If Park City Land Is Up for Grabs, You Should Jump On It – Here’s Why
Land price and availability are always an issue in gateway coastal markets. Meanwhile, prices for construction materials have trended upwards and supply chain disruptions have exacerbated the situation.
For a tiny ski town, Park City, Utah has become something of a year-round fixture. At LUXred, we’ve witnessed this growth firsthand, and it’s showing no signs of slowing down for the time being. Local real estate has become increasingly hot, as new market conditions have begun to push private buyers into new areas and investors into new assets.
Volatility associated with commercial real estate plays in the wake of the COVID-19 health crisis has warmed willing buyers to the idea of residential plays, even beyond the more established multifamily assets and through to the single-family market. Drilling down, available land zoned for single housing properties has become something of a hot commodity, due to increased demand in the sector from potential homebuyers and investors alike.
Park City’s Great Q1 Cements Market Reputation
According to the Park City Board of Realtors, what was a hotter than expected year for local real estate continued at an even higher temperature in 2021. This year’s first quarter has seen numbers go up across the board from residential listings—up 17% over Q1 2020—to closed sales—which were actually up 150%. Sheer sales volume was also up, with single family investment totals at $999 million, up 122% year-over-year.
Park City’s fundamentals are doing great, but it’s the intangibles that make this town’s real estate market soar. The world-class ski resorts, proximity to a major airport and a rapidly expanding urban center in Salt Lake City – these all add up to an ever-improving housing market. The median price for single family homes within the town reached $2.7 million during the first quarter of the year, marking a 38% hike over 2020.
Further boosts from a sudden need for more outdoor space, residents seeking lower-density living, and good amenitization contribute to the buzz around this Utah town. But this time, growth isn’t coupled with risks of over-supply, like it did during the 2008 market crash.
But the opposite of oversupply means plays are limited. And with prices at all-time highs, potential residents and investors alike are looking into land opportunities, to build their investments from the ground up. In places like Park City, quick growth and a still-limited inventory both lend themselves to continued value hikes in the short and long term. Housing demand is poised to sustain that trend, as well.
Investments in Park City Go the Way of the DIY
As a result of the factors discussed above, design-build investment strategies are now a big ticket item. In order to achieve that, your project is going to matter a lot. Land price and availability are always an issue in gateway coastal markets. Meanwhile, prices for construction materials have trended upwards and supply chain disruptions have exacerbated the situation.
Factor in the risks of investing in existing properties, and the simplest, closest to foolproof play seems to be just investing in land. For those investors, design-build opportunities may be the most appealing and comprehensive.
First-time investors may be tempted by the opportunities in the housing market, especially with values as high as mentioned. But concerns linked to a lack of control of the assets involved in single-family acquisitions may keep some from going through with their investment. Those buyers may be slightly reassured by the more detailed process that goes into ground-up residential investments.
Ground-up projects can also be more lucrative due to the made-for-measure nature of the venture. That may be preferable to both first-time and experienced investors, especially if they’re new to the market. For those investments, a strong market presence, clear processes, and local knowledge are all crucial to the success of the project.
To that effect, if you’re looking into Park City real estate for your next, or first, investment, for that matter, schedule an appointment with LUXred and check out what your best options are for ground-up investment near the Wasatch Front.