Park City Housing Market Update – November 2022
Winter has made its arrival known in Park City, with 8-10″ received in town yesterday, and the Deer Valley Snow Stake topping out around 15″ on the day! For anyone who was clinging to the last remnants of fall, there is now no denying that bike season is behind us and we’re moving full steam towards skiing as the blazing snow guns at the resorts would indicate. With more snow in the forecast, the excitement and hope for a deep winter are palpable among us locals.
Many of the talking points of the last six month remain the same:
- Rising rates affecting financed buyers and their purchasing power
- Inflation and equity markets affecting the portfolios and purchasing power of cash buyers
- A lack of good quality inventory remains, and overall inventory remains below historical averages
- Premium properties in sought after locations are still selling quickly
- Investors are continuing to purchase real estate to diversify their holdings, and many still believe in the long term market outlook for Park City and surrounding areas
What We Are Seeing in the Marketplace
- Compared to historical averages, residential inventory on the Park City MLS is still 30-35% below where it is “normally” for September and October
- Since a seasonal high on July 30th, residential inventory has been dropping every week except for two when the market gained six and three listings respectively – hardly an increase and one that was negated by decreasing inventory in the follow weeks
- From the peak at the end of July, residential inventory has since dropped by 14%, and it appears that trend will continue at least until Q1 of 2023
- Inventory for raw land hit its yearly peak almost two months later, topping out at 593 parcels for sale the week of September 24th
- Despite land sales having seen the largest slow-down in sales pace, the active inventory is still down, dropping 7% over the last five weeks since its peak
- The lack of inventory, especially of quality properties that are priced appropriately, remains an issue that isn’t going away anytime soon. When rates invariably drop as the Fed corrects course – whether that’s in 6, 12, or 24+ months, the inventory issue is likely to once again rear its ugly head, potentially further driving prices up as buyers who’ve been sitting on the sidelines rush back in.
- The overly frothy list and sales prices have all but left the marketplace, though some sellers are still fixated on records set 12 months ago and remain steadfast in hoping to garner a premium price that just simply may not be achieved as buyers realize that time and demand is now on their side
- Last months sales to list price ratio of 99% for residential properties shows that most homes and condos continue to sell very close asking price – no signs of deep discounts at this time
- Land sales have seen more of an impact with October garnering a 94% sales to list price ratio, down from 95.1% in September – this will be something to keep an eye on and see if this is a continued trend, or just an outlier during shoulder season
- The median residential sales price for all areas is down 4% from September, but still up 3.6% year over year, again demonstrating that while we’ve come off of the all time high prices from April of 2022, broader values remain stable – we’ll keep tabs on the trend line through Q4 and into Q1 and Q2 of 2023
- Don’t believe the news headlines that may reference other markets, there are still zero distressed sales in the Park City market, down from an average of 0.9% – 0.3% of sales from 2015 through 2021 – so no, it’s not time to go pre-foreclosure shopping (I’m looking at you metro market multifamily investors)
- It’s important to note that our market remains segmented by price and location, as it always has. The broader averages speak of a market that is stabilizing and gaining its footing after a wild couple of years, but within that there are outliers in terms of sales pace and pricing. As always, it’s important to gather data for the property type, price, and location that specifically applies to your situation
Days On Market
- From September to October the average residential days on market remained flat at 40 days
- While this feels like a massive increase from the single digit days on market earlier this year, 40 DOM is still well within the margins of a sellers market, though much healthier and more sustainable for both buyers and sellers from the previous record lows
- These numbers also coincide much closer with the more balanced market we witnessed between 2013-2019, if anything running slightly below the days on market of those years
- It will be interesting to see if the days on market continues to remain relatively flat over the coming months – if so it will be another indicator demonstrating stability in the broader market and sales pace
Advice and Observations for Buyers
- Put Pen to Paper
- For most property types, buyers can afford to be patient and find the right place. That said, if a property checks 80+% of a buyers boxes, it should be in serious consideration. There is no such thing as a perfect house, and that will always be the case regardless of market conditions, so right the offer and start the conversation.
- Get the Price You Want Now
- If you find a great property and your only objection is price, don’t wait and write the offer at the price that makes sense to you. Given the choice between securing a great property that you can use today, versus waiting for a discount that may or may not come in the future, our preference is asking for the discount now to secure your place in Park City and start building equity.
- Substantiate Your Offer With Data
- Making large life and financial decisions based on emotion and economic turmoil of the last few months is not a wise course of action. Stepping back, looking at your goals for 5, 10, and 20 years down the line, and leaning into the data provided by your trusted team of a top performing realtor, financial advisor, and/or lender is how you make good choices for the long term. If you choose to “ask for the discount” in todays market, sellers will want justification for your position. “I don’t like the market” and “I’m scared of what the future hold” are emotional responses, whereas understanding recent sales data, quantifying remodel costs with local, reputable contractors, and providing background on purchasing power relative to mortgage rates is how you may be able to justify your position to a seller and get a deal done.
Advice and Observations for Sellers
- If It Seems Too Good to Be True, It Probably Is
- If you’re interviewing agents to list your home and the broad opinion are like-minded on value, be wary of the overly enthusiastic outlier with the price that is too good to be true. Just as with buyers above, getting overly emotional may cause sellers to act aspirationally on their list price only to then have to reduce their price one or multiple times before selling. One record setting comp does not a market average make.
- Be Patient
- With a residential average of 40 days on market, sellers should be prepared for their property to take a few months to sell, even if it is a good home priced accurately. Being aware of these timelines and setting these expectations up front will help keep nerves calm when there have only been a handful of showings and no offers in the first 10 days on market.
- Work With Agents Who Know Your Market
- With 1,500 agents in Park City, there are a lot of choices of who to work with, and many exceptional realtors. That said, you want to work with an agent who has sold numerous properties in your area and price range, and has a thorough grasp on the nuances of your property type, development, and buyer pool. And of course, it’s not just what you sell, but how you sell it. Working with agents who have a proven track record and systems will set you up for success.
Choose Park City Real Estate Sales for September and October 2022
- We put 2 properties under contract for our buyer clients for a total of just over $1,915,000 in pending contract volume
- 7 transactions closed for just under $6,000,000 in sales volume
- One buyer secured a dream building lot off market due to our agent and peer network
- We brought two listings to market at prices of $1,150,000 and $3,400,000
Thanks for reading this month’s market update, and as always, reach out to us if you have questions on how these numbers will affect you and your situation. Whether you are a possible Park Meadows home buyer, potential Deer Valley home seller, or an interested property investor, we can put the stats and our Park City housing market knowledge to work for you no matter what your needs and budget are. Everyone’s situations are different, so knowing how to apply the data is integral to making wise real estate decisions.
-Brendan Trieb, Choose Park City