Buyers for mid-range homes can't get loans
by Andrew Kirk, OF THE RECORD STAFF
Posted: 05/05/2009 06:25:58 PM MDT
As predicted, real estate sales volume was way down this spring according to the First Quarter Report from the Park City Board of Realtors released this week.
Sales volume in the first quarter was $146.4 million as compared to $321.3 million the same time last year in Summit and Wasatch Counties.
The number of sales transactions fell to 166, down 55.7 percent from 375 transactions a year ago, according to the report.
Park City proper accounted for a larger percentage of those overall sales, and the Snyderville Basin accounted for less. Single-family homes accounted for a larger percentage of overall sales, condominiums were less. Land sales were way down and only accounted for 10 percent of the total sales, says the report.
In a written statement, Board president Lincoln Calder called land sales "almost non-existent."
The median price of a single-family home in Park City was actually up, but the figure was skewed by the sale of multi-million-dollar homes. Single-family homes in the Basin dropped about $32,000 to $714,500. Heber saw a significant drop from $394,950 to $275,000.
Condominium values (determined by median sale price) in Park City and the Basin so dropped significantly. In Park City they fell from $1.1 million to $742,500. In the Basin, they dropped from $492,000 a year ago to $354,500 in the first quarter, according to the report.
In an interview Monday, Lincoln Calder said the significant drop in median price of Basin condominiums is partly due to too much inventory and fewer people buying condominiums as second or third homes.
The drop of median home prices in Heber is partly due to a larger number of foreclosures and short sales in Wasatch County.
Calder attributes the declining numbers to the financial sector. Families seeking to purchase modestly-priced homes for primary residences are receiving tax credits and other federal assistance to get loans. People purchasing multi-million-dollar homes can usually afford to write a check. But buyers seeking jumbo loans for homes priced between $750,000 and $2 million aren't getting them, he said.
That's making it difficult to sell a ski-in-ski-out condominium, he explained.
More single-family homes are selling than condominiums because real estate investors and vacation-home buyers are delaying those purchases.
"People changing residences, changing lifestyles still come," he said. "It's a testament to Park City being a real town where people live, work and play."
Second-home buyers are out there, but they're waiting for the economy to improve to make major purchases.
"People will then see that there's pent-up demand," he said.
Calder said short sales and foreclosures in Summit County have increased, but not significantly and are "not alarming." Realtors are also sticking around. The Board saw a 20 percent decrease in membership renewals, but it isn't getting worse and that's pretty normal compared to the nation, he said.
Broker Jim Lewis with Summit Sotheby's International said everyone is sharing the pain, but it gives him hope that Park City appears to be faring better than other mountain resort towns.
"We're the best of a bad lot," he said.
He also believes things are getting worse at a slowing rate, suggesting a bottom is near.
One problem is potential buyers are looking for drastic mark downs, but owners are holding steady, he said.
Wasatch County Recorder Elizabeth Palmier confirmed that her office is seeing more foreclosures than normal.
"There's definitely a lot more postings for trustee sales then we've ever had," she said.
But Wasatch Assessor Glen Burgener doesn't believe foreclosures are lowering home values market-wide.
High-value homes pushing $1 million are at risk, he confirmed. But "arm-length" sales between willing buyers and willing sellers are normal.
"Home prices are not down," he said.
The lack of land sales is having a ripple effect on residential home construction.
Park City Area Home Builders Association president Jared Rakisits said anecdotally it appears everything is slow.
"Judging by how things feel and an informal survey, we're definitely slow this year. There's not much going on," he said.
Because homes take several months to build, the association is worried about the outlook for the 2010 Showcase of Homes with so little inventory under construction.
"There's not a lot of activity at all ranges right now. There is some in all ranges, but not a lot," he said.
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