I have been reading a lot of predictions for the United States real estate market. Here are the themes I see repeated:
- There will continue to be low inventory, creating a “sellers” market.
- Interest rates will continue to rise.
- This will impact first time homebuyers more than luxury home buyers, as luxury homebuyers tend to pay cash or put down a larger down payment.
- Rising interest rates will make it more difficult for current home owners with good mortgages to move up and pay higher interest rates
- Annual home appreciation will slow to about 3%.
- If the Trump administration cuts taxes, this could have a positive effect on the luxury home market.
- Real estate generally follows 7-year “boom and bust” cycles and we are nearing the end of a 7-year boom. Most experts did not see signs of a real estate crash looming in the distance. The days when people bought homes with no money down and could walk away are behind us.
How They’re Playing Out in Park City
I’m currently working with buyers and sellers in all different boats. One of my clients is selling an investment property now because she thinks this is a good time to be a seller. I have a couple of buyers who have benefited from the upturn in the economy. They are investing their money in Park City real estate as opposed to the stock market.
I’m also working with some retirees who want to downsize from a 6,000 sq. ft home and buying a smaller, easier-to-manage condominium. I’m working with others who are looking to buy their “last” home and want single level living.
Right now, inventory is very low in most Park City neighborhoods. But it’s a great time to be a buyer because there are fewer buyers competing for the existing properties. Springtime will give way to more inventory and more buyers. The excellent snow this season and the Vail Epic Pass are bringing many newcomers to Park City. Some of these people will inevitably fall in love with Park City and want to invest in a vacation home.
There will be a lot of new condominium inventory at the Canyons Village in the next 2 years, making the Canyons Village its own “micro market”. Purchasing a unit in an irreplaceable location with good views will be important to ensuring a good long-term investment.
My prediction for 2017 is that prices in Park City will be stable. Some micro-markets will do better than others. Because of our strong resort economy supported by Deer Valley and the Vail Epic Pass, we will continue to see second home buyers choose to make lifestyle purchases in Park City. In addition, we are a bedroom community to the Salt Lake Valley, which has the one of the best economies in the nation. Those high paying technology and biotech jobs will continue to bring qualified buyers into our full-time neighborhoods.