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“Has Chicken Little Struck Again or Is the Sky Really Falling?”

By
Real Estate Agent with Summit Sotheby's International Realty

Greetings from Park City, Utah.

 "Has Chicken Little Struck Again or Is the Sky Really Falling?" 
The latest UCLA "Anderson Forecast" stated the nation's economic performance was "near recession".  Many of the report's dire predictions were picked up by the media, including: 

  • An expected drop in home prices through the end of 2009, particularly in Florida, California, Arizona, Nevada and parts of the Northeast. 
  • Fewer qualified home buyers as mortgage lenders lean towards full documentation, larger cash down payments and higher income standards. 
  • Working families with "middle-of-the-pack home prices and extremely high usage of adjustable-rate mortgages" would be most susceptible to foreclosures.

What do these predictions mean for the real estate market in Park City, Utah?

  • According to statistics provided by the Park City Multiple Listing Service:
  • The average sale price for homes, condominiums and land in Park City is higher in 2007 than 2006. 
  • Less property was sold in 2007 than 2006.
  • Less property was listed for sale in 2007 than 2006.   As the number of sales dropped, the inventory dropped by an even greater percentage.       

My analysis of how the Anderson Forecast predictions will play out different in Park City vs. the nation is as follows:

  • Owners in other parts of the country may be forced to sell their homes, even at a loss.  Park City owners have the staying power to hold onto their property until conditions are favorable for selling.  
  •  As a bedroom community to Salt Lake City, [which is experiencing a robust economy], and a premier 4-season resort community, Park City continues to see an influx of buyers entering our real estate market.  I have heard that as many as half of theses buyers pay cash.  Clearly, Park City will be somewhat buffered by the current mortgage debacle.
  • The average sale price for Park City homes is now over $1,000,000.  Working families with "middle-of-the-pack home prices" do not make up a large segment of our real estate market.

In my opinion the proverbial sky is not falling in Park City real estate market, no do I expect it to.  We will continue watching the real estate market and keeping our clients informed. 

Please do not hesitate to contact us with your real estate questions and concerns.

Comments (5)

Rob Lang
At Home Kansas - Shawnee, KS
Local Expert in NE Central Kansas Real Estate Home

For the hard working it is business as usual and for the rest the sky may be falling. 

Rob

Sep 29, 2007 05:00 PM
Jason Schweiger
Modus Mortgage - Auburn, WA
Loan Originator: Modus Mortgage
You are fortunately in an area that is doing much better than a lot of other areas. Good info. kepp up the good work!
Sep 29, 2007 05:01 PM
Ki Gray
Austin, TX
Austin Real Estate
That is interesting that sales fell and listings fell at the same time.  That is the first time I have heard of that.  Is Park City a retirement community?
Sep 29, 2007 05:01 PM
Brett Noel
Keller Williams - Paso Robles, CA
I live in Southern California and have never seen their report accurate, so no need to worry
Sep 29, 2007 05:37 PM
Chris Griffith
Downing-Frye Realty, Bonita Springs, FL - Bonita Springs, FL
Bonita Springs Listing Specialist - Agent
I think chicken little got nervous when our NAR representative didn't know his facts and figures on national TV with Jim Cramer.  What a freeking nightmare.
Sep 30, 2007 12:24 AM