this morning which is making for incredible skiing for this time of the year. This year it appears that true spring skiing is still several weeks away. Visitors to town are enjoying uncrowded slopes and perfect ski conditions, very unusual for this time of the year. With only two weeks to go to the end of the ski season here for the local resorts, this past week saw the town alive with spring festivities. We had concerts Thursday, Friday, and Saturday nights on Main Street, and the Canyons held their traditional pond-skimming contest on Saturday. For the pond-skimming competition, the resort digs a large pond out of the snow, lines it with plastic, and fills it with water. The goal then is for skiers to ski down to the pond and maintain enough speed and balance to make it all the way across. This rarely happens. The event is filled with laughter, music, and many very wet skiers in a variety of costumes. If you ever have a chance to see one of these events, make a point of it.

Recently, the IRS has clarified some of its rules regarding 1031 “like-kind” exchanges and the ability of owners to use their property. The IRS has ruled that as long as owners have their property available for rent at market rates, they may use it for up to 14 days per year plus reasonable days for maintenance and upkeep and still qualify as an exchange property. As always, it is important to document usage, stays for maintenance purpose and amount of time the property is rented each year. Check with your accountant or an exchange accommodator for full details on these new rulings.

April 2008

As we wrap up the 2007-2008 ski season, it’s a good time to reflect on the past year. The skiing was the best it has been in many years with what seemed like snow every day from mid-December until February. Long-time visitors to Park City rediscovered our famous powder skiing and first-time visitors discovered what Utah skiing is really all about. It seemed like every other day in January we were saying that it was the best day of the year. All of the snow and all of the publicity brought record numbers of visitors to town. It will be interesting to see the final visitor nights but from what management companies have been telling me, this was their busiest year ever. And from the difficulty that I had showing properties, this was certainly true from my perspective. The ski shop owners are all smiles. Visitors to town were buying new skis, new ski outfits, and of course, everyone needed accessory items like gloves, hats, and goggles. This has certainly been good news to condo owners, store owners, and restaurant owners as news of economic downturns throughout the rest of the country seem to be the headlines every other day.

All of the Park City resorts are scheduled to close April 13, even though we will have around a 10-foot base and incredible skiing. Starting Monday, April 14, not only will the town be quiet from lack of visitors, but the residents will be headed south for warmer climates in an attempt to thaw out their frozen bones. Mid-April through May is definitely the quietest time of the year in Park City. Time for everyone to catch up with old friends, swap stories of the winter, and make summer plans. Quite humorously, I just received the schedule for the Men’s Golf Association and the first tournament is scheduled for April 27. Considering that there is still three feet of snow on the golf course and it is not melting quickly, I don’t see much chance of this occurring. Spring is the time for everyone to recoup, recharge the batteries, and prepare for a busy summer season. Now is the time to make your plans to come out and visit Park City and experience summer in the mountains.

Talisker Purchases the Canyons

The big news in Park City this week is that it appears that Talisker is set to purchase the Canyons Resort from American Ski Corp. This past year has seen a hotly-contested fight between Talisker Corp, a Toronto-based real estate developer, and Vail Resorts, for the rights to purchase the Canyons Resort. With recent court rulings and the dropping of objections from other land owners, Talisker is now in line to close on the purchase. While the sale of the Canyons to either Vail or Talisker was good news for the struggling resort, Talisker brings to the table the financial backing to finally bring the resort up to its potential. The first thing that we should see is increased snowmaking, better foodservice in the restaurants and more attention to customer service.

As the ski season enters its final month of operation, we are seeing several developments on the mountain offering terrific incentives to buyers to purchase this year rather than waiting. These incentives are often a combination of discounted price and attractive financing opportunities. At the same time, owners of resale properties are often more motivated on their price and willing to look at and negotiate offers. All of this adds up to spring being a terrific time to look at and purchase a ski property.

This winter continues to be terrific in terms of snowfall and visitors to town. Even though it is March, we continue to receive a fresh coating of snow every few days. The surface conditions on the resorts are much more like winter conditions than the wet spring snow that often occurs in March. With the longer days and warmer weather and excellent skiing conditions, this is a great time to come visit and see what Utah skiing is all about.

March 2008

What a terrific season this has been! From looking at the snowbanks around town it seems like it snowed every day in December, January, and February. The companies that shovel roofs have been extremely busy keeping up with the daily snowfall. This is the first year that I have ever had to have my roof shoveled, as the snow was over five feet deep on the rooftop. All around town it is a winter wonderland with many streets reduced to one lane. At the ski resorts we’re able to ski tree shots in places we have not been able to ski in years, as even on the south-facing slopes the snow is deeper than it has been for many years. Deer Valley reached a base of over 100 inches by mid-February, which is very rare. While the snow is terrific for the water table and the reservoirs, we’re not sure when we’ll see the golf courses. Last year on closing day, I skied in the morning and played golf on the Park City course in the afternoon. This year, if the course is open in mid-May we’ll be lucky.

In real estate news, the dour news from the stock market, economy, and housing market from around the country has definitely had an effect on us. While we are not seeing prices dropping below last year’s prices, we are seeing an increase in inventory and buyers being more cautious and slower to act than they have in the past. This translates to an excellent time to buy, as we know that all cycles run their course. Because development in the mountain towns is constrained by the topography our available building space is limited. This is particularly true at the resorts, where buildable land is scarce. Buyers looking for bargains should be looking now when they have choices and are in a much stronger position than they will most likely be in a few years when the market has turned around again. Too often buyers make the mistake of feeling that the market will continue to go down and miss opportunities.