Park City's New Real Estate Market

After two straight years of record setting appreciation, Park City’s real estate market has changed in 2007. It is no longer a seller’s market. Buyers, who once were willing to pay almost any price for a property are now moving a bit slower as they evaluate their choices and negotiating more reasonably when trying to purchase a property. As a result, the market is finding it’s fair market price range.

Property Values Are Up

Park City home values increased by as much as 52% in 2006. Condos gained up to 67%, and lot prices rose by triple digit figures in some instances. A summary of the average sold prices along with number of sales of homes, condos and lots in 2006 compared with 2005 is available at Year-to-Year Sales Comparison.

Number of Sales Are Down

While values are up, the number of sales in 2006 were actually down by as much as half in several instances. Two main factors led to this reduction in sales.

The total number of properties for sale has decreased in Park City, resulting in fewer properties available to purchase. Fewer properties means fewer possible sales. This inventory shortage accounts for part of the slowdown.

Second, prices rose significantly in 2005 and 2006 which, in turn, priced many buyers out of the market. They simply didn’t have the cash or the ability to obtain the necessary financing to acquire these higher priced properties.

So while the inventory of available properties shrank, so did the number of qualified buyers able to purchase Park City and Deer Valley properties.

Days on the Market Are Up

So what happens when the number of qualified buyers declines? Answer: The properties for sale stay on the market longer. Park City home sales have slowed in 2006 compared to 2005. The average length of time for a home to sell in 2006 was 157 days compared to 123 days in 2005. Condominiums took an average of 147 days to sell compared to 121 days in 2005. Only vacant lots sold faster than the previous year with an average of 121 days to sell in 2006 compared to 125 days in 2005.

Property owners, who want to sell their property quicker, now need to price their properties more aggressively to increase the probability of meeting their selling time requirements.

The Future of Park City Real Estate

Home prices are continuing to rise, just at a slower pace than what we saw over the past two years. The time it takes to sell a property is now longer than recent years. When sellers price their property within a fair market range, they sell within a reasonable time frame.

Condominiums are a little different. The number of units for sale in a given development, or the quantity of similar properties for sale in the same geographical area, is having a greater impact on condo pricing than with homes. Again the time it takes to sell a condominium in most cases has been extended from previous years.

Available lots, particularly within the Park City area, are limited. There are a finite number of undeveloped lots and as the number decreases the value of vacant land will rise.

These market adjustments are normal and to be expected. Please contact Ron to find out what your property is worth in today’s market and how long it should take to sell it based upon your current competition and the price you ask for your property. Purchasers are also invited to contact Ron to find the best property match for what you’re looking for.