Industry leaders have said that we’re in the most confusing real estate market in memory.  Let’s walk through what’s happening together. 


In Park City, at the beginning of the Covid-19 Pandemic, stay at home orders were put into place. We saw the ski lifts stop turning in March and the real estate world came to a screeching halt. After a few months, more people were given the freedom to work remotely, and therefore could relocate to their most desired location. This is when Park City became an extremely high demand location for people looking to move from large cities. And so started the strongest “Sellers-Market” we are likely to see again. 


There were many people wanting to move to Utah without enough homes for sale.  We began seeing all-cash multiple-offers, bidding wars, and buyers waiving normal contingencies to get contract acceptance on a property. This strong buyer demand in conjunction with the extremely low inventory led to sharply increasing property prices. 


Earlier this year, we started to see inflation creep up and more uncertainty in the world with the Russian invasion of Ukraine, talk of a recession, and a declining stock market. The FED started to increase interest rates to try and curb the inflation, coupled with increased property prices, this drove many people out of the market while others moved to the sidelines with a “wait and see” approach. 


Conditions have evolved, and we’re seeing a much slower market with buyers on the fence. Conversely, there is finally an increase in available homes for sale.   


We’re calling the current market a “Normalizing Market”. If we were to compare the current sales stats to one year ago, we’d look and say the market is decreasing dramatically, however as mentioned earlier, there were unusual factors that lead to the most robust market we may ever see again. 


Now, let’s compare our current market with that of 2019- before the Covid Boom- and this is where we are now as far as volume of transactions and buyer demand.  We’re almost back to 2019 numbers for available inventory as well - hence the coining of a “Normalizing Market”. 


We’re hearing that buyers are waiting for prices to come down before they purchase, and this is why we wanted to address this topic.  Prior to the Covid Boom, Park City real estate had an average increases year over year pretty consistently of 7-9%.  We propose this is what we will return to as things normalize. 


If we look back 20 years to 2002, in Utah real estate, there has only been 4 years of negative appreciation. This was from what was truly the lending and housing crisis of 2008-2011 where we did see appreciation drop as much as 8.7% in 2008. By 2012 it was a positive 12.5% and 2013 with a positive 9.6% made up for the losses in just 2 years. Since 2002, the appreciation is up 273.1%. Utah was just named the “most stable real estate market in the US” from data drawn from CNBC America’s Top States for Business study, the Federal Finance Agency (FHFA), the U.S. Census Bureau and Attom Data Solutions. 


We all got accustomed to the low interest rates, and we realize the new rates are a bit of a sticker shock. However, with interest rates, these are simply normalizing as well- money could not stay nearly-free forever. Historically, rates are still low when compared to other decades of 12% or higher and re-financing is always an option as rates are likely to decrease again in the long term.


The takeaway - Utah real estate is going to continue to appreciate, and interest rates are likely to increase.  Now is a great time to purchase your primary, secondary, or investment property in Utah.  If you “wait and see” the market will continue to progress and when you do purchase your Utah property, it will cost you 10% or more each year you wait.  Let’s get you a Park City property sooner than later!


Call Doug Almstedt to discuss your real estate questions.  

(435) 731-0710