In My Opinion

by Jim Barth

The Park City real estate market is experiencing a healthy adjustment, compared to the boom years of 2005 and 2006. While the market now boasts nearly $1.6 billion in sales volume - that’s BILLION dollars - the number of transactions were down in 2007. Nonetheless, prices are way up from the years prior to 2005, and the Park City Board of REALTORS® expects the market to buck national trends due to the uniqueness and value of this area compared with other ski-resort towns.

The ultra high-end market in Empire Pass continues to be stable, with five sales transacted at Nakoma and 14 sales at Silver Strike Lodge during the month of January. The big question will be, how many of those sales were investor-driven and how will their absorption affect new East West offerings, specifically the Flagstaff building currently under construction. We will look for answers over the next year to year and a half.

The novelty of Old Town continues to draw positive interest, as evidenced by the millions of dollars raised to renovate the historic museum on Main Street. In addition, the sale of the Claim Jumper, Imperial Hotel and Brew Pub parking lot has strengthened the viability of Old Town. Inevitably, visitors and locals alike will continue to enjoy the vitality of Park City’s downtown.

The United States Ski Association headquarters is under construction at Quinn’s Junction, reinforcing the world-class ski element of Park City. The landmark 80,000-sq-ft building includes an international training facility, playing fields and administrative offices. Once complete, athletes from around the world will become familiarized with Park City and its elite training facilities.

The epic snowfall of ski season 2007-08 has resulted in incredibly positive public relations, including national media exposure and exuberant winter skiers. With the snow comes a new level of sophistication in Deer Valley® especially, where buyers have the means to purchase absolutely whatever they choose, whenever they choose. These new billionaires are recognizing the fact that Deer Valley® and Park City real estate represents a terrific investment opportunity compared to other world-class ski towns.

Market Summary

Park City Market

For real estate within the city limits - which includes Old Town, Thaynes, Deer Valley ® (Lower DV, Upper DV, Deer Crest, Empire Canyon), Aerie, Prospector and Park Meadows - the overall market has moderated with respect to sales activity. Although days in inventory now averages over six months, prices are still appreciating and sellers are receiving anywhere from 94% to 97% of their list price. The condominium market seems to be stronger than the single-family market; however, the absorption of new construction somewhat skews the numbers.

Old Town Market

Total units sold for both single-family resort properties and condominiums was down in 2007 from the previous year, which in large part was due to the decreasing number of available listed resort properties. Most of the single-family activity occurred in the higher-end resort properties - 75% of the single-family units sold in 2007 were over $1 million, with an average and median sales price of $1.8 million and $1.6 million, respectfully. In 2006, 47% of the units sold were over $1 million. In condominium sales, the Silver Star development provided a large portion of the 2007 sales activity - accounting for 37% of the total units sold (49) and 56% of the total volume sold ($64,956,600) in 2007. The average price of these 2-5 bedroom ski-to/from units was $1.3 million, ranging from $450 per square foot to $750 per square foot.

Deer Valley® Market

The volume sold and quantity sold comparisons reflect a slight decline in the Deer Valley® single-family resort market. However, prices are still strong, with average list and sold prices increasing more than 30% and sellers receiving 94% of their list price. The Deer Valley® Condominium Sales Real Estate Summary shows continued strength. However, a closer look shows that this condition is primarily due to continued strong absorption of newer, more expensive condominiums, specifically in Empire Pass. Almost 50% (88 out of 179) of the condominium units sold and 59% ($201,153,805 out of $340,955,812) of the total volume sold in Deer Valley® occurred in Empire Pass, primarily the Arrowleaf and Grand Lodge developments. The average price for an Empire Pass condominium was $2.3 million, with an average price per square foot of $1,087.

Greater Park City Area Market

Since the 2002 Olympics, the Park City real estate market (single-family, condominiums and homesites) has grown from $577 million to $1.6 billion. The market peaked in 2005 and has moderated in the last two years with respect to overall volume and number of transactions. Prices show continued strength, as newer resort construction product is absorbed, in particular, Silver Star in Old Town, Empire Pass in Deer Valley and Silverado Lodge in The Canyons.

The Inside Track

Montage

Construction of the Montage Resort and Spa at Deer Valley® Resort began last summer, with an anticipated opening in late 2010. Montage has a reputation as being one of the finest resorts in the world, and this new Rocky Mountain location in Empire Pass will be no exception. The 16-acre property is located adjacent to Deer Valley’s® Empire Day Lodge, just steps from the ski lifts. When completed, the Montage will consist of a 173-room luxury hotel with two restaurants, 14,000 square feet of first-class conference facilities, retail shops, an outdoor swimming pool and terraces, and a 35,000-sq-ft, full-service spa. Additionally, 90 whole-ownership luxury residences will fill the upper floors of the resort lodge and are expected to be available for sale in December, 2008.

Talisker Club Mountain Resaurant

Just this month, Talisker Corporation, the developer of Empire Pass, presented to the planning commission their plans to build the long-anticipated Talisker Club Mountain Restaurant. This proposed exclusive dining club will encompass 9,954 square feet and will be located just above the Empire Day Lodge near the intersection of Deer Valley® Resort’s Bandana ski trail and Twisted Branch Road. The private restaurant will be designed with a rustic craftsman style, much like Beaver Creek’s Beano’s Cabin, and will be situated in the natural forest environment for a unique on-mountain dining experience.

Park City Mountain Angle Station

An application to renovate the gondola angle station at Park City Mountain Resort into a restaurant was recently submitted to Park City. The angle station ceased operation with the removal of the gondola in 1997, but the building remains. The restaurant will provide for 230 indoor seats and 150 outdoor seats, while maintaining some of the machinery from the old gondola. The restaurant will not only be used for skiers and boarders in the winter, but also for hikers and mountain bikers in the summer.