📊📈 Dive into the latest trends and insights from the local real estate market in Summit & Wasatch Counties. 🏞️🏠 Whether you’re a homeowner, potential buyer, or just love keeping up with market trends, these stats are a must-read.

January 2024 – After a two-plus yearlong real estate roller coaster, Park City Realtors are experiencing a market that many characterize as “closer to normal” than we have seen in recent quarters. Instead of focusing on post-Covid recovery, agents are more inclined to talk about a stable market with continuing moderate price appreciation and growing inventory.

The current market is probably being affected by higher interest rates and somewhat reduced inventory more than by any Covid hangover.

The inventory of available homes is approaching a healthy level having peaked in late summer at nearly 1,800 properties for sale. In the last full year before the Covid-crash, PCMLS averaged 2,100 listings each month. Sales prices have stabilized with single-family homes within Park City limits selling for slightly less than they did a year earlier and median prices in the Snyderville Basin are up just single digits year over year.

With inventories returning to a more normal level, and competition for available properties still running strong, market times and absorption rates (the length of time it would take to sell all current inventory based on the current rate of sales) are also remained steady.

Sales totals for single-family homes in Summit and Wasatch counties for all of 2023 were down just 2% from 2022. Prices remained steady to up slightly. The median home sale price in the PCMLS primary market area increased just 3% for the year ending 12/31/23 vs. the same period ending 12/31/22. The short term measure of quarterly median price increases presages to some the direction consumers might see for both sales prices and volume in the year ahead. But Park City is a highly seasonal market and many others point out that comparing one quarter to the next is not a valid predictor of a future trend.

This decrease in local market price volatility reflects trends seen elsewhere in the country, as business returns to a more seasonal pattern and extremes become scarcer. Mark Fleming, chief economist at First American Financial Corporation, predicts a “flat stretch” ahead for the housing market. “If the 2020-2021 housing market was too hot, then the 2023 market was probably too cold, but 2024 won’t yet be just right,” Fleming said in his 2024 forecast.

• Inventory has improved greatly over the past two years. As of January 1, 2022, greater Park City posted 280 active residential listings. As of January 1, 2024, that number was 840 or a 200% increase. However, comparing this year to the pre-covid years (2012 – 2019) inventory remains lower by 25%.
• The wild price swings that were prevalent the past couple of years have moderated. Average prices of single-family homes in Park City proper grew only 1% over last year. The median sale price for a single-family home in the city actually declined 5% to $3.7 million. 0020

In Summit and Wasatch Counties, the rate of sales (number of units sold) dropped 11% for single-family homes and 25% for condominiums from the full year prior. Sales declines across the region were attributed to fewer listings than demand could handle.

Park City is very much a community of neighborhoods. Prices and availability vary widely from one neighborhood to the next.

For single-family homes, four of the five major areas that make up the greater Park City market showed drops in units sold from 2022 to 2023. The exception was in the Snyderville Basin, where unit sales increased 4%. Within the central neighborhoods, Jeremy Ranch was the market leader in sales units, closing 34 sales, 42% more than last year.

Condo sales across the primary market range followed a pattern similar to single-family homes. Year-over-year sales units increased in Heber Valley and around the Jordanelle by 33% and 13% respectively. Closer in, condo unit sales in Park City and Snyderville dwindled, down 19% and 48% respectively.

Prices, however, were mixed across these two areas. Within the Park City limits, the median sale price rose 8% to $1.6 million. In the Snyderville Basin, the median sale price dipped just under $1 million, down 8%.

Comparing the 12 months ending December 31, 2023, to the same period ending in 2022:

• Residential inventory (single-family and condo) year-to-date is showing signs of recovery after a lengthy period of declines. At the end of December 2022, there were just 738 residential listings for sale in the entire PCMLS coverage area. On December 31, 2023, that number had grown to 880, almost 20% more.
• The market picked up some momentum heading into the last half of 2023. In the seven months from June thru December, PCMLS members signed 1,260 residential purchase contracts 20% more than the previous year (1,054).
• With New Listings running slightly higher than Pending contracts, inventory is being replaced faster than it is selling. For the year ending 12/31/23, 2,915 listings were added to the system. For the same period only 2,031 were put under contract. That’s 884 more listings added than contracts written, which hasn’t been seen in quite some time.

Matthew Gardner’s Top 10 Predictions for 2024

1. Still no housing bubble

This was number one on my list last year and, so far, my forecast was spot on. The reason why I’m calling it out again is because the market performed better in 2023 than I expected. Continued price growth, combined with significantly higher mortgage rates, might suggest to some that the market will implode in 2024, but I find this implausible.

2. Mortgage rates will drop, but not quickly

The U.S. economy has been remarkably resilient, which has led the Federal Reserve to indicate that they will keep mortgage rates higher for longer to tame inflation. But data shows inflation and the broader economy are starting to slow, which should allow mortgage rates to ease in 2024. That said, I think rates will only fall to around 6% by the end of the year.

3. Listing activity will rise modestly

Although I expect a modest increase in listing activity in 2024, many homeowners will be hesitant to sell and lose their current mortgage rate. The latest data shows 80% of mortgaged homeowners in the U.S. have rates at or below 5%. Although they may not be inclined to sell right now, when rates fall to within 1.5% of their current rate, some will be motivated to move.

4.Home prices will rise, but not much

While many forecasters said home prices would fall in 2023, that was not the case, as the lack of inventory propped up home values. Given that it’s unlikely that there will be a significant increase in the number of homes for sale, I don’t expect prices to drop in 2024. However, growth will be a very modest 1%, which is the lowest pace seen for many years, but growth all the same.

5. Home values in markets that crashed will recover

During the pandemic there were a number of more affordable markets across the country that experienced significant price increases, followed by price declines post-pandemic. I expected home prices in those areas to take longer to recover than the rest of the nation, but I’m surprised by how quickly they have started to grow, with most markets having either matched their historic highs or getting close to it – even in the face of very high borrowing costs. In 2024, I expect prices to match or exceed their 2022 highs in the vast majority of metro areas across the country.

6. New construction will gain market share

Although new construction remains tepid, builders are benefiting from the lack of supply in the resale market and are taking a greater share of listings. While this might sound like a positive for builders, it’s coming at a cost through lower list prices and increased incentives such as mortgage rate buy downs. Although material costs have softened, it will remain very hard for builders to deliver enough housing to meet the demand.

7. Housing affordability will get worse

With home prices continuing to rise and the pace of borrowing costs far exceeding income growth, affordability will likely erode further in 2024. For affordability to improve, it would require either a significant drop in home values, a significant drop in mortgage rates, a significant increase in household incomes, or some combination of the three. But I’m afraid this is very unlikely. First-time home buyers will be the hardest hit by this continued lack of affordable housing.

8. Government needs to continue taking housing seriously

The government has started to take housing and affordability more seriously, with several states already having adopted new land use policies aimed at releasing developable land. In 2024, I hope cities and counties will continue to ease their restrictive land use policies. I also hope they’ll continue to streamline the permitting process and reduce the fees that are charged to builders, as these costs are passed directly onto the home buyer, which further impacts affordability.

9. Foreclosure activity won’t impact the market

Many expected that the end of forbearance would bring a veritable tsunami of homes to market, but that didn’t happen. At its peak, almost 1-in-10 homes in America were in the program, but that has fallen to below 1%. That said, foreclosure starts have picked up, but still remain well below pre-pandemic levels. Look for delinquency levels to continue rising in 2024, but they will only be returning to the long-term average and are not a cause for concern.

10. Sales will rise but remain the lowest in 15 years

2023 will likely be remembered as the year when home sales were the lowest since the housing bubble burst in 2008. I expect the number of homes for sale to improve modestly in 2024 which, combined with mortgage rates trending lower, should result in about 4.4 million home sales. Ultimately though, demand exceeding supply will mean that sellers will still have the upper hand.

About Matthew Gardner

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.