July, 2023 – The Park City real estate market continues its progressive return to a more normal market in the continuing aftermath of the Covid-19 pandemic.

The first reported case of Covid-19 was on January 20, 2020 with the first confirmed case coming six days later. Just 51 days later, on March 11, the World Health Organization declared a global pandemic and the real estate world went into a tailspin. Active listings fell from over 2,000 to only 600, with barely half of those being residential listings. In reaction to declining inventory, average residential sale prices climbed by 50% over the next two years.

In 2023, second quarter sales totals for single family homes in Summit and Wasatch counties were 13% higher than in first quarter, with unit sales climbing 22%. Sales prices are a different story. The median home sale price in the PCMLS primary market area dropped from $1.66 million in Q1 to $1.59 million, a decline of 4%.

The market volatility experienced during, and immediately following, the Covid crisis has abated considerably. 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 Q2-2022 only 858 residential properties were for sale. By Q2-23, that number rose to 1,030. That’s still short of the 1,100 active listings in pre-pandemic time (January 2020) but moving in the right direction.
• Prices are starting to level off – For the 12 months ending 6/30/22, the overall median sale price of all residential properties was 1.6 million. For the same period ending 6/30/23, that price was $1.57 million, a drop of just 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. In Q2-22, 519 active listings saw at least one price reduction. In Q2-23 that number rose to 608. Some listings reported multiple price adjustments.

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 June 30, showed mixed results, with the average down 3.0% and median down 2.1%. For the year earlier, both increased 15% and 11% respectively.

The rate of sales (number of units sold) dropped 33% for single family homes and 43% 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 noted that the large 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 Q2-year over year results continued that pattern.

For single family homes, all but two of the major areas that make up the greater Park City market showed drops in units sold through the 2^nd quarter of 2023 versus 2022. The exceptions were 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 Tuhaye area more than doubled over the previous year, on average prices just over $3 million. The other boom happened in Silver Creek South, where the Silver Creek Village continued to be a beehive of activity. Sales units nearly quadrupled (from 12 to 47) on pricing that climbed from the high six-figures to about $1.1 million.

Condo sales across the primary market range followed a pattern similar to single family homes. Total sales volume declined in all areas by 36%, 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 the Park City limits, condo sales volume was down 24% but the median sale price rose 24% to $1.7 million. In the Snyderville Basin, the average sale price only rose by 2% to $1.2 million.

Comparing the 12 months ending June 30, 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 June 2022, there were just 858 residential listings for sale in the entire PCMLS coverage area. On June 30, 2023, that number had grown to 1,030.
• The market is cooling off after an overheated two-plus years of sales. PCMLS members signed 1,676 residential purchase contracts for the period ending 6/30/23, 33% fewer than the previous year (2,515).
• With New Listings running slightly higher than Pending contracts, inventory is being replaced faster than it is selling. For the 12 months ending 6/30/23, 2,790 listings were added to the system. For the same period only 1,676 were put under contract. That’s 1,114 more listings added than contracts written.

Single Family Homes

The number of units sold across the primary market area (Summit & Wasatch Counties) dropped 33% year over year, but increased 22% quarter over quarter. The short term gain probably indicates a trend of increasing sales that would show in the year-over-year totals in coming quarters. A 2 to 4% decline in the median sales price to $1.5M contributed to the 35% drop in total sales volume. Through Q2-23, the $1.85 Billion in total year-over-year sales volume was down from the Q2-22 Y-o-Y total of $2.86 Billion.

Highlights of the single family home market:

• Within Park City limits, total unit sales were down 44% to 90 units. Sales volume declined 45% to $389 million this year.
• The median price of a single family home within Park City limits fell 8% to $3.4 million.
• In the popular Old Town area, unit sales were barely more than half of the previous year (42 to 24) as the median price climbed 20% to $3.77 million.
• Snyderville Basin residences followed the prevailing market with sales volume (down 39%) on a modest gain in the overall median price up 3% to $2.05 million.
• All but one Snyderville neighborhood (Silver Creek South) saw declines in units sold, with Jeremy Ranch dropping the most (55%) to just 17 units. Silver Creek South had the only gain with 47 homes sold, nearly four times as many as in the previous year, thanks to their price point as well as a large number of new construction units happening in Silver Creek Village. One-third of overall sales volume in the Basin was in Promontory ($264 million).
• Silver Creek South also had the biggest price increase with the median rising 29% to $1.1 million.
• Canyons Village held on to the top position with a median price of over $9 million.
• Among the outlying areas, the Jordanelle area showed the greatest median price increase of 13%.

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 35% less, while prices were steady but mixed. 

* 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%.

• The Condo market in the Old Town neighborhood paralleled the single family numbers, with unit sales and volume down, despite a gain in median price of 36%. The median price of a condominium sold in Old Town is now $1.35 million.
• Price gains were evident in all neighborhoods, with Upper Deer Valley leading the gainers with a 151% median price increase to more than $4.5 million.
• In the Snyderville area, outside of perennial volume leader Canyons Village, Pinebrook and Kimball Junction led in sales volume ($33M and $34M 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.

* 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 57% 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.

* 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 few 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.

• Price fluctuations vary widely from neighborhood to neighborhood. In some areas, the median sale price is down as much as 25%, but in an adjoining neighborhood they may be up 20% or more. Buyers should not interpret broad market trends as applicable to a particular neighborhood in which they are interested.
• While supply and demand always come into play in real estate, the broader fears of inflation and recession coupled with higher mortgage interest rates are affecting the market and will continue to do so in the near term.
• The local market traditionally picks up pace during July through September. We expect this year to be similar.
• Homes in the $2 to $3 million range are not selling as well as they have in the past, which we attribute to high interest rates. Under $1 million we are seeing more first-time buyers and 1031 exchanges.
• Inventory has improved significantly but remains 1/3rd less than pre-pandemic levels primarily because of the high interest rates. Owners with an older mortgage at 3% or less can’t sell unless they can pay cash for a replacement home.  
• On the other hand, the mortgage you get today at 7% can be refinanced in a year or two when the rates drop back down to more “normal” levels. So, you won’t be paying that high rate forever.
• Prices are still rising but at a much slower rate than they have been in the past two years.
• The Park City market has been and will continue to be highly segmented, with each neighborhood having unique values and unique pricing trends. Even within one neighborhood, prices may vary widely based on many factors. Hyper-local knowledge is becoming more important to the buying (and selling) process.
• Shadow inventory has long been a factor in housing. Now we are seeing shadow buyers – people who come to the area and rent while they evaluate the market and decide what and where they want to buy. Then when a new listing comes to market that matches their wish list, they are quick to snap it up. That is why we are seeing high end listing go under contract in just a few days.

Comparing Market Segments year over year:

Despite all the red numbers (declines) in unit and volume of the most recent 12 months compared to previous periods, if we look at second quarter numbers compared to prior years, the report is very optimistic. Although total sales in Q2-23 are markedly below the same quarter in either 2021 or 2022, they are only 25% lower 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 2023 was about 22%, slightly higher than our historic norm of 6.8% annual growth. In the most recent 12 months, the increases have been barely one-third of that rate, 7.9%. This is much closer to our usual or “normal” rate of appreciation. 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 take-aways from this quarter’s numbers?

• Demand is slowing.  Pended sales for Q2 are down 30% from Q2 2022 but down only slightly from Q2-2020, indicating a trend toward more “normal” sales rates.
• Inventory has improved significantly but remains one-third less than average 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.