Like the stock market, the housing market remains a fickle beast that many try to predict and explain. A combination of factors leads to a buyer’s market or a seller’s market, but these are often difficult for a layperson to understand.
Fortunately, many professionals study the housing market to determine the reasons we see ups and downs.
Like the broader housing market, luxury real estate has recorded an increase in entry prices, demand, and inventory in the past year.
Park City and Luxury Homes
Defined as the top 5% of homes listed, the upscale housing sector saw the listing price entry point across the nation grow by 6.1% year-over-year to $2.97 million.
“The Covid-19 pandemic has reinforced the resilience of the housing market, and unlike prior downturns, the luxury market is leading the recovery,” Realtor.com’s Chief Economist Danielle Hale said in a press statement.
This has also translated to the local area as well. The real estate market in Park City, UT, through the last year has been unprecedented. Most expected record losses due to COVID-19, but what happened was the exact opposite.
When the ski resorts shut down due to the pandemic last March, Park City locals were concerned about the potential impact on our town, which features an economy that is primarily focused on tourism. Many Park City residents were hunkered down at home during this time, keeping an eye on the news and expecting a bad turn for the local economy.
However, what happened next was utterly unexpected. When Park City lockdown lifted on May 1st, we began to see the most significant surge of buyer demand for real estate that Park City has ever seen. This surge was universal, taking place across every price range and area within the community.
The Luxury Market Leads The Way
The luxury real estate market was no exception. Since last summer, luxury home sales have increased significantly in Park City, both in price and volume. Many wanted to get away from the small apartment spaces and move to properties that featured more room. The demand for houses in the Park City area rose substantially.
This demand also saw a significant increase in homes valued at over $5 million, something we haven’t seen up to this point. With the wide variety of outdoor activities available to Park City residents, many felt they could not miss out on the opportunity to call this wonderful town their home.
But how do we explain this unprecedented trend? And what does this mean for property owners in Park City? Let’s dig in.
One reason for the demand is that people are looking to escape the hustle and bustle of claustrophobic and locked-down cities. We’re seeing a large influx of buyers from some of the world’s most populous cities.
This pandemic has taught many that being in tightly packed cities among large crowds isn’t the best choice for staying happy, healthy, and active. Because of this, many have made a move to smaller mountain towns with more room, promoting active lifestyles and playing host to many outdoor activities.
Another reason for this influx of homebuyers is the ease of access our town offers. Many people choose to live in Park City because of the accessible location, particularly to the west. Californians can arrive in Park City with a short, non-stop flight. It is also within driving distance of many western states for those who would prefer not to fly.
Also, many large cities like Chicago, New York, Houston, and Atlanta offer non-stop flights to Park City year-round.
The final reason we believe we’ve seen this influx of buying luxury homes in the area is the safe investment that Park City real estate offers. While prices in Park City have reached new heights, they are consistently priced more affordably than many other high-end resort towns like Aspen, Breckenridge, and Jackson Hole.
This fact, combined with the long-term prospects of the upgraded Salt Lake International Airport and world-class ski resorts in the area, means we remain bullish on the overall market.
It’s an excellent time to be a part of the real estate community here in Park City right now. This unprecedented surge in demand is quite exciting and ushering a new era into our town.
If you’re a buyer or seller looking in this market, it is imperative to connect with a realtor who can find you deals and take advantage of these opportunities.
Don’t be left out in the cold – let us at Jensen and Company help with all of your real estate needs. We know Park City, we’re a tried and trusted business in the area, and we can help you make this important transition in your life.