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.
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