The 123.1 Million dollar sale of The Canyons Resort is reported to have been completed yesterday June 30, 2008.  The purchase price is reported to have been $52.1 million in cash and $71 million in senior secured notes to American Ski Company.             The sale should put an end to Vail Resorts attempt to purchase the resort although Talisker does retain an option to sell the resort at a future date.  Talisker will assume responsibility for pending litigation by The Canyons Resort’s former owner Wolf Mountain which claims that American Ski Company defaulted on its lease and that the property should go back to Wolf Mountain.

            Talisker plans to keep the current management team of The Canyons Resort in place with Mike Gore as the managing director.  There are no plans currently for any major upgrades to the mountain as it is already too late in the summer and planning process to start improvements for the 2008-2009 snow season.  There are currently plans for some access lifts to be completed this summer.

            Talisker officials stated that they will begin looking at the resort’s development master plan soon. The sale of the resort includes as much as 3 million square feet of developable real estate located at the base of the resort as well as mid-mountain.  Talisker will run the resorts 3700 acres under a lease agreement with Wolf Mountain (this lease is a major portion of what Talisker has purchased from American Ski Company).

            Talisker is a privately held corporation that owns over 10,000 acres in and around Park City.  They are the developers of the luxury residences at the Empire Canyon area of the Deer Valley Resort as well as the Tuhaye golf resort just outside of Park City.  The Canyons Resort has made great strides in recent years opening new terrain and offering new real estate opportunities in the Park City area.  The sale of the resort to a luxury resort owner/operator should benefit the area and its surroundings.

           For information on how this may affect your property or future property aquisitions usr the contact us button at the top of the page.

          One of the most commonly asked question a Park City REALTOR® gets asked is “how is the market?”  We’ve written about this before in the YouInParkCity.com blog, but we think it deserves to be said again.  “It really depends on where you are and what you are trying to accomplish in terms of buying, selling or investing, but most important is the idea that all real estate is local.

          We’ve noticed some recent Park City numbers that reinforce this point on a local neighborhood level.  The Silver Springs real estate area in Park City, Utah currently has 19 active single family home listings.  During the month of May, 7 single family homes were put under contract and 1 sale closed (given the average under contract / pended times, the others should close in June).  This represents quite a lot of activity in this neighborhood.  So the answer to the “how’s the market?” question could be “great” or “hot”.

          To the contrary, we can look at the available homes, new pending sales and closed transactions for the Promontory neighborhood in Park City:  There are currently 63 active single family home listings in this real estate area, zero went pending in the month of May and only 3 have gone pending this year.  So, the answer to the “how’s the market?” question might be “tough”, “slow”, or “a Buyer’s market”. 

          These two real estate markets are both part of Park City real estate and tell very different stories.  The idea that all real estate is local can be narrowed even further than this may suggest.  It may be the perfect view of the ski run, access to a great running trail, or proximity to a local school that makes a home “perfect”.  These limiting factors bring about scarcity and drive demand.

          The “perfect home” that you want may be represented by only a few possibilities in a given neighborhood, and the fact that one is currently available may make it the right time to buy. 

          “How is the market?” is really determined by what is available in a given local area.  Think of this in terms not only of a state, county, or city, but down to specific neighborhoods and even streets and which side of a particular street.

          For information regarding your present or future home in the Park City area; contact http://www.youinparkcity.com/ .

 submitted by Todd Anderson

Data mentioned herein was taken from the Park City MLS on May, 30, 2008 deemed accurate and reliable, but not guaranteed.    

          Admittedly, when I read the article, “Don’t Fear Falling Prices”, published in Daily Real Estate News back in February 2008, I had a knee-jerk reaction (although I consider myself rather open-minded).  My initial reaction was one of seeing this work as just another suspect notion on the elaboration to justify the “falling” real estate market.  However, something prompted me to go ahead and bookmark this piece into My Favorites file allowing me to weigh on its content at a later date.  For the last three months, this article has continued to “nag” me like a missed birthday, and I find myself continuing to go back to reevaluate it.  You may by now be asking about its content, so let me insert it here for your reading pleasure:

 Daily Real Estate News  |   February 22, 2008

Don’t Fear Falling Prices
Yale Professor Robert Shiller, whose Case-Shiller 20-city home price index has become an industry standard, says people shouldn’t fear gradually falling home prices.”There’s nothing troubling about a gradual correction of home prices. If we keep our incomes at the current level and home prices go down we are richer, we can buy more housing,” Shiller says.But if home prices fall suddenly, Shiller says that could undermine housing as well as consumer confidence and the economy.There has been a misperception that houses will constantly appreciate, Shiller says. “Sometimes people will try to imagine that we can have both high home prices and affordable housing. But I can tell you that doesn’t add up,” he says. “You either have high home prices or lower home prices. And lower home prices are what we want, and people shouldn’t be afraid of that,” Shiller says. “Most of us care about our children and grandchildren, and these people have to buy houses so why would we want high home prices? We want economic growth, we don’t want high home prices.”

Source: Reuters News, Lynn Adler (02/21/08)

          Now for my surrender announcement: After talking to agents in both the Park City real estate market and in the markets of the Southern states (where I spend my spare time), I’m finding a variable that basically ties into this article.  This variable is the first time home buyer, first time “second” home buyer, and the first time real estate investor into rental property.  These are the folks that are emerging onto the “new” real estate scene.  The “why” and “how” behind this increase is (you’ve guessed it) lower home prices and the overall lower mortgage interest rate available.  There is indeed substance behind what we realtors are seeing as a “slower” market.  With that said, if you’re considering your first adventure into the real estate market know that we’re here to serve your needs at http://www.youinparkcity.com .   I’ll close by saying, I’d like to thank Professor Robert Shiller, for forcing me to expand my evaluation methods of looking at the glass “half empty/half full” theory, therefore allowing me to become a better real estate professional.  

by Cathy Ritchie

 Park City Real Estate Market First Quarter 2008 results are in.

          Utah and Park City have been some of the last areas to feel the decline of the U.S. real estate market.  Recent Board of Realtor statistics show that Park City real estate prices have held steady during the first quarter of 2008. During the first quarter, the number of listings has doubled and actual number of sales have fallen 45%. Single family homes sales fell from 209 in the first quarter 2007 to 113 first quarter 2008.  Condo sales fell from 247 to 136 in 2008. 
          While all these numbers can be very discouraging, you must look at each area independently.  Many of the larger developments have seen sales decline, while some of the established areas sales have held steady.  Several areas like Jeremy Ranch, Pinebrook and Silver Spring that have the ability to attract buyers who want to live in the Park City area but commute to Salt Lake City as well as those who want to live here for the skiing, hiking biking and golf have shown great resilience to the recent market changes.
         For Buyers, things have never been better.  There are more choices today than ever before (note the increased inventory mentioned earlier). Financing is currently very attractive for qualified buyers (current interest rates remain very low). Additionally, the maximum conforming loans limits have recently been increased to $749,750 for Summit County.  These new limits will revert back to the old limits at year’s end. 
          Sellers today, on the other hand, do need to be realistic and flexible in their pricing expectations.  While the market has softened, we have found that properties that have been priced to reflect today’s market have been selling.  The average “Days on Market” of sales have been less than 45 days recently for Mike and Ken’s listings with http://www.youinparkcity.com/   
         Experts suggest that while Park City and the state of Utah were some of the last real estate markets to feel the decline and are projected to be on of the first to recover and that declines will not be as sharp as many other areas in the nation. 

          Short sale and foreclosure property always seem to catch people’s attention.  The idea of really getting a “steal” on property peaks investor and home-buyer interest.  While a short sale can be a great deal, there are a few things to consider before you go searching for that “steal”. 

          First we should define a short sale.  A short sale is a sale of property in which the sale price is less than the value of the loans against the property.  Short sales can be initiated by the seller (property owner), but must be approved by the parties with loans which are using the property as collateral.   The purpose of the short sale is to try and sell the home before it is foreclosed upon (lenders tend to lose more money in a foreclosure sale than a short sale).

          The parties on the selling side are losing money in the deal.  The seller is losing whatever equity they had in the property (unless they got in with some type of “exotic” loan with no money down or cash out at the original loan origination (in this event the seller may not be losing real money, but is still damaging their credit)).  The lien-holders are losing whatever money that was their original loan less the sale price.  Secondary lien-holders stand to lose nearly all of their loan amounts.   All of these parties have to agree to take their losses.  None of them wants the loss and few of them want to admit they made a bad loan.   The loss that a 1^st mortgage holder is willing to accept is generally about 20%-40% (they usually stand to lose as much as 60% in a foreclosure).   Second or junior lien-holders also have to approve the sale.  If in anyone’s judgment the sale price is too low, they can refuse or send a counter-offer back to the Buyer.

          Timing may be the most confusing and frustrating issues that short sales present.  Unlike a normal offer and acceptance type of negotiation, once the offer has been accepted by the seller, the contract must be approved by all parties holding liens on the property.  These parties do not respond in a timely manner.  There is often quite a bit of bureaucratic “red tape” to get through in approving a short sale and just finding the correct representatives that can approve the sale can be very frustrating.   And while this process may take months (this is not an exaggeration) for the “third parties” to get approval back to the buyer, they will then ask for a closing within days. 

          This timing issue means that as a Buyer, you need to keep from getting emotionally attached to the property and have no need to move quickly into owning the property.   On the other hand, the Buyer needs to be able to move very quickly through their due diligence, evaluations and approvals as the third parties may ask for the sale to close within 10 days of their approval (in a “normal” sale this would be a 25-30 day process).

          Another curve that is thrown into the short sale is that the seller can (and will) keep marketing the home while the Buyer’s offer is awaiting approval in hopes of another or better offers.  So it may be months before you find out that your offer was bettered by someone else and you should have been trying to find something else instead.

          Buying a home can be very stressful and buying a home in a short sale situation is even more stressful.  That being said, there are some short sale properties available in the Park City area (though not nearly as many as in areas where the housing market is “depressed”) and they may represent a good value for the Buyer.  If you want to know more about the short sale process and whether it is an option that works for your Park City real estate needs, contact us at http://www.youinparkcity.com/

           Park City real estate, like else where in the country, is experiencing a buyers market.  Most of the people I have been working with lately are in search of a “great deal”.  To many people this means a property that is priced below previous sales.  This is certainly one element to consider but we have also been finding value in another area; the remodeled property that is priced at or just slightly above previous sales.

           When the market was in its frenzy with multiple offers and not enough sellers many people saw the increased equity in their Park City home or condo as an opportunity to renovate their home.  Investors jumped into the market with the intent to buy, fix and flip a unit.  But markets change and some investors entered the market at the end of the cycle.  As a result there are properties in most areas that have undergone extensive renovations and can be a much better value than one that is just “priced to sell”.  You may be able to buy that “fixer upper” at a discount but after your remodel will you still come out ahead?  The answer is often no.

          We think you can find some strong values in investor owned properties.  These people, while seeking to maximize their returns, may be willing to break even or sell at a loss in an effort to free up their cash and “keep their money working” via other investment opportunities. Some people, myself for instance, who have remodeled their primary residence will usually decide to stay put unless they have to relocate for work.  See blog post of April 21, 2008

          The advantage of buying remodeled homes and condos is two fold.  If you decide you want to own it long term you don’t need to do much to bring it up to today’s standards; it already has the granite counter tops, fresh paint, new carpet and nice cabinetry.  So, when the market moves up and you decide to sell the property it will be positioned ahead of those that have not undergone the renovation.  In the interim, you don’t have to do the work and/or live in a construction project.

          So when you are having the http://www.youinparkcity.com/ group help you find a best buy in the Park City real estate market don’t be surprised if one of the opportunities we uncover isn’t necessarily the least expensive.

The Park City housing market has seen change recently.  The rocketing upward of prices has slowed and Park City is returning to a more normal real estate market.  The effect of the changing market varies greatly depending on the price, neighborhood and subdivision. 

The entry level market appears to have been affected the least by the downward pricing pressure here in Park City, Utah.  Finding a single family home in Park City that is under $400,000 is still very hard to do; the same goes for a truly affordable condominium.  There are a number of factors keeping the entry level home pricing up while other Park City marketplaces flatten or fall.

The economy of Park City and most of Utah is still strong.  Job losses and cutbacks have not been a problem here, and the resorts are still enjoying strong tourism.  The fact that the job market hasn’t changed much means that people living in Park City aren’t falling behind on mortgage payments and aren’t being forced to sell their homes. 

The entry level tier of the housing market has the most resistance to falling prices.  While no-one ever wants to take a loss on an investment, the people who scraped everything together to buy the home they live in truly can’t afford and refuse to take a loss and start over.  If these people aren’t forced into selling their homes due to job-loss or some family tragedy, chances are they will just stay where they are until such time that the market changes or they have accumulated enough wealth to move upward within the area. 

People still want to live in and raise their families in Park City.  Demand for housing, especially entry level housing has not changed much.  There is a very strong service industry in Park City and the wages that coincide with these jobs dictates that entry level housing in Park City is what these workers can afford.   The recent changes affecting credit and financing have made it harder to get loans, but in truth these were not the people that needed sub-prime loans anyway. 

Things do happen and people are forced into selling their homes at “rock bottom” prices at times in order to move them quickly, but there are few indicators that “the bottom is falling out” and that entry level pricing will fall dramatically in the near future.  For more information regarding pricing in specific Park City real estate neighborhoods and/or subdivisions, visit http://www.youinparkcity.com/ 

 VRBO.com is: Vacation Rentals by Owner a web portal for rentals.  The site allows you to advertise and rent out your property on your own.   For a relatively small price ($300-$500 for a year) you can advertise your property online and find short term renters.  The site is well known amongst vacationers and is gaining popularity and available listings all the time. Many Park City real estate owners and investors look to this site to increase their exposure and rental income.  I have often been asked by prospective property Buyers “Can I increase the net rental dollars if I put it on VRBO?”  The answer is: “maybe”.  VRBO is an option and when you consider that property management companies in Park City take up to 50% of the rental revenue in return for their services, VRBO’s advertising costs are fairly insignificant.  There are however many hidden or unspecified costs.

There are cleaning services that need to be factored into the equation.  Some VRBO users add in a cleaning fee to the rental price to handle this.  There is also the question of checking in and picking up a key.  Key-boxes at the door can handle this and some rental companies provide this service for a nominal fee.  Maintenance can also be a factor: if the plumbing backs up, who is going to respond?  Small per service or hourly companies can take care of this issue.   The most daunting tasks though are answering the questions (both when guests are “in-house” and before they arrive) and dealing with problems that occur during the stay. 

Being a small operator, you do not have the luxury of moving guests to another unit if they aren’t satisfied with their accommodations (this is an advantage property management companies have).  You also become the one that answers the late night phone calls.  Finally you need to set up the ability to take credit card payment (this can be handled via Paypal) and be ready to do battle with guests over their charges. 

The question becomes; “Is it worth it for the added revenue?”  Once again, the answer is “maybe”.

Finally, many owners have taken it upon themselves to use this service to find renters and then use an “owner usage block” with the management company they work with; thus increasing their revenue and still maintaining the benefits of a company to handle all the problems.  Beware; this will undoubtedly put you in violation of your contract with your Park City property management company. 

While it may appear that fees for management are high, most property management companies in Park City provide many services that justify their fees. These services include websites, advertising, reservationists, shuttles and drivers, front desk personnel and answering services, breakfast, concierge services, cleaning and laundry, maintenance and more. 

The dates that the VRBO works best for the property owner are often the easiest to book and most desirable.  By removing these from the property management company inventory it only increases their costs and it is reasonable when looking form their side that this would be a violation of their contract with the owner and that the owner should be removed from their rental pool altogether.  It’s a case of “you can’t have your cake and eat it too”. 

So, in terms of what you can do in Park City to increase your nightly rental revenue, VRBO may or may not be a good resource.  You may make more money, but it will cost you time and effort.

If you want more information about VRBO and property management in Park City, Utah go to Click Here and to contact one of our agents. 

Hitwise (a web metrics company) reported that in March, 2008 the top 4 real estate websites in terms of market share were Realtor.com, Re/max, Yahoo.com and Zillow.com. 

If you watch the month to month statistics that lead to these rankings, nothing seems wrong.  These are big companies with large marketing budgets and many people working to make sure the sites show up when people use various search engines to find real estate. 

As many of the various MLS’s (multiple listing services) become more transparent and the use of the internet increasingly becomes where consumers start their housing searches, web traffic to these sites seems normal.  There is one glaring problem with some of these searches; stale and/or incorrect data, as well as inconsistencies.

Recently while I was working with a Buyer, I was sent a list of MLS numbers that the client wished to see.  There were nine numbers emailed to me which corresponded to the 2 different MLS systems available to the greater Park City, Utah area (Park City MLS and Wasatch Front MLS).  Being a member of both the Park City and Salt Lake Boards City of Realtors, the numbers didn’t present a problem.  After searching the numbers, I found not one “active listing” in the homes my client had liked.  All of the listings had sold or expired, some had new listing numbers.  The sales had happened a year ago or more.  All of the data that my client had searched was stale and effectively worthless.  What a waste of time!  I asked what search was used and the response was “Yahoo”.    

I redirected the Buyer to my website http://www.youinparkcity.com/ which features an IDX feed from the Park City MLS and my client found current active listings and information.

While the You In Park City group will never have the budget of a Yahoo or Zillow, it is somewhat comforting to know that we will always have a better ability to stay current and offer better information and service than the big dot com’s.

             A TV news broadcast caught my attention recently.  The consumer affairs/product test reporter produced a piece relating to credit scores.  The segment dealt with three people and spent four weeks working on their credit scores.  At the end of the four week test, all three had increased their FICO scores between 20 and 70 points.  The participants had been coached by Al Bingham a loan officer with National City Mortgage out of Salt Lake City, Utah.

            Real estate in the Park City area is primarily second homes and vacation property.  The majority of the home sales in Park City do not run into financing problems due to their secondary home nature, many are purchased for cash.  There are however, many younger families and people in the area that do finance their primary residence here.   Finding homes and condominiums in Park City that are affordable for the “average person” or the working class of Park City can be very challenging.  A person’s credit score can make the difference in monthly payments that can make or break a possible sale.

            Bingham’s book The Road to 850 illustrates the cost of a credit score (not only in terms of a mortgage, but how it can affect other areas of our lives) and gives directions as how to make your score better.  The chart below illustrates the monthly cost of a $200,000 mortgage in terms of monthly payment and the total cost over the full term of the loan.

It is conceivable that these numbers have only become more pronounced in their differences and costs to the consumer with the recent liquidity issues in the mortgage business. 

            Another interesting point made by the book is that credit scores also affect your insurance rates and that credit reports are becoming part of background checks for employment and other things.   The book points out that many, if not most, peoples’ credit report contains some inaccuracy.  The book gives instruction on how to correct these issues and lets us know that it isn’t easy.  As the use of credit scores expands it makes sense to know what your credit score says about you and know if it is correct. 

            The recent sub-prime lending mess has brought credit and financing to the front page of the news.  The changes in lenders’ standards as well as the other uses of our credit scores make this book something I highly recommend.

Todd Anderson

http://www.youinparkcity.com/

Todd@YouInParkCity.com