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Market Update

January | Park City Real Estate Market Update

By January 31, 2023No Comments

Article Authored by Bob Bemis
Original Article Featured in PCMLS Monthly

After two of the most volatile years in real estate, triggered by the global pandemic that was COVID-19, sales numbers are returning to pre-pandemic levels. Sales prices are not.

The past two years caused huge swings in market reports as the mandated isolation to prevent the spread of the virus forced offices to close, employees to quarantine, and stock in online conferencing services skyrocket. Those trends are all reversing direction, and the Park City real estate market is reflecting those changes as the market returns to a more “normal” seasonal pattern.

  • Listing inventory is rising – In December ‘21 only 539 residential properties and lots were for sale. By December ‘22, that number rose to 1,263 (but was still 37% below the Dec-2019 figure of 2,011)
  • Prices are starting to level off – Within Park City limits, sale prices jumped 35% during 2021. In 2022 they continued to increase, but at half that annual rate.
  • Mortgage interest rates are trending downward – In late October, the average 30-year fixed rate was 7.08%. By the end of December, it had dropped to 6.48% and was headed down more.
  • Buyers are becoming more hesitant to make instant offers above the asking price and sellers are reacting by lowering those asking prices albeit at a slower pace. In Q3, 763 listings had at least one price reduction. In Q4, that number was 375. Price reductions in Q3 averaged 6.4% versus 5.7% in Q4.

Sale prices for single-family homes in the primary market area of Summit and Wasatch Counties as reported by the Park City Board of REALTORS® Multiple Listing Service for the year ending December 31 showed moderate increases in both average (Up 2%) and median (Up 3%). For the year earlier, those increases were 28% and 24% respectively.

The rate of sales (number of units sold) dropped 29% for single-family homes and 27% for condominiums from the year prior. Fears that the country might be headed into a recession, reinforced by a continuing push by the Fed to raise interest rates and stop inflation, and other negative indicators (gas prices), slowed sales across the region. However, an assisting driver of lower sales numbers continued to be the lack of inventory – agents cannot sell what owners will not offer for sale.

Park City neighborhoods vary widely in price comparison and the Q4-year over year results continued that pattern.

For Single Family homes, all but one of the major areas that make up the greater Park City market showed drops in units sold through 4th quarter of 2022 versus 2021. The exceptions were in Silver Creek Village where a boom in new construction pushed sales totals 200% higher than in 2021, and in the South Jordanelle area where the new Benloch Ranch development accounted for 68 of the 85 sales in the $1 to $2 million range. Interest is growing in anticipation of the Mayflower Mountain resort project opening for the 2024-25 ski season. Sales in the Jordanelle area increased 78% over the previous year, albeit at a lower median price point of $1.6 million, down from $2.3 million the year prior.

Condo sales across the entire market range followed a pattern similar to single-family homes. Total sales volume declined in all areas primarily due to a lack of inventory to sell. Within Park City limits, condo sales ©2022-23 Quarterly Market Summary – Fourth Quarter 2022 – Park City Board of REALTORS® All rights Reserved Page 2 volume was down 44% but median sale prices rose 15% to $1.5 million. In the Snyderville Basin, total sales volume climbed 32% because average and median prices both rose by nearly 50%.

The inventory of vacant land listings dropped from 902 in mid-2019 (before Covid hit) to 275 in Spring-2021 (just before vaccines became available). That number has increased steadily through the end of 2022 when we had 525 listings. Some buyers who bought vacant lots in years past with the intention of building in Park City found years later that the cost of construction (materials and labor – both in short supply because of Covid)) had increased so much that they delayed construction hoping for costs to return to normal. Some are putting those lots back on the market. At the same time, the increased demand for housing has spurred developers to break ground on projects that were delayed by the pandemic as well. The combination of those two trends is reflected in the number of new-construction listings which increased by 240% from 2019 to 2022.

Comparing the 12-months ending December 31, 2022, to the same period in 2021:

  • New residential listings (single-family and condo) year-to-date are showing signs of recovery after a lengthy period of decline. For the twelve months ending December 2022, total new residential listings were 2,997, down just 80 from the same period the year before.
  • The market is cooling off after an overheated two years of sales. PCMLS members signed 2,140 purchase contracts in 2022, 43% fewer than the previous year (3,765)
  • With New Listings running slightly higher than Pending contracts, available inventory started to increase. Only 265 residential properties were active at the end of 2021. That number boomed to 738 as of December 31, an increase of 178% year over year.

Overall, how did the local market fare? Here is our take on the total year-long results reported on a rolling year-over-year basis for the period ending December 31, 2022. (Note: only areas with 10 or more sales are considered in the tally and reporting.)