The Old Town Real Estate Market Report Jan 2024

THE OLD TOWN PARK CITY REPORT JANUARY 2024

General Park City Real Estate Market Narrative – We finally got snow!!! Town was incredibly busy this holiday season but the ski and snowboard conditions were less than ideal pushing people out and about in Park City.  Although we’d prefer to talk about the snow and our holiday activities, this is a boring real estate market report. So, in an effort to not put you to sleep, we’ll keep it light and breezy while talking about the overall state of the Old Town Real Estate Market. Home Values are probably not what you’ve been hearing in the news. WHY?…….. Please see below:
 
Negative Forces on Pricing/Demand:
  • Global wars and uncertainty always cause pause in any market. The Israeli-Palestine Conflict and the Ukraine War continue to affect people and their major decisions. 
  • Election Year and the Effect on the Economy:

Visual highlighting how Democratic control of the White House and either a full Republican control of Congress or split control of Congress corresponded with positive absolute returns in excess of long-term average returns. Alternatively, Republican control of the White House and full Democratic control of Congress corresponded to positive absolute returns modestly below long-term average returns.

  • Elevated mortgage rates. While roughly 60% of all purchases in Park City are still cash, mortgage rates are a factor that slow buying.
  • Rental returns are still down from Covid years. Fewer people are full-time and there is more rental inventory. 2ndhome/investment purchases were also up during Covid and now people are traveling to other places again. Increased inventory and fewer travelers to our market than the recent 2-3 years (still extremely elevated since 2014-2019) causes lower rental returns and investor buyers are active in other markets.
  • 1031 Exchange money entering our market is way down as all real estate markets in the nation are slower.
 
Positive Forces on Pricing/Demand:
  • INVENTORY is the story in Park City and the surrounding areas! At 60% of average inventory, available homes for sale remain suppressed. With high building costs (Old Town may cost you around $1k/sqft to build), and as pricing levels off, there aren’t a lot of new home starts coming any time soon. Plus, Old Town has very few vacant lots. Limited inventory is counteracting any decrease in buyer numbers.
  • Inflation is nearing the Fed's 2% target. Truflation is website that measures current inflation using technology and has inflation at 1.86% as of 1/25/2024. When the Fed lowers interest rates, and easy returns dry up, people will look for other areas to invest their money. Plus with a resilient economy, good job market and lowering inflation, people's purchase power should increase.
  • GDP numbers as of 1/25/2024 showed the U.S. Economy grew 3.3% in the 4th Quarter 2023 with inflation simultaneously coming down. 
 
Will inventory return to ‘normal’ levels? We don’t think so, and here’s why:
 
  • Many buyers purchased before the Covid boom or before mortgage rates jumped. With low carry costs, a great ski season in recent memory, and a booming Main St, folks are in love with their Old Town Park City homes and don’t want to sell. 
  • Nowhere else to invest. We’re seeing 1031 Exchange money dry up, the stock market is unpredictable and Park City is really the top of the mountain so why leave such a great place?!?
  • Park City and Deer Valley Resort are world-class ski destinations. Other resort towns like Vail, Aspen, Jackson Hole, etc also saw dramatic price increases and Park City remains one of the more affordable options in comparison. Ease of access, non-stop flights and a quick drive up the hill elevate demand. Salt Lake is one of the fastest growing and youngest cities in the U.S and a huge feeder market (similar to how the Bay Area is a feeder market for Tahoe).
DATA Single Family Homes:
Very Similar Picture Q4 '22 to Q4 '23 but outliers as we see them:
  • Median Sale Price down -19%
  • Median Sale Price/Sqft down -8%
DATA Old Town Condos:
 
Takeaways:
  • Days on market decreased by 44%
  • Median Sale Price Increased 17%
  • Median Sale Price/Sqft Increased 11%
General Market Trends and Predictions
 
  • The 18th week of the year is when we historically see the highest levels of inventory (April 29 - May 5). We expect days on market to increase, median pricing to increase, and average pricing to either remain stable or dip a little. 
  • Outdated properties are slow to sell. Buyers will pay a premium for remodeled homes. With outdated homes, remodeling or pricing aggressively is a good approach.
  • High-end sales remain strong, while properties typically secured with a mortgage are softer.
  • Evidence emerging for 5% mortgage rates range by the end of 2024 will increase purchases. Buyers will all reengage at the same time. Sellers will also start selling and there will be more inventory.
  • According to the National Association of Realtors:
    • "NAR predicts 4.71 million existing-home sales in 2024, up 13.5% from 4.1 million anticipated in 2023.
    • Annual median home prices are expected to remain largely unchanged at the national level in 2024, for the second straight year, modestly improving affordability from rising income."
  • Is NOW a good time to sell? Only you can decide for yourself but we believe that selling a home when there is supressed inventory and active buyers is the best way to profit the most from your home's sale.
 Raw Data:
Single Family Homes
Q4 2022 Q4 2023 Increase/Decrease
Total Transactions 8 8 0%
Volume 43,128,744 34,947,504 -19%
High Sales Price 16,000,000 7,300,000 -54%
Low Sales Price 1,400,000 1,850,000 32%
Average Sale Price 5,391,093 4,368,438 -19%
Average Price/Sqft 1,965 1,574 -20%
Median Sale Price 4,899,873 3,975,000 -19%
Median Price/Sqft 1,633 1,506 -8%
Average Days on Market 80 99 24%
Final List Price / Sale Price 0.97 0.97 0%
Condos
q1 22 q1 23
Total Transactions 23 30 30%
Volume 33,722,922 41,413,380 23%
High Sales Price 5,075,000 4,500,000 -11%
Low Sales Price 565,000 485,000 -14%
Average Sale Price 1,466,214 1,380,446 -6%
Average Price/Sqft 1,036 1,073 4%
Median Sale Price 900,000 1,055,965 17%
Median Price/Sqft 923 1,021 11%
Average Days on Market 71 40 -44%
Final List Price / Sale Price 0.96 0.96 0%
 

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