Housing market back to normal
July 20, 2012
Realtors and brokers agree: the Park City housing market is on the road to recovery. Seller and buyers are negotiating more, looking for the compromise rather than selling below home value or demanding bottom-dollar prices up front.
According to the Park City Board of Realtors, the Park City area just experienced its highest number of sales and sales pending of any first half of the year since 2007, before the housing market crash. A total of 486 properties were sold since the start of the year with a total sales volume of $347,392,785. In 2007, the first half of the year’s sales topped 610, a time when home prices were at their highest. PCBR statistician Mark Seltenrich said the current numbers more closely reflect the early half of the past 12 years, from 1999 to 2002.
"We’re approaching a balanced market," he added. "Whatever that is, we’re getting there."
For the third year in a row, the housing market in and around Park City has been in recovery, but it has been a long and slow process to get back to the "normal" Seltenrich described.
Average sales prices for both homes and condominiums are roughly the same as last year off by two to five percentage points over the same time last year but the number of properties on the market has dramatically decreased. Inventory levels dropped from 3,060 in 2010 2,700 last year and finally 2,500 this year, according to the PCBR.
"I think we all feel very positive about the year so far," said Tami Whisker, the PCBR president. "From the increase in the number of sales and pending sales, to our second quarter numbers being the highest in dollar volume since 2007, this speaks volumes."
Recommended Stories For You
The year started off slowly in the number of property sales, down roughly 11 percent in the first quarter of the year compared to the previous year. But the market rebound quickly from April to June, outpacing the previous year and setting 2012 up for the strongest year in the number of sales for the first half since 2007.
"Things started picking up in February and it’s been strong ever since," Seltenrich said. " I think people are just getting used to what the market is now. Park City has always been a desirable place to live but there was the national economy not doing well and uncertainty in the market. But after a long period, people are realizing that this is what the market looks like."
Distressed sales, a portion of the market that accounts for foreclosures and short-sales, have also decreased since last year. After peaking in 2009, foreclosures made up 27 percent of all sales in 2011. In 2012, first and second quarter foreclosure- and short-term sales made up 17 percent of all sales.
"I feel like we’re in recovery," said Jess Reid, broker and owner of Jess Reid Real Estate. "That’s the good news. The other side of that is that recovery is frustratingly slow.
"It seems like the Park City realty market is very similar to the national market, starting to come back one month and then the next month sales go flat."
The biggest challenges ahead will be second-home buyers, a major chunk of the Park City market, qualifying for loans, Reid added.
"The lending industry has to make getting a loan more reasonable," he said. "That includes vacation home loans and condo hotels where financing can be extremely difficult. Once lenders become more realistic and less afraid, it will help more buyers enter our marketplace."
With a more balanced market, both buyers and sellers are compromising more.
"We don’t have as many of the lowball offers coming in," Whisker said. "For a while, the buyers were coming in so low and the sellers were getting discouraged. Now sellers are pricing better and buyers are coming in with a more realistic offer."
2nd Quarter Housing Market Statistics
Single Family Homes made up most of the market in the first half of 2012, accounting for 46 percent of market sales and 57 percent of the dollar volume.
Sales and Inventory
610 properties sold or in pending sales
451 properties sold or in pending sales
486 properties sold or in pending sales
$347,392,785 in total sales volume
Home and condo sales up 3 percent over last year.
All property types median value increase of 11 percent over last year.
Old Town: Median home prices down 14 percent from last year
Park Meadows: Median home prices up 7 percent from last year
Kimball Junction: Median home prices up 33 percent from last year
Pinebrook: Median home prices down 9 percent from last year
Foreclosures and short-sales made up 17 percent of all sales in the first half of 2012, compared to 27 percent in 2011.
Information provided by the Park City Board of Realtors