Anyone who pays attention to real estate trends knows that inventory is at record lows which is driving an increase in prices and creating somewhat of a panic among buyers.  (See my post from last week for the actual Park City Statistics ).  People who are seriously looking to make a purchase are frustrated by the number of multiple offers and homes that are sold before they even hit the multiple listing service.  There is an impulse to make an offer and “tie up” the first house that meets most of the buyer’s needs, even if that house doesn’t have everything the buyer wants.   Does this strategy make sense?

On today’s Park City multiple listing service there were 3 homes, including one of my own listings, that returned to active status after a failed sale.  The buyers of my listing paid for an inspection, radon test, and appraisal.  My guess is they spent no less than $1,000 for this due diligence.   The sellers were reviewing their options for finding a place to move into.  At the end of the due diligence period, the buyers backed out.  My listing was off the market for over two weeks.  My sellers are facing the reality that they need to “sell their house again”.  The buyers, who are not my clients, must also start over and find a new place to live.  The title officer, transaction coordinator, and all the other ancillary people involved in this transaction completed a lot of work that turned into a waste of everyone’s time.

An agent in my office remarked that he had sold one particular listing three times, with multiple offers each time.  Clearly the present strategy of tying up homes and then deciding if the buyer really wants to buy it is a losing strategy for everyone involved.  As a buyer’s agent, I would discourage a buyer from this strategy.  As a listing agent, I am going to work harder to ensure that a buyer is in love with the home before we take it off the market.

What are your thoughts on this issue?

Here is a quick snapshot of what is happening in the Park City real estate market:

Compared to the first quarter of 2012-

• Number of sales are up 17%.
• Sales dollar volume is up 28%.
• Best first quarter since 2007.
• Lowest inventory since 2006.
• 21% decrease in listings.
• Distressed properties (foreclosures and short sales) make up only 3% of active listings and accounted for 13% of sales compared to 13% of sales in the first quarter of 2012.
• Single family homes sales increased 18%.
• Median sale price of single family homes rose 30% to $619,500.  Median home price within Park City limits was up 12%.
• Condominium sales decreased 3%.
• Median sales price of condominiums rose 22% to $334,128.
• Vacant land sales increased 45%.  Median lot price dropped, but this decrease in price is not expected to last due to inventory constraints.

With interest rates at historical lows, today’s home buyer has 43% more purchasing power than they did in 2006, as reported by Rick Klein of Wells Fargo Home Mortgage.

If you are interested in learning more about a specific neighborhood or subdivision, please contact me at 435.901.0659 or nancytallman@gmail.com.

I read a really fun article in Forbes called “The Era of the $100 Million House” by Morgan Brennan Click here for the article

The article discusses the rise of $100 million homes for sale around the United States.  Here are some qualities shared by these mega estates:

1. Location.  The home must be in an expensive zip code.  Beverly Hills, Hillsborough, New York City, Miami, and Dallas all have listings in excess of $100 million.
2. Size.  The homes are typically larger than 10,000 square feet.
3. Amenities.  If you can conceive it, you can achieve it, given a large budget.  These homes have amenities such as ballrooms, 50-seat home theaters, private nightclubs, spas, and tennis courts.
4. Pedigree. Previous ownership by a famous person or if the home was the site of a famous event, is helpful.

We have a few such homes listed for sale right now in Park City.  The Huntsman Estate, the Ski Magazine Dream home and the home of a very famous producer are all located in Deer Valley and available for under $50 million.  Wow, what a deal!

In my last blog post, I mentioned that demand for homes in Park City was up 21% and inventory was down 26% during the first quarter of 2013.  I have been involved in several multiple offer situations this year, representing two different sellers and four different buyers.

How did my sellers choose among potential buyers?  Why did my buyers win?

1. Before you start looking for homes, get pre-approved for financing.  If you are paying cash, have proof of funds available.  If possible, work with a local lender who is trusted among Park City agents.  A seller is not going to select your offer unless they are convinced you are able to pay for the home.
2. If you find the perfect home, do not delay.  Write an offer and make it a good one.  This is not the market for lowball offers (unless you are sure the home is overpriced).  Ask for a quick response time from the seller.  Your objective is to get the house under contract before you are competing with other buyers.
3. If you find yourself in a multiple offer situation, you must ask yourself how it will feel if you lose the home of your dreams over $1,000 (which is about $3/month at a 4% interest rate).  Even $10,000 is only $33/month at the same interest rate.  In one deal I was involved with, the buyer wrote a counter-offer stating they would pay $5,000 over the next highest offer.   That buyer successfully purchased that home.
4. Work with a knowledgeable buyer’s agent who understands the market.  Your agent will let you know if you are paying too much.  A good buyer’s agent will “sell” her clients to the listing agent and give you the best chance of writing the winning offer.

Best of luck!

There is an adage in Park City that when the snow melts the “For Sale” signs sprout.  This is generally true, but this year seems to be different than most, due to a lack of inventory and an increase in buyer demand.

The first quarter of 2013 we closed 94 single family homes in Park City and the Snyderville Basin, compared to 78 during the same period in 2012.  What makes this statistic especially interesting is that while demand was up 21%, inventory was down 26%.

Rising demand means sellers are able to command more favorable prices and terms for the sale of their homes and, when priced right, their home is likely to sell faster than in years past.

I’ve been speaking with many people lately who are thinking of upsizing, downsizing or relocating.  My advice is that if you are thinking of selling your home, list it now, while the demand is high and the competition is low.

The median price of single family homes and condominiums in Park City is rising.

All real estate is local and pricing trends vary by neighborhood and even condominium project.

If you would like to learn more about the pricing trends in a specific neighborhood, please contact me.  Nancy.tallman@sothebysrealty.com or 435.901.0659.

What are the best things to do in Park City?  Everyone has different tastes.  My favorite thing to do in Park City may not be yours.  Wouldn’t it be great if you had the input of lots of different people?  Statistically speaking, the result would be more robust (accurate).

That’s why I love Tripadvisor.  When I travel, I pull it up, look at the hotel or restaurant reviews, and spend my time and money according to other people’s rankings.

I decided to see what people are saying about Park City.  Here, in order, is the best of Park City based upon the reviewers of Tripadvisor.

1. Deer Valley Resort.  No surprise here.  It was named the Number 1 ski resort in North America for 6 years in a row.  Reviewers commented on everything, including the food, grooming and service.
2. Park City Museum.  This was a surprise to me.  Guess I take it for granted because I live here and have been numerous times.
3. Park City Mountain Resort.  People love the terrain park, easy access and ability to ski to Historic Main St. for lunch.
4. Alpine Coaster.  Expensive but worth the price and the wait.
5. Utah Olympic Park.  Watch the Flying Ace All Stars and check out the ski jumpers practicing their jumps.  Fun for the family.
6. Canyons Ski Resort.  The food, terrain and size of the mountain make it a winner.  Much better since the owner sunk millions into improvments.
7. Egyptian Theater.  Intimate, informal and fun.  Not a bad seat in the house.
8. Utah Winter Sports Park (at UT Olympic Park).  Where else can you ride a real Bobsled?
9. Kimball Art Center.  Always interesting exhibits and free for the family.  The Arts Festival is not to be missed.
10. Gorgoza Park.  Lots of fun, especially for kids.  A great place to visit on your “day off” from skiing.

What are your favorite things to do in Park City?  Based upon this list, would you rely upon the reviews at Tripadvisor.com when planning a vacation?

One Hyde Park is a condominium in London where apartments sell for nearly $12,000/square foot.  Clearly this development is the ultimate in luxury that only the uber-wealthy of the world can afford.  Many of the residences are owned by off shore trusts making it difficult or impossible to track the actual residents.  The press has speculated owners hail from Kazakh, Russia, Ukraine, Britain, Nigeria, China, Saudi Arabia, and Qatar, but the developer will not confirm or deny this.

One Hyde Park boasts beautiful architecture and floor to ceiling windows to maximize views and light.  What other amenities attract billionaires?

The world’s wealthiest individuals require security and privacy.  In addition, they enjoy the bragging rights of owning one of the most famous and priciest apartments in the world.  There is a relationship between One Hyde Park and London’s Mandarin Oriental.  The Mandarin provides hotel amenities such as housekeeping, food and beverage, concierge, car cleaning and valet.

To cater to the owners’ privacy needs, there are private cocktail suites, cinemas and meeting rooms available.  There are even two private gyms for those who wish to work out in private.

Learning about One Hyde Park inspired me to think about similar properties in Park City and only one immediately came to mind:  The Montage Deer Valley.  Priced under $2000/square foot, The Montage seems like a bargain!  The Montage Deer Valley has owner amenities similar to One Hyde Park.  It’s location at Deer Valley, the number one ski resort in North America for six straight years, is exceptional.  Montage has already past $100 million in sales and has attracted the attention of international buyers.   Wealthy individuals around the world are always looking for a safe place to stash their cash.  My prediction is that we will see more of such buyers enter the Park City luxury real estate market. Of course, these individuals keep such a low profiles and have so many homes, their entrance into the Park City real estate market may not be noticed.

I work with real estate agents more frequently than the average person. The good ones save their clients plenty of money, heartache, and liability.  Capable agents make the transaction seem easy, while the client has no idea what is going on behind the scenes.

In today’s world, most properties for sale can easily be found on the internet.  Buyers do not need agents to locate properties for them.  Most buyers tell their agent which properties they want to see.  Whether they realize it or not, buyers need someone to make sense of the available properties.  Why is one home priced lower than another?  Why has a property been on the market longer than the others?  Why is one property a great opportunity?   Top agents have insider knowledge of their market.  They know which homes on the internet look good in photos but are hiding a terrible floor plan or a view of a wall.

Similarly, many sellers already have an idea of the comparable properties for sale in their neighborhood and a basic understanding of how their home should be priced.  The value that a top agent brings is an understanding of the finer points about pricing and an effective marketing plan that leverages electronic media, print media and high quality photography for maximum exposure.

Once a property is under contract, the real work begins.  Currently, many transactions fall apart due to inspection or appraisal contingencies.  Sometimes the buyer and seller cannot agree on which fixtures, furnishings or appliances are included in the sale.  An experienced agent will work closely with the lender, appraiser, and agent on the other side of the transaction to make sure that small issues do not turn into deal breakers.  All agents have a fiduciary responsibility to represent their clients.  The best agents will fight to make sure their clients’ best interests are met with respect to price and terms.

Top agents have a referral network of agents around the country, making relocations or second home purchases less stressful.  When one agent receives a referral from another, they take extra special care of the client to ensure the referral stream remains strong.

In short, today’s real estate market is not a “do it yourself” endeavor.  The best agents do much more than find properties and prepare comparative market analyses.  They bring market knowledge, analytical skills, negotiation skills and a host of diverse marketing activities to ensure their clients’ needs are represented to the fullest extent.

Two years ago my clients, Dr. and Mrs. Smith (not their real names, but the rest of the story is factual) purchased a condominium at Bear Hollow Village.  They paid $485,000.  They used the condominium for the past two summers and for family ski trips.  They donated a week at their condominium to various auctions.  When they weren’t using the condominium, they rented it.

Just before last Christmas, Mrs. Smith told me that she really wanted a single family home when her family visits Park City during the summer of 2013.  Her kids are active in sports and want a yard.  We listed the condominium and found a buyer in about 30 days.  We had multiple offers and sold the condominium for $490,000.

Just before the condominium closed, Mrs. Smith and I looked at some houses together.  She likes the Silver Springs neighborhood because of its large lots, mature landscaping and access to the Park City trails.  I showed her the home pictured above. We were the first of six showings scheduled that day and that was before the sign even went up in the front yard.  I told Mrs. Smith that she needed to write an offer immediately if she wanted that house.

That night the Smiths were under contract to buy the home.  When Dr. and Mrs. Smith applied for their loan, they learned that even though the home is worth nearly $100,000 more than the condominium, their payments are going to lower!  They are getting the house they want and their out of pocket expense each month is going to be less.

This may be the perfect time to move up.