Lower home prices are spurring sales
About one quarter of all real estate transactions in Park City involve distressed properties.
That’s not bad, said Deanna Devey of the Utah Association of Realtors. It’s average for the state if not slightly better.
Foreclosure activity is definitely improving, said Park City Board of Realtors president Mark Seltenrich.
"They appear to be trending down, but remain historically high," according to the second quarter report summary from the board released July 22.
Devey said short sales account for 13 percent of all sales in Salt Lake, Utah, Davis, Weber and Tooele counties. They are only 10 percent of sales in Summit and Wasatch counties.
"Comparatively, Summit County isn’t doing too bad," she said via email.
Statistics that sound negative but are actually good news was a theme for the mid-year report from the board of Realtors.
For example, sales prices are way down all over Summit and Wasatch counties. That has increased both sales volume and dollar sales volume by more than 60 percent compared to the second quarter of 2009.
The title of the report summary was "Park City real estate sales continue to thaw."
With $543 million in real estate sold, board president Mark Seltenrich said this year compares almost exactly with 2008 as the market was coming off the peak and beginning its slow decline. But perhaps a better comparison might be 2003 or 2004, he said.
Since 2005 was when the boom began, an argument could be made that the 2010 mid-year numbers show the area returning to "normal," he said.
So far this year, 669 units have been sold. That’s up from 415 for the same time last year and roughly compares to 2008.
The fact that lower prices are spurring activity in the Park City area is great news, he said, because homes won’t move in a depressed market regardless of price and that’s happening in other parts of the country.
With fewer speculation buyers shopping, the Park City area is continuing its decade-long trend of becoming more of a year-round community. People are recognizing the convenience of traveling in and out and are choosing to make it their permanent residence, he said. That brings stability to the market.
"It’s really unique that people live here who aren’t related to the resort industry. That means if the resorts do poorly, the housing market can still be strong," he explained.
Seltenrich said part of the level of controversy over the Sweeney family’s Treasure Hill development is evidence of that. When people make a mountain town their permanent home, they tend to be more involved in development decisions their city or county make.
Lower prices resulted in a 36 percent increase in sales of single-family homes during the first half of the year. Homes priced under $1 million are selling the fastest. Inventory levels are down about 450 units from the same time last year. That’s still too many for the homebuilding industry, but it is progress, he said.
The median sale price for a home in Park City proper is now $1,125,000 down 37 percent. That’s average for 64 homes sold almost twice as many as the same time in 2009.
The median sale price in the Basin is $650,000, which is down 7 percent for 105 units sold. Last year 66 were sold by mid-year.
Heber Valley home prices are down 12 percent to an average sale price of $289,500. Kamas is down 30 percent to $272,200. Seltenrich said the housing markets to the east and south of Park City and the Basin rely on the health of the latter to succeed. The farther away from Park City a community is, the more susceptible to market fluctuations it tends to be, he said.
Condominium sales saw the most improvement, Seltenrich said.
He thinks it is because prices came down on high-end units in Empire Pass. Also, St. Regis Deer Crest this year was successful at closing many of the deals made during the boom something not every development has been able to do.
Because more expensive units sold, the median sale price is up 29 percent from the same period in 2009. Sales volume is up 93 percent.
Even at $1.5 million, many condos were sold at 30 percent below original asking price and that was considered a bargain by those kinds of buyers, he said. Increasing sales also had the effect of bolstering confidence in the market.
Condos in the Snyderville Basin did not fare as well. The median sale price for the first two quarters is $325,000 down 14 percent.
Most of those sales were made outside The Canyons, he said. The developments near the ski resort saw buyers who put deposits down during the boom years but were reliant on bank financing that didn’t come after the recession started.
The area has also seen the worst cases of foreclosure because people bought overvalued property and went "underwater" on the mortgages quickly, he said.
This kind of unwise buying was widespread because Park City real estate was so hot that people bought property simply because they could.
"At the very height of the market, the value of a property was that it was for sale people wanted to get in at all costs," he said.
The rebranding of the Dakota Mountain Lodge to Waldorf Astoria Park City was a wise move, Seltenrich added.
"If it was a Waldorf from day one it might have seen a different mix of buyers," he said.
Sellers of vacant lots are also lowering prices and saw a 13-percent increase in total sales. Lots still only make up 10 percent of all real estate sold during the first six months of the year, but that’s a major improvement, Seltenrich said.
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Gov. Cox announced that the state’s mask mandate in schools would end for the last week of classes. Park City School District officials strongly recommended that students continue to wear masks. South Summit officials anticipated they would not require masks for the final week.