April, 2023 – As we approach the three-year anniversary of the outbreak of Covid-19, which sent the real estate market into contortions never seen before, the market in general is getting closer to “normal” – that is as “normal” has been redefined. Sales numbers are returning to pre-pandemic averages. Q1-23 sales totals were 5% higher than the average from 2013 to 2020. Sales prices are not. Total sales volume is 63% higher than the average from 2013 to 2020 because the lower number of units sold units were more than offset by ever increasing sales prices.
The market volatility experienced during, and immediately following, the Covid restrictions mirrors that seen leading up to the market crash and great recession in 2007-08-09. The Park City real estate market is reflecting trends seen elsewhere in the country, as business returns to a more “normal” seasonal pattern.
- Listing inventory is rising – At the end of Q1-2022 only 329 residential properties were for sale. By 4/1/23, that number rose to 746 (which was still only 65% of pre-pandemic average).
- Prices are starting to level off – One year ago, the overall median sale price of all properties (residential and land) was just under 1.1 million. Now, the median has risen to $1.3 million, 14% higher than 2022, but a whopping 50% higher than the same period in 2021.
- Mortgage interest rates are inching upward (again) – In late October, the average 30-year fixed rate was 7.08%. By the end of December, it had dropped to 6.48%. As of April 2023, it was 7.2%.
- Buyers are becoming more hesitant to make instant offers above the asking price and sellers are reacting by lowering those asking prices at a faster pace, but not by as many dollars. In Q4-22, 391 active listings (out of 1,100) or 35.5% saw at least one price reduction. In Q1-23 that number rose to 427 (out of 1,063) or 40%. Price reductions in Q4 averaged 5.7%, while in Q1-23, the average reduction was only 4.9%.
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 12-month period ending March 31 showed mixed results, with the average up 0.7% and median down 2.2%. For the year earlier, both increased 20% and 15% respectively.
The rate of sales (number of units sold) dropped 32% for single-family homes and 41% for condominiums from the year prior. Sales declines across the region were attributed to continuing high mortgage interest rates and low available inventory, with the latter being the prime driver. Agents cannot sell what owners will not offer for sale. Agents noted that the vast majority of homeowners still carrying a mortgage financed their purchases at rates from one-third to one-half below the current prevailing market rates, making them extremely reluctant to sell if they have to finance a replacement home elsewhere.
Park City neighborhoods vary widely in price comparison and the Q1-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 the 1st quarter of 2023 versus 2022. The exception was in the Jordanelle area where interest is growing in anticipation of the Mayflower Mountain resort project opening for the 2024-25 ski season. Sales in the Jordanelle area increased 71% over the previous year, albeit at a lower median price point of $1.6 million, down from $2.5 million the year prior. The drop in median sale price was attributable primarily to the Benloch Ranch development, where homes priced in the low 7-figures accounted for almost half of all sales in the area and more than offset higher priced developments like Tuhaye and Victory Ranch, where prices start at twice that figure and climb rapidly from there.
Condo sales across the entire market range followed a pattern similar to single-family homes. Total sales volume declined in all areas by 20% to 35% primarily due to a lack of inventory to sell. Also, owners of those few properties who were willing to sell were holding out for much higher offer prices. Within Park City limits, condo sales volume was down 35% but median sale price rose 19% to $1.6 million. In the Snyderville Basin, average and median prices rose by 15 to 20% respectively.
Buyers who bought vacant lots in years past with the intention of building in Park City found two to three years later that the cost of construction (both materials and labor) had increased, and supply chain issues remained so pervasive that they no longer wanted to build. Instead, they are putting those lots back on the market. But even those resales were not enough to boost available inventory. Vacant land in Park City proper was already in short supply. This was the only market sector that showed a decline in sale units, volume and prices across the board. Only 15 lots sold in Park City in the past year (down from 39 the year before) and sale prices dropped 10-12% over the same period.
Comparing the 12-months ending March 31, 2023, to the same period ending in 2022:
- Residential inventory (single-family and condo) year-to-date is showing signs of recovery after a lengthy period of declines. At the end of March 2022, there were just 317 residential listings for sale in the entire PCMLS coverage area. On March 31, 2023, that number had grown to 746, more than twice as many.
- The market is cooling off after an overheated two years of sales. PCMLS members signed 1,918 purchase contracts in for the period ending 3/31/23, 42% fewer than the previous year (3,347).
- With New Listings running slightly higher than Pending contracts, inventory is being replaced faster than it is selling. For the 12 months ending 3/31/23, 2,888 listings were added to the system. For the same period only 1,918 were put under contract. That’s 970 more listings added than contracts written.
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 March 31, 2023. (Note: only areas with 10 or more sales are considered in the tally and reporting.)
Single Family Homes
The number of units sold across the primary market area (Summit & Wasatch counties) dropped 32%. A 2% decline in the median sales price to $1.55M contributed to the 31% drop in total sales volume. Through Q1-23, the $2.05 Billion in total sales was down from the Q1-22 Y-o-Y total of $2.99 Billion.
Highlights of the single-family home market:
- Within Park City limits, total unit sales were down 47% over 2022 to 96 units but sales volume declined just 45% to $426 million this year.
- The median price of a single-family home within Park City limits rose 11% to $3.9 million.
- In the popular Old Town area, unit sales were half of the previous year (50 to 26) as the median price set a new record above $3.98 million (+34%).
- Snyderville Basin residences followed the prevailing market with sales volume (down 35%) on a modest gain in the overall median price up 4% to $2.06 million.
- All but one Snyderville neighborhood (Silver Creek South) saw declines in units sold, with Jeremy Ranch dropping the most (62%) to just 20 units. Silver Creek South had the only gain with 44 homes sold, nearly five times as many as in the previous year, thanks to a large number of new construction happening in Silver Creek Village. One-third of overall sales volume in the Basin was in Promontory ($264 million).
- Jeremy Ranch and Glenwild tied for the biggest price increases with the median rising 39% in each. The median sale price in Jeremy Ranch rose to $2.6 million while Glenwild climbed from $4.4 to $6.2 million. Canyons Village held on to the top position with a median price of over $11 million.
- Among the outlying areas, the Kamas Valley showed a substantial median price increase of 47%.
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 32%, while prices were steady but mixed.
| Single Family Summary End of Q1 2023 | Qty Sold | % Chg | Sales Volume | % Chg | Average Price | % Chg | Median Price | % Chg |
| Park City | 96 | -47% | 426,146,937 | -45% | 4,439,030 | 4% | 3,913,380 | 11% |
| Snyderville Basin | 269 | -39% | 806,234,339 | -35% | 2,997,153 | 6% | 2,060,000 | 4% |
| Jordanelle | 147 | 71% | 323,393,014 | 37% | 2,199,952 | -20% | 1,650,740 | -35% |
| Heber Valley | 217 | -41% | 310,439,667 | -38% | 1,430,597 | 6% | 955,000 | 0% |
| Kamas Valley | 92 | -38% | 145,104,540 | -25% | 1,577,223 | 22% | 1,220,254 | 22% |
| Wanship/Hoytsville | 46 | -2% | 43,894,650 | 0% | 877,893 | 2% | 690,000 | -2% |
| Total Primary Market Area* | 871 | -32% | 2,053,503,149 | -31% | 2,357,639 | 1% | 1,549,630 | -2% |
| Total Overall MLS Area | 1,013 | -31% | 2,224,109,914 | -30% | 2,195,568 | 0% | 1,430,000 | -2% |
* Primary Market totals include only Summit and Wasatch counties.
Condominiums
The condominium market across the entire Wasatch Back continued to report even more and larger median price increases than did the single-family market. Every major area across the region reported increases of 10% or more, with the overall median increasing by 23%.
- family numbers, with unit sales and volume down on a gain in median price of 41%. The median price of a condominium sold in Old Town is now $1.26 million.
- Price gains were fairly consistent in all neighborhoods, with Deer Crest leading the gainers with a 67% increase to more than $5.0 million. Old Town, Upper Deer Valley, and Prospector led the gainers, up 38% or more.
- In the Snyderville area, outside of perennial volume leader Canyons Village, Pinebrook and Kimball Junction led in sales volume ($45M and $39M respectively).
- In Wasatch County, (areas where 10 or more sales are reported) Jordanelle Park showed the largest gains in sales volume over the prior year (up 48%) despite a decline in median price, down 17% to $805,000.
| Condominium Summary End of Q1 2023 | Qty Sold | % Chg | Sales Volume | % Chg | Average Price | % Chg | Median Price | % Chg |
| Park City | 257 | -43% | 529,807,373 | -35% | 2,061,507 | 13% | 1,600,000 | 19% |
| Snyderville Basin | 355 | -42% | 441,618,348 | -33% | 1,243,995 | 15% | 1,013,000 | 20% |
| Jordanelle | 200 | -32% | 220,070,419 | -19% | 1,100,352 | 19% | 986,772 | 18% |
| Heber Valley | 28 | -50% | 19,474,000 | -33% | 695,500 | 33% | 470,000 | 10% |
| Kamas Valley | 2 | -33% | 1,260,000 | -17% | 630,000 | 25% | 630,000 | 15% |
| Total Primary Market Area* | 842 | -41% | 1,212,230,141 | -32% | 1,439,703 | 14% | 1,093,620 | 23% |
| Total Overall MLS Area | 874 | -41% | 1,231,207,142 | -32% | 1,408,704 | 14% | 1,055,948 | 22% |
* Primary Market totals include only Summit and Wasatch counties.
Vacant Land
After the explosive growth we saw in 2020 (up 158% in sales volume) and 2021 (up 73%) this past year land sales slowed with overall volume dropping 41% in the primary market area. Every major area showed drops in units sold. Total sales volume dropped in all areas except Wanship/Hoytsville where sales volume was up 68% on prices that nearly tripled from the year prior. The bulk of these sales were in the new Wohali development near Coalville, which featured multi-acre lots selling for more than $1 million each.
- Jordanelle showed the most activity selling 274 lots this past year. The median sale price was $700,000, up slightly from the year before.
- Overall land sales in Summit and Wasatch counties were down 48%, as supply decreased. But prices remained unchanged, having settled at a median of $650,000.
- All the major areas of the market saw a drop in units sold. Snyderville and Heber Valley were hit the hardest, dropping by more than half from the previous year’s total.
- Only 15 lots sold within the Park City limits, but that lack of available lots coupled with high demand kept the median sale price for the few that did sell just below $2 million.
| Land Sales Summary End of Q4-2022 | Qty Sold | % Chg | Sales Volume | % Chg | Average Price | % Chg | Median Price | % Chg |
| Park City | 15 | -62% | 30,569,000 | -66% | 2,037,933 | -12% | 1,935,000 | -10% |
| Snyderville Basin | 76 | -64% | 109,301,500 | -61% | 1,438,177 | 7% | 1,150,000 | 28% |
| Jordanelle | 274 | -31% | 270,335,470 | -26% | 986,625 | 8% | 703,850 | 1% |
| Heber Valley | 91 | -61% | 68,820,200 | -54% | 756,265 | 19% | 465,000 | 11% |
| Kamas Valley | 51 | -50% | 23,116,900 | -70% | 453,272 | -41% | 350,000 | 0% |
| Wanship/Hoytsville | 39 | -26% | 24,500,125 | 68% | 628,208 | 128% | 400,000 | 150% |
| Total Primary Market Area* | 545 | -48% | 524,243,195 | -47% | 961,914 | 2% | 650,000 | 0% |
| Total Overall MLS Area | 585 | -47% | 576,453,425 | -45% | 985,390 | 4% | 650,000 | 0% |
* Primary Market totals include only Summit and Wasatch counties and are not totals for all areas.
Opinions and Observations
What do Park City agents see coming in the next year? 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.
- The “normal market” was established during a period of low volatility, 2013 through 2019. The Covid years of 2020-21 were an anomaly. Now we are returning, albeit slower than we would like, to that normalcy. It might take another year, but barring some economic catastrophe (national debt default looms large), the market should settle back to its normal pace by the end of 2023.
- Inventory has improved significantly but remains 1/3rd less than pre-pandemic levels.
- Prices are still rising but at a much slower rate than they have been the past two years.
ON SINGLE FAMILY HOMES
- Very few owners are willing to give up their 3% mortgages by selling when they have to re-buy at 6-7% money. This will continue to create downward pressure on inventory.
- Lower priced homes are more sensitive to interest rate fluctuation than higher priced homes. Over 50% of sales in Summit County are cash buyers.
- Nationally, 99% of existing mortgage loans are financed at under 6%. 85% are under 5%, 28% are under 3%. With current rates hovering around 7%, many homeowners are reluctant to sell knowing they would have to finance their replacement home at up to twice the rate on their current loan.
- There is significant inventory being planned not only in Heber Valley but in Summit County, as well. There are over 150 homes in some stage of construction in Promontory and 130+ in Tuhaye. Look for a jump in activity around Heber City, particularly to the north of town where there is significant new construction happening.
- Short term weather events usually don’t influence long range investments (e.g. housing), but the extraordinary winter this year in Park City has prompted some who purchased homes here during the pandemic uptick to now reassess the wisdom of those purchases and think about selling.
- On the other hand, news of record snowfall and superb powder skiing radiates out to the entire country and may be attracting more buyers who want to be closer to the action. As interest rates continue to drop, more and more of these potential buyers are expected to enter the market.
- The Park City market is highly segmented, with each neighborhood having unique values and unique pricing trends. Even within one neighborhood, prices can vary widely based on many factors. For example, in Glenwild, sales of homes around the golf course in the southern half of the community had a median sale price per square foot of $990, while those in the northern half were one third lower, at $670/sq.ft. despite being about the same size (6,800 sq.ft. on average). Hyper-local knowledge is becoming more important to the buying (and selling) process.
| 4/1/21-3/31/22 Full Year | 4/1/22-3/31/23 Full Year | Changes Year over Year | ||||
| Units | Volume | Units | Volume | Units | Volume | |
| SFH | 1,460 | 1,042,129,430 | 1,013 | 576,453,425 | -31% | -45% |
| Condo | 1,474 | 1,819,271,358 | 874 | 1,231,207,142 | -41% | -32% |
| Land | 1,097 | 1,042,129,430 | 585 | 576,453,425 | -47% | -45% |
| TOTAL | 4,031 | 3,903,530,218 | 2,472 | 2,384,113,992 | -39% | -39% |
| Res Combo | 2,934 | 2,861,400,788 | 1,887 | 1,807,660,567 | -36% | -37% |
Despite all the red numbers (declines) in unit and volume of the most recent 12 months compared to previous periods, if we look at first quarter numbers compared to prior years, the report is very optimistic. Although total sales in Q1-23 are markedly below the same quarter in either 2021 or 2022, they are 5% higher than the average of the “normal” period from 2013 to 2019. (Charts and observations courtesy of Rick Klein.)
The Park City market continues to appreciate as sale prices continue what seems like a relentless climb ever higher. How long can that last?
Looking at combined sales, the chart at the right shows the steady rise in prices since the market downturn from 2008 to 2011. The increase from 2021 to 2022 was about 7%, slightly higher than our historic norm of 6.8% annual growth. In the most recent 12 months, the increases have been twice that rate, 14.2%. Real estate in the Wasatch Back looks like a very strong investment over the long run with no signs of slowing down.
What are the key takeaways from this quarter’s numbers? Here are Rick’s summary points:
- Demand is slowing. Pended sales for Q1 are down 20% from “normal” while closed sales for Q1 are down 38% from Q1 2022 but remain 5% above “normal.”
- Inventory has improved significantly but remains one-third less than pre-pandemic levels.
- In Park City, price gains are just starting to decelerate and remain 14% higher than a year ago.
- The effects of the pandemic seem to be behind us. We are seeing a new normal, with the market settling into a stable, predictable period of steady growth.
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.