April 19, 2022 – The remarkable rise in the sale prices of single-family homes that we experienced since shortly after the global pandemic struck in the latter half of 2020 continued through all of 2021 and into the first quarter of 2022. 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 showed strong appreciation with increases in both average (Up 20%) and median (Up 16%).
Despite appreciation slowing the rate of sales (units were down in many areas), the overall dollar volume remained relatively steady because of the higher sale prices. Fears that the market might be overheated, reinforced by a sudden rise in interest rates, continuing supply chain difficulties, and inflation indicators, slowed sales.
The resort and luxury home markets were less affected by these trends than other areas, even within Utah. Price appreciation continues to be driven by a dearth of available inventory, but that trend is reversing. At the end of 2020 there were only 541 residential properties for sale across the entire marketplace. By the end of 2021 that number was 265 and many of those were still under construction. But sellers who fear they may be missing out on a healthy profit brought more homes to market and at the end of Q1-2022 there were 317 homes for sale, a 20% increase.
Some neighborhoods always fare better than others and the Q1-year over year results were no exception. For Single Family homes, all but one (Kamas Valley) of the major areas that make up the greater Park City market showed drops in units sold through first quarter of 2022 versus 2021. Within the Park City limits, unit sales dropped 45%. However, because of the historic rises in median prices, particularly in the outlying areas, only three of the major areas (Park City limits, Snyderville Basin, and Jordanelle) showed declines in total sales volume.
Condo sales were even stronger across the entire market range. The Park City limits and Heber Valley areas showed declines in total sales volume, primarily due to a lack of inventory to sell. Within Park City limits, condo sales volume was down 11% but median sale prices rose 20%. In the Snyderville Basin, total sales climbed 73% because average and median prices both topped 50%.
New listings and listing inventory, however, remained low but began a slow but long-expected recovery reversing their downward plunge.
Comparing the 12-months ending March 31, 2022, to the same period in 2021:
· Not only were homes selling quickly, but not as many were being offered for sale. New single family listings thru Q1-22 totaled 1,715, down 17% from Q1-21.
· PCMLS members signed 1,495 purchase contracts in the 12 months ending 3-31-22, 26% fewer than the previous year (2,201) Those few homes coming to market were snatched up quickly maintaining the low inventory.
· With New Listings (1,715) running slightly higher than Pending contracts (1,495), available inventory started to increase. Only 265 residential properties were active at the end of 2021. That number was up to 317 at the end of Q1-22, an increase of nearly 20%.
Overall, how did the local market fare? Here is our take on the total year-long results reported on a rolling yearover-year basis for the period ending March 31, 2022.
Single Family Homes
Overall sales units dropped 22%, but a 16% rise in median prices kept the total sales volume close to the year prior. Through Q1-22, the $2.95 Billion in total sales was just 7% lower than the Q1-21 Y-o-Y total of $3.16 Billion.
Highlights of the single-family home market:
• Within Park City Limits, total unit sales were down 45% over Q1-21 to 181 units but sales volume declined just 24% from $1.2 billion million last year to $770 million this year.
• The median price of a single-family home across the city rose 35% to $3.5 million.
• In the popular Old Town area units were down 58% (119 to 50) as the median price set a new record above $2.9 million.
• The Prospector and Thaynes Canyon neighborhoods led all others for greatest increase in median price, with Thaynes up 75% to $4.6 million and Prospector up 85% to $2.4 million.
• Snyderville residents saw a slight decrease in sales volume (down 6%) on a strong increase in the overall median price up 23% to $2.0 million. Almost all the Snyderville neighborhoods saw declines in units sold with Sun Peak/Bear Hollow area dropping the most (70%) to 10 units. Summit Park had the biggest gain with 41 homes sold, up 24%.
• Nearly one-third of overall sales volume was in Promontory ($400 million) while Silver Springs and Old Ranch Road areas saw the biggest price increases with the median prices rising 75% and 99% respectively. The median sale price in Old Ranch Road rose to $6.5 million, nearly double the year before.
• The hotspots south and east of the metro area around the Heber and Kamas valleys showed substantial median price increases of 30% and 35%, respectively.
Despite fluctuations in the regional markets, Single Family sales activity in the primary market area was markedly down compared to the year prior with sales volume off 7% and while median prices were up 16%.
• The Condo market in Old Town Park City continued to be solid with unit sales level but sales volume up 40% on a gain in median price of 32% to $890,000.
• Park Meadows was the standout neighborhood performer with sales volume nearly doubling (up 74%) on a steady median price of $1.36 million, up 4%.
• Lower Deer Valley, Deer Crest, and Prospector all showed strong appreciation with median price gains of 36% or more.
• In the Snyderville area, outside of perennial volume leader Canyons Village, Kimball and Pinebrook led in sales volume (both up 30%) while other Snyderville neighborhoods saw sales decline due to lack of inventory.
• In Wasatch County, (areas with 10 or more sales are reported) Jordanelle Park doubled its sales volume over the prior year on a huge gain in median price, up 85% to $973,000. Deer Mountain and Tuhaye/Hideout both increased sales volume by nearly 60%.
• After explosive growth in the year ending 12/31, Land sales declined across the region with every major area showing drops in units sold. But volume remained steady or grew substantially.
• Jordanelle showed the most activity selling 396 lots this year just six units shy of the prior year. Those lots sold for nearly twice the price of lots in the year ending 3/31/21. The median sale price was $699,400, up 97% from $355,000 the year before.
• Overall land sales in Summit and Wasatch counties were up 31%, however, the price increase expected when supply decreases and demand remains steady, pushed the median sales price for land region wide up 78% to $650,000.
• All the major areas of the market except Snyderville Basin saw a substantial increase in sales volume. Jordanelle led the way with $363.6 million in sales, almost double the previous year’s total.
• Only 39 lots sold within the Park City Limits but that lack of available lots coupled with high demand pushed the median sale price for the few that did sell to $2.15 million, up 59% from the year before.
Opinion and Observation
What do Park City agents see coming in the next three to six months? Here are a few observations about the important market results that point the way coming from those with their fingers on the pulse of the market.
ON SINGLE FAMILY HOMES:
· In the two years since the Covid pandemic started, we saw most of the lower and middle priced inventory sell quickly. That left the higher priced homes on the market and the sale of those homes, without the market-balancing effect of lower priced homes, pushes the perceived overall price much higher.
· Park City has enjoyed a strong, sustained market because of its unique positioning as a resort and recreation market.
· It’s important not to use the broader market trends to paint every local neighborhood. The market is highly segmented, and each neighborhood in Park City has unique values, and unique pricing trends.
· One or two very high-priced sales can skew the average price much higher than expected. It’s important to look at the nuance and detail behind the neighborhood pricing numbers.
· Park Meadows remains the most stable neighborhood in the Park City metro area with prices remaining relatively steady compared to the other highly appreciating neighborhoods.
· Within the Park City Limits, the volume of sales fell 24% from last year, but prices climbed. It now costs more than $3.5 million (median sale price) to buy a house in town in Park City.
· The northern neighborhoods that make up Snyderville Basin — Pinebrook, Silver Springs, Summit Park and Jeremy Ranch – continue to be the more popular areas, with 40 or more sales in each (exceeded by only Promontory in total number of sales).
In a superb example of how dramatically this market is changing, Rick Klein, long-time, frequent contributor to our agents’ understanding of magnitude of the changes in the local market, showed the changes in absorption rate over the past two years. Rick has compared market times for Single Family homes sold in 2021 to those in 2020 and 2019, based on whether the asking price was above or below the median for the area.
At the end of March 2020, the median price of a single-family home in Park City was just over $1.9 million and the average market time was 8.9 months. Homes priced below the median sold on average in 3.1 months while those above the median took more than a year (14.4 months) to sell.
Fast forward two years. At the end of March 2022, the median price of a single-family home in Park City was just over $3.5 million and the average market time was 1.9 months. Homes priced below the median sold on average in 1.2 months while those above the median sold in 2.5 months.
These differences in market time based on price confirm that a Realtor’s help in setting a realistic list price is absolutely crucial for achieving a quick sale.
Inventory or lack of inventory continues to be a concern. As of April 1, there were only 114 single-family homes offered for sale in the PCMLS. But of those, 34, or 30%, were under construction. You could not move in even if you wanted to. And of those 34, 30 of them had estimated completion dates of six months or more after 4/1.
The dichotomy between new and resale properties is most pronounced in the variance of sales prices between the two. In the past twelve months, in the Park City metro area, the median sale price for existing condos was $1.25 million. For new condos, it was nearly three times as much ($3.5 million).
Single-family homes showed a similar pattern, although not as severe a difference. The median price for an existing home in Park City was just under $4 million, while new single-family homes were almost 50% more at $5.7 million.
The record low inventories are showing signs of recovery. In January, the combined active listings of homes and vacant land was at an all time low of 486 units. By the end of March that number had risen to 642, a 32% gain in just two months. Local Park City agents cited fears by homeowners who were on the fence about selling now deciding to list for fear of missing the peak of price appreciation. The trend continued into April with a net gain of 80 more active listings as of April 15.
As inventory moves slowly toward a more historical average, Pending and Closed sales likewise are showing signs of returning to pre-pandemic normal levels. Pending contracts on residential properties in Q1-22 are nearly the same as they were three years earlier in Q1-19.
Anecdotally, agents report some sellers think the market has peaked and are starting to accept or counter offers at far less than they would have a year or even a few months earlier.
One more unknown factor creeping into the housing equation is mortgage rates which on average topped 5% in April for the first time in ten years. But this may not have as much impact in Park City, where over half of the home sales were all cash, no mortgage. Predictions about the effect of rising interest rates on the national market vary widely. Zillow is predicting 14.9% growth; Bank of America just 10%; Fannie Mae says 10.8%; NAR predicts 5.7% and Realtor.com comes in lowest at 2.9%. (Source: https://www.marketwatch.com/picks/home-priceappreciation-will-normalize-what-5-economists-and-real-estate-pros-predict-will-happen-to-home-prices-in-2022-01646940841 )
· The condo market in Summit and Wasatch counties continued its strong showing with price appreciation of 15% or more in all five major areas of the market.
· The lowest median price for a condo in Park City continues to be in Prospector where the median price is up significantly but still hovers just above $300,000.
· The overall median price across all neighborhoods within Park City is up to $1.3 million, a 20% increase in the past year (up from $1.1 million).
· In the Canyons, the median price showed a significant increase, but this was the result of previous low prices set by the dominance of Yotelpad (with units at the lower end of the market) in previous quarters and a large number (118) of sales of Pendry Residences in Q1-22 at a much higher price point ($1.4 million) than Yotel ($386K). The average price of $1.0 million is in line with previous quarters that were not affected by Yotelpad and Pendry.
ON VACANT LAND:
· Land continues to appreciate at higher rates than existing housing due to the continuing adage that they’re not making any more of it. Across Summit and Wasatch counties combined, median sale prices were up nearly 80% from $365,000 the prior year to $650,000 per parcel.
· Total land sales for the 12 months ending 3/31/22 surpassed the $1 billion mark for the second time. For the previous year total sales were just under $800 million.
How long can this continue?
How long can Park City homeowners expect this explosive market to continue? They are starting to see some easing in prices as mortgage rates rise and competitive bidding becomes less frequent. But the past two years continue to be described with the most superlative of adjectives: “extraordinary,” “unprecedented,” “unbelievable.” This market, and the past two years of activity, can perhaps be best illustrated with a snapshot of just first quarter sales totals since the great recession of 2008.
In the 13 years from 2008 to 2020, looking at just first-quarter sales, the market total for residential and land combined exceeded $400 million only four times and three of those years it was just by a whisker.
In 2021 and 2022, not only was that ceiling broken, but sales were over $1 billion both years. Is this the new normal? Only time will tell. Economic forecasts are predicting a slowdown, but none has projected a bubble bursting crash back to pre-pandemic levels.
High demand and low inventories continue to drive price gains and sales records. There probably is no “new normal” on the horizon anytime soon. We are probably a year or two from a more stable and balanced market given current demand and continuing low inventory issues.
Real estate in the Wasatch back consists of highly segmented markets with nuances that vary significantly from one neighborhood to another and one house to another. Comparisons are hard to read on paper due to the unique features of individual properties, such as amenities, condition, style, location, age, view, and inventory. Buyers and Sellers are advised to contact a local Park City Board of REALTORS® Professional for the most accurate, detailed, and current information.