 | Your Park City Real Estate ExpertâServing Park City, Deer Valley and Surrounding Areas
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TOM PEEK | Prudential Realty
890 Main St. Park City, Utah
Call (435) 645-5811
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March 2016 active listings (inventory) was down 32% from March 2015; yet, pending sales are up 8% in Salt Lake City County. This trend of low inventory by high pendings has occurred consistently for the last year. Bottom line: demand for housing remains strong, and inventory remains constrained.
Utah county has slowed slightly as far as pendings and Davis County has the lowest number of listings. The county is down 45% in inventory when compared to the same time last year. Once again, Davis county has more pending deals than they do active inventory.
Weber County is showing the same signs of frantic buyer interest with inventory down 37% from March of last yet, but pending sales are up 9%.
Davis County is seeing the strongest appreciation if you look at the month of March 2016 over 2015, with a 10% increase in median sales price this year.
Median price closed out at $255,000 in SLC county, which is up from January by almost 7%! Pricing is skyrocketing in the affordable price range; for Wasatch front, anything under $500K is seeing rapid appreciation. Median price in SLC may reach over $260K for all unit types and could surpass $300K for single family homes. That's a ceiling we've never even gotten close to in Salt Lake City.
Remember it's a seasonal market and this is common. If we remove the seasonality and just compare March 2015 to Feb 2016 median price is up 7%. This conveys that the market ceiling is really being challenged. On one hand, there is nothing to buy because inventory is low; but, at the same time buyers are experiencing price shock since the market got back to all time new highs in 2015.
Our take: The market will remain hot with more inventory coming to market over the next 90 days and likely will still see strong appreciation until inventory gets back to normal market levels.
While inventory along the Wasatch Front is down... way down, sales are up across all Wasatch Front counties.
Taking a look at Salt Lake County in January of this year, inventory is at 2430 homes across the county. That is down 30.20% from January 2015, yet sales are up 12.89% in the same comparison. In Weber County inventory is down 31.82% in January but sales are up 10.19% and pending sales are up 16.35%. Utah County had similar results in the same period comparison; 12.63% increased sales with 26.44% less inventory. What is amazing is Davis County has a 12.50% increase in sales over January 2015 in the face of a 41.38% drop in inventory!
Berkshire Hathaway HomeServices Utah Properties is doing well along the Wasatch Front. In 2016 to date, Salt Lake Countty has 12.03% Market Share. Century 21 Everest Realty Group is in distant 2nd place with 9.99% Market Share. BHHS agents are listing homes at a higher average price than anyone in our market and closing sales at 98.01% of asking price.
So far, 2016 is shaping up to be a great year for real estate. Median home prices are up across the Wasatch Front and are likely to continue up into the spring. The shortage of home listings is a concern and needs to be addressed as we move into the warmer sales months. For those considering selling, now is the perfect time to capitalize on your investment. There are plenty of buyers and interest rates have dropped in 2016 instead of rising as predicted at the end of 2015.
| Tax considerations for buyers and sellers |
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Buyers and sellers need to be informed about tax considerations before entering a transaction. If you have purchased or sold a home last year, there are a number of tax deductions for which you may qualify. Here are some important factors to keep in mind: Profitability: According to the IRS, if you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income as a single tax filer, or $500,000 on a joint return in most cases. Interest: Currently, much of the interest paid on a mortgage is tax-deductible. A married couple filing jointly can deduct all of their interest on a maximum of $1 million in mortgage debt secured by a first or second home. Selling costs: Broker commissions, title insurance, legal fees, advertising costs, administrative costs, and inspection fees are all considered selling costs and currently may be used to reduce one’s taxable capital gain by the amount of the selling costs. Refinanced mortgage points: They may be deductible, but not all at once. Homeowners who refinance may be able to immediately write off the balance of the old points and begin to amortize the new points. Interest paid on a home equity loan or similar line of credit may also be deducted. Points/origination fees: On a home loan, if points or origination fees are paid during the purchase of a home, they are currently generally tax-deductible for the year in which they were paid. Repairs/remodels: Qualifying capital improvements may be able to be deducted, including costs of a new roof, fence, swimming pool, garage, porch, built-in appliances, insulation, heating or cooling systems and landscaping. Relocation expenses: If you move because of a new job, you may be able to deduct some of your moving costs. To qualify for these deductions, you must meet several IRS requirements, including that your new job is at least 50 miles farther from your old home than your previous job. Moving-cost deductions can include travel or transportation costs, lodging expenses, and fees for storing your household goods. Property taxes: Currently deductible from your income. If you have an impound or escrow account, you can’t deduct the money held for property taxes until the money is actually used to pay your property taxes. City or state property tax refund reduces your federal deduction by an equal amount. First-time buyer credit: For those buyers who took advantage of this credit within the past two years, remember that if within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Another important tip for those moving into a new home is to make sure you update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Tax laws change every year, and certain tax deductions become available while others phase out. Speak with a professional tax consultant about these and other considerations. |
This comprehensive yearend market report is designed to give an overview of Summit and Wasatch County real estate. We feel that our clients should have access to information that facilitates thoughtful real estate decisions. All statistics are based upon Park City Board of Realtors MLS data for the period of 1/1/15 to 1/1/16.
The Park City market remains highly segmented. Our town, its neighborhoods, and outlying areas differ significantly in terms of price, home type, and features and amenities. For example, while Deer Valley and Prospector share the same zip code, average single family home prices in these two neighborhoods differ dramatically. Data interpretation, judgment, and historical context are key elements to making informed decisions: Contact your local BHHS Utah agent for guidance on navigating our market place.
Here are some general trends:
-The market suggests that we are recovered from the recession. We are now seeing home prices and sales numbers that are on par with those before the recession. Our market looks healthy and show signs of steady growth.
-The number of sales of single family homes in our City Limits and Snyderville Basin only saw a very gradual increase from 2014, and several areas actually saw a decrease in properties sold. However, the average sales price is up over 2014. There was a slight leveling off of the number of sales in Park City, due to lower inventory.
-Prices in Park City Proper's long standing residential neighborhoods like Park Meadows have shown signs of tapering somewhat. The price of single family homes in Silver Springs, Redstone, Old Ranch Road, and Pinebrook areas steadily increased last year. The numbers suggest that the difference between properties in town and just out of town has narrowed in terms of price and desirability.
-Several luxury lifestyle developments have seen unprecedented success over the last year. Both the Colony and Promontory reported an almost 30% increase in the number of home sales in 2015 compared to 2014. Consumers seem attracted to projects with engaging amenities and lifestyle offerings.
-There have also been large increases in sales numbers of condominiums in Lower Deer Valley, Kimball Junction, and Jordanelle neighborhoods. Both Kimball Junction and Jordanelle reported the highest number of sales per neighborhood; 135 condominiums were sold in 2015 in those areas. Similarly, Lower Deer Valley saw a 25% increase in the number of condo sales year over year.
-Heber Valley's housing market remains strong. There were over 240 sales in Heber Valley last year representing an overall increase of 12%. While buyer interest has remained strong, prices saw little change from 2014, with the average single family home price increasing by only 1%.
If you have recently bought or sold a home, there are a few tax advantages that may be available to you. Generally speaking, real estate broker’s commissions, title insurance, legal fees, advertising costs, administrative costs and inspection fees are considered selling costs and may reduce taxable capital gain by the amount of the selling costs.
However, every year the tax code can change and your situation may be unique. So the following is provided only as a guide. It is highly recommended that you seek a professional tax consultant to be sure.
There are several other key areas where you might benefit:
Mortgage Interest: Within limits, it may be tax-deductible. For example, a married couple filing jointly can deduct interest payments on a maximum of $1 million in mortgage debt secured by a first or second home. Buyers may also be able to deduct some of the interest they paid on a home equity loan or similar line of credit.
Points: Points or origination fees on a home loan paid during purchase are generally tax-deductible in full, for the year in which they were paid.
Refinanced mortgage points: These may also be deductible, but only over the life of the loan. Homeowners who refinance can immediately write off the balance of the old points and begin to amortize the new.
Improvements: Improvements made to property prior to the sale (or once one moves in) might qualify for an interest deduction on your home-improvement loan. Qualifying capital improvements are those that increase your home’s value, prolong its life, or adapt it to new uses, such as adding a porch or installing energy-efficient windows.
Real Estate Taxes: During a sale, the seller will send the local tax collector’s office a check for real estate taxes prior to the closing. In many circumstances, however, the buyer will pay a pro-rated portion of the taxes for the year at closing. This tax deduction also gets overlooked.
Business Use: For new buyers who work at home: If a room is used exclusively for business purposes, they may be able to deduct home costs related to that portion, such as a percentage of your insurance and repair costs, and depreciation.
Moving Costs: If you have moved because of a new job, moving costs might be deducted. These can include travel or transportation costs, lodging, and fees for storage of your household goods.
In today’s economy, it’s critical that we take advantage of every possible tax break. A home provides a great opportunity to do just that.
Don’t be offended if an agent suggests that you paint before placing your home on the market. They understand “color psychology.” Since people’s reaction to color is immediate, it can have a tremendous influence on their daily choices.
You can make your home stand out from the competition, sell more quickly and at a higher price if you use color effectively. Blues will feel cool, reds and oranges feel warm. Deeper shades of color imply intimacy and serenity.
Lighter exterior colors are favored because they can make the property seem larger. For older homes, you may want to consider historical accuracy, as this could be a big selling point as well.
For the interior, consider the purpose of each room. Kitchen and dining areas painted in “food colors” such as coffee browns, celery greens and scrambled-egg yellows will make the rooms feel more natural. Hallways are a great place to bring in the exterior colors for overall harmony. Master bedrooms in medium shades of green or blue for warm selling seasons, and rouge red for cooler weather. Other bedrooms can be painted in creamy tones of green, blue, or a pale shell pink. Shades of blue, green or lavender can form a relaxing atmosphere in the bathroom.
When thinking about color, common sense helps. You should match other things in your home and keep a comfortable environment as well.
You found the perfect house, made an offer, negotiated the price, had an inspection and ensured your mortgage. The only thing left is your final walk-through.
Walk-throughs are normally scheduled the day of, or day before the settlement, as the seller should be completely moved out. The object is to ensure that the house stands in the same condition as when you agreed to buy it.
This is not the time to nitpick about nail holes or carpet imperfections. Unless you’ve negotiated allowances for such issues, you’ll have to address them later after you’ve settled.
What could impact the transaction is property or fixtures that the seller agreed to leave behind are missing (e.g., a washing machine, pool table, garage cabinets, etc.) or if the seller leaves things that were supposed to be removed (e.g., paint cans, furniture, etc.).
With your agent at your side, be sure that obligatory repairs flagged during the home inspection are completed to code and satisfaction. If the seller agreed to replace an aging water heater but didn’t do it, this must be accounted for during settlement.
You may be eager to leave the house and get to the settlement, but don’t rush through the walk-through. Run the appliances through a full cycle to make sure they work. Turn on all faucets and showers as well.
Some contracts will specify that the buyer complete a walk-through a week or two prior to settlement followed by a quick meeting prior to settlement to check off any items previously noted. Again, any items or tasks that aren’t complete must be justified at the time of settlement.
Though issues may arise, the majority of walk-throughs go without a hitch as both parties are eager to complete the deal and willing to negotiate any final hurdles.
A Picture Can Be Worth a Thousand Words
This is even more true when it comes to selling your home. And let’s face it, you want those words to end with a definitive “sold.”
Homes garner more traffic and buyer interest when presented effectively—which means they sell faster. That’s why it is essential that you showcase your home through images in the best way possible.
According to the National Association of REALTORS,®nearly 90% of all homebuyers begin shopping for homes online. They click through photos and send a list of those of interest to their real estate agent. In fact, homes with few or no photos are often skipped simply for that reason, even if the home’s description matches a buyer’s ideal listing.
Many agents believe that apart from staging, no other marketing investment is as important as professional photography in marketing a property. So to generate more buyer interest, there has been a dramatic increase in the use of professional real estate photographers. As much as we like to think we take great photos, a professional has an eye for seeing the best composition and lighting, plus better equipment to make the photos bright, clear and sharp.
Active listings (inventory) are down 23% from October 2014, but Pendings are actually up by the same margin of 23% in Salt Lake County--this is perhaps the strongest indicator we have of the health of our housing market. Buyer interest has remained strong even in a slightly limited market. The Ogden and Davis County markets are witnessing even more pronounced versions of the same trend.
In terms of pricing, the median price for single family homes in Salt Lake County is $245,000, which represents a downturn from this summer. In July, Salt Lake City hit the peak of its market at $257,000 -- to see that number come down suggests that the market is adjusting based on buyer demands. The market seems to have found its ceiling. Similarly, we are seeing almost the same number of sales from last year, giving professionals reason to believe that our market is healthy and growing at a marginal rate that is advantageous to clients.
