The third quarter saw the biggest spike in demand in several years. This year was interesting as the demand in Q3 did not take place in July and August, as is typical in our market. Demand spiked in late August and September. We believe this spike may have been due to the discussions of interest rate cuts, stock market record highs, and potential sticky inflation, pushing buyers who were on the fence to finally pull the trigger. With housing inventory still below normal levels and pricing relatively stable, the outlook remains positive.
Key Sales Metrics (Overall Park City Market)
Median Sales Price – $2,178,323, up 20.8% from the same quarter last year
Average Sales Price – $2,958,519, up 36.4% from the same quarter last year
Closed Sales – 284, the most closed sales in a quarter since 2022
Contracts Written (how many properties received an offer and entered escrow) – 325, the most pended properties in a quarter since 2021
New Properties Listed – 396, a drop from Q2 and matching historical trends
Cash Sales (as a %) – 57%, nearing all-time highs for cash transactions in our market
There are a few items to unpack here. First, closed sales and pended sales illustrate how active the market was during the third quarter, with both of those figures hitting highs that we have not seen since the COVID-fueled market. The other intriguing metric I want to highlight is that 57% of total sales were cash purchases. In my opinion, this illustrates a couple of factors: buyers pulling equity from the stock market, hedging against inflation, and anticipating interest rate cuts.
It is important to note that when it comes to the Federal Reserve cutting interest rates, those cuts are not tantamount to mortgage rates being cut, and typically, the banks price cuts into the mortgage rates ahead of time.
Typically, in the third quarter, the market shifts towards our primary residents, with folks either leaving Park City as their primary residence or buying into our market and making it their primary residence, aligning with the school calendar. This year was different. The most active portion of the market was Old Town with 49 properties going under contract, followed by Promontory with 39 properties, and Canyons Village with 33 properties.
These three neighborhoods alone account for 37% of the properties that went under contract in Q3, and while there are certainly full-time residents in these areas, they typically cater towards second homeowners and investment properties. In the primary market, we have seen quite a few examples of multiple offers and competitive properties selling quickly for list price or higher. What makes these properties attractive is the quality of the property (new construction or remodeled and move-in condition). High-quality properties, both primary and secondary, are truly driving the market right now.
Demand In The Park City Real Estate Market
Although we have seen our sales cycles take a bit longer than normal, the demand for our world-class lifestyle continues to draw new people to the Park City market. Access to a spectacular four-season lifestyle and continued scarcity of quality inventory will push the luxury sector. The market for properties that need work or updating continues to calibrate, but is getting closer to an equilibrium as buyers and sellers react to market realities. Buyers with the vision and desire to remodel and update a property are usually in a very favorable negotiation position.
If you have questions about a specific segment of our market, please reach out to any of us. As mentioned in this blog, demand varies widely based on location, age, and condition. We are actively engaged in the Park City market, consisting of Park City, the Heber Valley, and the Kamas Valley.