As of September 2022, home prices in Park City, Utah saw a year-on-year uptick of 36.8%, with properties selling for a median price of $1.9 million. The last decade also saw homes in the locale appreciating by an astounding 93.4%. Based on these numbers, it’s easy to see that the Park City real estate market is scorching hot. This has led many people to ask the question, why have homes in Park City become so expensive? Read on to find out why!
HIGH DEMAND, LOW SUPPLY
Utah is seeing significant population and job growth in the past few years, with no signs of slowing down anytime soon. This has resulted in an increased demand for housing in the state. The high demand, combined with the low number of homes for sale, has driven the price of homes in popular communities like Park City to record highs. According to a report from the Park City Board of Realtors, there used to be 2,000 homes for sale here in May 2020. That number has since dwindled to 394 as of September 2021.
LOW MORTGAGE RATES
Market observers have been seeing most states registering mortgage rates that are lower than the national average. Park City is no different with a lower annual percentage rate of 6.43% for 30-year fixed loans compared to the national average of 6.87%. For 15-year fixed loans, Park City registered a 5.82% APR compared to the national average of 6.25%. These may be a far cry from the near-zero mortgage rates of 2020 when the pandemic began but still quite appealing to home buyers who have prepared their resources for the journey to homeownership in Park City.
CALIFORNIA EXODUS
The state of California has been losing residents at a steady pace for well over a decade. Exorbitant real estate prices, the untethering from their respective offices due to the remote work concept, the high cost of living, and stifling local and social policies were among the reasons Californians gave to justify their migration to other states like Utah, Arizona, and Idaho. According to a 2021 report, Californians made up an astounding 16.6% of domestic in-migrants to The Beehive State.
HIGHER BUILDING COSTS
Inflation has hit the construction market hard, if not harder than other industries. Between January 2021 and January 2022, the prices of construction materials increased by 20%. Even imported building materials saw a sizable price increase. With inflation, tariffs, and other factors, the prices of imported construction materials have increased throughout the years, leading to increased building costs overall.
DEMOGRAPHIC CHANGE
With the 72-million-strong millennial generation now at peak home-buying age, the number of property purchasers has grown significantly, causing home prices to increase everywhere – Utah included. According to a 2021 report from the National Association of Realtors, millennials now make up 37% of home buyers – the largest percentage of any generation by far. In Utah, this generation makes up 15% of total homeowners. Of the 50 states, Utah has the second-largest percentage of homeowners aged 35 and under.
Browse for your new home among Park City’s property listings and find one more effectively with Team Schlopy’s help. With 30 years of experience, the team has gained expertise in matching buyers with their ideal home. Get in touch with Team Schlopy today by calling (435) 640-5660 or sending an email here.