 Promontory real estate points to growthGina Barker, The Park Record The Park Record
Posted: 4/18/2012
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ParkRecord.com
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There’s a canary in the coal mine, but this time the indications are looking good. Promontory vacant land sales are pointing toward potential growth perhaps a resurgence in home construction or simply a bolster of support in the market as investments in real estate continue to crop up in the area.
According to documents from the Summit County Recorder’s Office, in a single year, more than 40 vacant lots were snatched up by one person in Promontory. A real estate investment company based in California, started picking up lots after the owner decided to settle part-time in Park City. While his number might outpace most buyers in town, the trend holds true to what Realtors are noticing, vacant land is a hot commodity in the Park City area.
“Inventory for homes is starting to shrink,” said Kathy Mears, a Summit Sotheby’s Realtor, “and suddenly there is a lot of interest in vacant land. We’re seeing sales we haven’t seen in a long time.”
In 2011, the number of vacant land sales was up 23 percent from the year before according to the Park City Board of Realtors (PCBR), the largest increase among all property type sales, including home sales and condo sales. More than one Realtor agreed that vacant land prices have seen a bottom and demand is starting to heat up, especially in Promontory.
“If the prices are good, people are going to buy more,” said Mark Seltenrich, the statistician for the PCBR. These numbers indicate that we’ve probably passed the bottom of the market, and that the bottom for lots sales was last year. ”When all is said and done, I believe the median prices will be higher this year than last.” At the same time last year, PCBR recorded the median home prices at $125,000 for vacant land in Promontory. This year, that median price has soared to $202,000, a 62 percent increase.
“It’s easy to see in retrospect, but anyone that has faith in the market would see it was a good deal. Half of vacant land sales fell below $125,000. For what you’re getting, that’s a decent investment.”
Prices for vacant land in 2011 were 70 percent below the peak, Seltenrich said, giving buyers more than a two-thirds discount from only a few years ago. ”It does show that investors are out there looking to get good deals on real estate in general,” Seltenrich added. “We’re seeing a shift in the market.”
Karin Wilson, a member of the Promontory Executive Team, said her vacant land sale numbers don’t seem to be slowing down as interest in the area grows. In 2010, Promontory closed 71 real estate deals. That number grew to 95 last year and continues to add steam. mid-April, Wilson said 17 sales had closed, remarkable because the first few months of the year are considered an untraditional selling season for Realtors.
“Real estate is an investment,” Wilson said. “People came out here, saw some tremendous values and bought a lot of distressed inventory.” ”We have seen a real uptick in building,” she added. “The number of properties that have started building is at 17 or 18 properties now, all under construction. And there are several more going through the design process.”
As vacant land sales continue, more are popping up in some of the least expected places. Mears helped to close two vacant land sales in Hidden Oaks, an area that she said hadn’t experienced a vacant land sale since 2007. Both sales were this year.
“There is a renewed interest in buying vacant lots right now,” Mears said. “The land prices have adjusted to prices that make sense to build. The inventory on available homes has shrunk and opting to purchase and build as opposed to buying an existing property is on the rise.”
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Tim Gaebe
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tgaebe@Pru-Utah.com
