Real estate sales surpass $2 billion
Park City Board of Realtors statistician Mike Sloan did not predict total real estate dollars from 2005 transactions would be so high.
Friday afternoon, Sloan confirmed $2.098 billion in real estate transactions between Jan. 1, 2005, and Dec. 31, 2005 for the trading areas in Summit and Wasatch counties.
"I was wrong last year," he admits, "Last year, then [PCBOR] president Nancy Erni predicted $2 billion and she was right and I was wrong. I believe I predicted around $1.7 billion in transactions."
Sloan underestimated the market because of a limited supply of inventory, he says. He suspects the 3,957 units recorded as sold in 2005 came, in part, from pre-sold under-construction units that closed last year.
The mix of inventory sold last year included 1,200 single-family units, 1,454 condominiums and 1,185 lots, with the remaining balance of other property types like commercial-use buildings and leases accounting for the rest.
Surpassing the $2 billion mark has meant that the market’s dollar volume trumps 2004’s, which rang in at $1.228 billion in transactions. For 2004, Sloan calculated 3,300 units sold.
"The increase [in 2005] is from the additional 900 units sold and price has gone up as well," he explained.
Sloan is particularly impressed with sales in the Kamas area and Heber City.
"I think it’s important to note that the Heber Valley and the Kamas Valley are both up very high in terms of their increases over what they’ve been able to do [in terms of real estate sales]," he said.
Heber Valley was up 74 percent in terms of numbers of units sold, and in terms of dollars in sales, it was up 109 percent. Kamas was up 94 percent in terms of numbers of units and 203 percent in terms of the dollar volume.
The units sold in both areas were largely primary, single-family homes.
"I think by necessity, people are looking at the Heber Valley and Kamas because things are more affordable. The price is significantly less [than they are in the Park City area] at this point, but obviously moving upward," Sloan reports.
The average price for the sale of a Kamas area unit, $352,000, was higher than the average price for a Heber Valley unit, which Sloan calculates at $243,000. The difference is something worth noting, considering typically, Heber Valley’s units are more expensive, according to Sloan.
"Kamas is usually more affordable. I haven’t analyzed the units sold in Kamas to see if there were some large ranches. The price increase also might be due to the sale of some lots at Wolf Creek," he suggests.
Sloan concedes he is equally as cautious this year as he was last year about sustaining the same real estate market growth in 2006.
"Betty Brown [current president of PCBOR] feels the market is going to continue at this pace," he says. "I think we’ll have a difficult time reaching that same velocity or dollar sales, again primarily because of the lack of inventory."
Similar to the beginning of last year, 2006 seems to have only enough inventory for four months. Currently, listings feature 322 condos (which is estimated at 2.6 months of inventory), 388 single-family homes (3.8 months of inventory) and 404 lots (4.1 months of inventory), according to Sloan.
"Last year, to be quite honest, we had a similar kind of inventory to begin with, maybe a little bit more, but there were new products developed and we had new listings and sellers willing to sell because prices were going up," he explained. "But when we look at the market now, the units that have been approved and pre-sold in most cases are not under construction yet, and therefore won’t close until 2007."
It may be difficult for the Summit and Wasatch counties’ real estate market to top the dollar sales of 2005, Sloan predicts, adding, however, that he has no doubt the value of property will continue to steadily increase.
"With this kind of an inventory level, I don’t look for prices to drop much, if at all," he said.
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