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Park City: the best real-estate buys.


The Best Real-Estate Buys

"The announcement that Utah was not chosen as the site of the 1998 Olympics seems to have kicked loose a logjam in real estate," says Tom Calder, a real estate agent in Coldwell Banker's Park City office. Both buyers and sellers who had been waiting to see what would happen, finally took action after the June 15 announcement. "I've been swamped," says Calder.

Maybe sellers who were hoping to add 10 to 15 percent to the price of their properties were disappointed when the Games went to Japan, but the bursting of the Olympic bubble hasn't been the dominant force in the Park City market. Not surprisingly, when the war and recession hit, sales fizzled. Yet as of July 8, total sales volume year-to-date was down only 9.6 percent from last year, according to Board of Realtors president Richard Dudley. But that statistic largely reflects the sluggish first two months of the year. The market has pulled out of the war/recession doldrums. Since mid-February, the real-estate market is largely back to "normal"--at least if last year's record-breaking sales volume can be considered normal.

This year, for the first time ever, single-family home sales in Park City have exceeded condominium sales. Yet condominium sales seem to be still alive and well, according to Dudley. "The sales are nothing outrageous--we're not burning up the tracks--but we're a long way from suffering." Deer Valley sales are "running even" with last year, and condo sales in Park Meadows and outlying areas are up. Condominium sales as a whole, however, are down 24 percent, largely due to the "resort" category of condos. "There just isn't that much for sale in the area around the resort," Dudley says.

Bargains To Watch For

But the market is always changing. "There are always good opportunities. You simply have to shift with the market. The good buys are where there is an excess of product on the market. These days you can find people willing to nearly give away condos."

In Calder's opinion, one of the current best buys in Park City is condominiums under $80,000. "They're rare, but if you can find one and invest a small down payment, Park City's high rents can cover the monthly payments."

It helps, of course, that Utah's economy is the best it's been since the 1970s. Max Greenhalgh of Wardley's Better Homes and Gardens comments, "A lot of the buying I'm seeing, especially outside the Park City limits, is by Salt Lake folks--and that's due to the great market they have down there."

According to Lomas Mortgage, the percentage of new homes built per job created is now lower in Salt Lake than it is in any other large city in the country. Lomas reports that last year there were .16 homes constructed for each new job in Utah.

Add that statistic to the fact that interest rates are now so low--9 to 10.5 percent. "If the rest of the country was in as good a market as we are," says Greenhalgh, "we wouldn't have these low rates. We have the best of both worlds."

Some buyers, however, don't need to worry about financing. These people, according to Calder, are those who buy the top-end homes in Park City--$750,000 and up. "Those people simply aren't affected by recessions and stock-market swings. Johnny Carson, for instance, didn't hesitate in having cash sent out." And Carson, who recently bought a home in Deer Valley, is not alone in that ability. The trend is that, as the billionaires have taken over Aspen and Vail, the multi-millionaires are moving to Park City. Upper-end single-family homes should, therefore, continue strong.

Calder says the next level in the single-family market, the $350-500,000 range, is fairly healthy. "But there are a lot of new homes being built this year, which makes this the "scariest part of the market." He says that the percentage of built-on-speculation homes being built this year is rising. "There is a limit to the number of buyers in this price range."

In contrast, the more moderately priced homes are now hot properties. "Anything under $240,000 is where most of the buying will be--especially under $200,000," says Greenhalgh.

Most of this sales activity is occuring outside the city limits. In fact, while total home sales figures are up, home sales within the Park City limits are down, probably because properties outside the city are more affordable.

Commercial Opportunities and Controlled Growth

The Snyderville Basin is poised for rapid and major growth. Indeed, the line of developers standing at the county's door seems never-ending. Scheduled to open this fall is The Factory Stores at Park City, an outlet mall of 212,000 square feet that will "look more like a chalet than a mall," according to Mike Milner, partner in Landmark Plaza Associates II. Forty to 50 outlet stores will draw people from as far away as 500 miles through arranged bus tours, says Milner. There's more: ParkWest has received county approval for major terrain, facility, and lodging expansion; at the site of the Winter Sports Park bobsled and luge runs developers hope to make a success of 700 approved lodging units and 45,000 square feet of commercial space; new single-family projects seem to be sprouting in every meadow. And that's just a start.

Despite a blizzard of public opposition, the planning commission recently approved a K-Mart in the meadow at Kimball Junction. Wal-Mart is next in line for approval--but the final status of both is very much in question, since angry citizens have threatened to appeal and file legal action.

Within the Park City limits, where there is considerably less opportunity for commercial development, vacant retail and office space is becoming scarce. On Main Street, which a few short years ago was almost hidden beneath "For Lease" signs, vacant space is practically a memory only. "And the lease rates are rising," says Ken Osswald of Prudential Coleman. Depending on location and the property itself, lease rates on Main Street range from $9 to $20 a square foot. People are buying reasonably-priced Main Street property as soon as it becomes available.

In the Prospector commercial area, the vacant lots are, according to Osswald, "slowly but surely being absorbed." Throughout Park City, available office space is limited and may lease for $8.50 gross to $16 net. "The commercial market, although small, has reached a demand point where it rolls at its own pace," says Osswald. "And I think it will do well for quite a while."

Perhaps this is because there is only a finite amount of Park City property available; last year the city made it clear that it will guard against commercial sprawl when it bought the Osguthorpe farm (the dairy operation just outside of town) in an effort to preserve the land as open space.

"Normally a town without our controls would grow along the entry corridor," explains Osswald. "But in Park City the commercial land available is the |last buffalo'--which makes the land we have more valuable."

It also makes it harder to develop commercial properties. Over the years different grocery-store chains have tried to challenge Albertsons' sole proprietorship in the town. But all have failed, either because of public opposition or because of the high price of land.

The result is that Park City's planning control is constantly tightening. The government is currently working on a bevy of planning projects: Sensitive Lands Ordinance, Comprehensive Plan Amendment, annexation policies, and so on. According to Steve Chin of Prudential Coleman, the residents' clamor for controlled growth will make the city's approach even more cautious will in turn affect the real estate market. Within the city, the supply of primary and secondary homes will be moderated and values will go up.

If anything is constant in Park City real estate, it's change. From the big condominium boom of the early |80s to the big condominium bust of the mid-'80s, to the grandiose hotel schemes that have gone sour, to the run on single-family housing in recent years, the market is forever shifting. "Investors here need to do one of two things," says Tom Calder. "They need to get in for the long haul or position themselves in front of what's happening next."

Kristen Rogers is editor of Park City's Lodestar Magazine and a free-lance writer.
COPYRIGHT 1991 Olympus Publishing Co.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Author:Rogers, Kristen
Publication:Utah Business
Date:Aug 1, 1991
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