Tuesday’s national doom and gloom housing statistics would have made me depressed had I not viewed Park City’s year-to-date housing figures first. Thank heavens real estate is local. The National Association of Realtors and the S&P Case-Shiller Home Price Indices released their March statistics today and they were not pretty. Experts were quoted saying “there is no relief in sight,” while some noted the percentage of homeowners dropped sharply to 66.4%, from a peak of 69.2% in 2004. These “experts” never mentioned the fact that housing ownership reached those peaks because of loose, or non-existent, lending standards. Perhaps the percentage of housing ownership is right where it should be in a healthy economy? I also found it interesting that the financial markets had almost no reaction to the housing news. Maybe those stock analysts are too busy buying real estate to pay attention to the national news…..which brings me to the Warren Buffett quote that is often repeated but completely apropos:
“Be greedy when others are fearful and be fearful when others are greedy.”
On May 31st, I reviewed statistics for Park City single family home sales for the first five months of this year (January 1 – May 31, 2011). After comparing those figures with the same statistics from 2010, I found the following facts interesting:
Single family home sales increased 14.29%, with volume growing from 154-to-176 for the five-month period.
Fourteen properties sold for more than $3 million, and four properties sold for more than $4 million so far this year.
The average sale price in 2011 was $1,056,979 vs. $989,623 in 2010.
The average list/sale ratio was 94% in 2011 vs. 91% in 2010.
And some of the most prestigious and expensive neighborhoods in Park City saw significant sales: 15 homes sold in Deer Valley® Resort; 6 in the Colony at White Pine Canyon; 2 in Glenwild; and 15 in Promontory.
Based on the above statistics, it appears that people with the financial means are being greedy and taking advantage of the fear-inducing headlines. From January through the end of April this year, one-third of all single family home sales in Park City were cash transactions.
See Tuesday’s blog and graph below about mortgage rates. Here is the takeaway… Individuals with financial means are seeing incredible values in Park City’s most distinguished neighborhoods and are snapping up homes in those areas. They see an opportunity that the average “Joe” (as quoted in the New York Times) does not. Depressed home prices and record low mortgage rates create an affordability index not seen since the early 1970’s. This is a great time to invest in a move-up home, a second home or rental property. Many of my most sophisticated clients are taking advantage of today’s unprecedented opportunities. Should you?