Park City, UT Real Estate Foreclosure Market

By Todd Anderson

Nov 20, 2011

How Low Can My Offer Be on an REO Property?

Bank owned real estate in Park City, UT is a very small portion of our inventory. In fact, of the 1048 homes and condominiums listed across the Park City Multiple Listing Service in the greater Park City area, only 16 are currently listed as being bank owned. There are 46 homes and condominiums listed as Short Sales, but those are different from bank REO properties.

To date this year 137 sales of bank owned condominiums and single family homes are shown across the Park City MLS. This number makes up over 15% of Park City sales (yet active bank REO listings make up less than 2%). As you look at the number of sales and active listings, it is easy to see that the turn-over of bank REO property in Park City is very fast.

The fast sale of bank owned real estate is by design. Property on a bank’s asset sheet is not a good thing and thus the banks price property to move quickly. That is not to say that they will give property away. Remember that banks are publicly held and at the end of the day banks are accountable to their shareholders; giving away assets is not viewed positively by the owners. As a rule of thumb, the bank REO properties are offered at a price considered to be 20-30% below market value. Due to this pricing strategy it is not uncommon to see multiple offers bid the price up above the asking price.

A recent article in HousingWire.com shows that Freddie Mae sold over 80,000 properties in the first 3 quarters of 2011 and that the sales prices averaged 94% of the asking price.

So when it comes time to make an offer on a bank owned property in Park City, UT, keep these things in mind and also keep in mind that the strength of your offer is measured by the speed at which you can close the transaction (think no contingencies) as well as the offer price. There are many players in the REO market searching for a deal in Park City; the relatively low number of REO offerings makes this market very competitive.

If you would like a list of current distressed properties in the Park City, UT area contact the YouInParkCity.com Group of real estate professionals at (888)968-4672.

Tags: bank owned, bank REO, distressed sale, foreclosure, Park City, Park City real estate, property, sale, Utah
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Park City short sale update

By Todd Anderson

Jun 04, 2009

On June 2, 2009 KSL.com News reported that ‘short sales' are on the rise in Salt Lake City, UT. The report gives very few details and goes on to quote a few Realtors in Salt Lake City about the effects of short sales and whether or not they are good for a potential buyer. The overall report had very little information in terms of data, but it does note that 1 in 7 listings in Sandy, Utah (a suburb of Salt Lake City) is listed as a short sale. Information like this that goes out nationally (most of the news about Utah is delivered via Salt Lake City) gives people the idea that the news is applicable throughout the state including Park City and Deer Valley, Utah. Real estate is a very local commodity and it is impossible to make assumptions based on one neighborhood and imply that it is true across all neighborhoods. The number of short sales per active listing in the Park City area is less than one in 25. While there is a glut of homes on the market here in Park City, most homes are not a distressed sale. This is not to say that there are not any deals to be found in the Park City area. Many neighborhoods in the Park City real estate area are seeing prices of homes and condominiums fall by 20% off of their highs. There are also short sales in the Park City & Deer Valley real estate market, and they cover just about every price range including a short sale in the Colony at The Canyons Resort listed at $3.99M down to condominiums in the Kimball Junction area listed at $119K. Of the 50 or so short/distressed sale inventory in the Park City area, nine are listed at over $1M, and 20 are over $500K. Short sales are not the only way to purchase a property in Park City and Deer Valley at a bargain price, and the relatively few short sales in the area (1 in 25 versus 1 in 5 in Draper, UT) make them a longer and tougher process. Due to the fact that many owners in Park City have a lot of equity in their homes, the deal is often not a short sale, but just an owner taking a large loss. So when you are looking for a real estate deal in Park City, keep a focus on the end you are hoping for, whether it is a home to retire to, a weekend get-away, an investment or rental property. The deals are there, contact your YouInParkcity.com Keller Williams REALTOR® to find the one that is right for you.

Tags: bank owned, Buyer, deals, Deer Valley, distressed, downturn, foreclosure, housing, Keller Williams, KSL, market, Park City, property, Real Estate, Salt Lake City, seller, short sales, Utah
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Park City Short Sales

By Todd Anderson

Jan 18, 2009

The national and global economies have affected the Park City real estate market. We know that at our market peak, Buyers were coming to Park City to buy second homes and vacation property from all over the world. Loose lending standards made finding the money for a second home easy. Housing prices rose everywhere. Higher property values wherever the Buyer's home happened to be made for great equity to borrow against for the purchase vacation property. We know that all this has come to an end with the bursting of the housing bubble. Short sales and foreclosures are now a staple story item for the nightly news. Many boom cities have seen home values drop by 40% or more. Stories abound about the ability to purchase bank owned and distressed properties for truly pennies on the dollar compared to what they sold for just two years ago. In Park City, we're often asked by visitors where the deals are here. A recent look at the Park City area Board of REALTORS® multiple listing service showed 1871 active listings (653 single family homes, 798 condominiums and 420 parcels of vacant land). Of these, only 26 were listed as a short sale, bank owned or in foreclosure. That is less than 1½ percent of the total number for sale. National figures while the real estate market was booming put the "normal" foreclosure rate at around 3%. Does this mean that Park City has somehow not been affected by the national and global economic changes? No. Park City and Deer Valley real estate have been impacted by the global economic changes, just not to the extent of Las Vegas, Miami, Phoenix and Southern California. The scarcity of land along with tough hillside builds and tight city regulations have meant that the housing boom did not leave Park City overbuilt. Changes in the market have occurred and prices have fallen from their peaks, but there appears to have not been the speculation and dependence on property appreciation to fund loans here that has lead to the demise of markets in other areas. The local economy in the Park City and Deer Valley area is only beginning to feel the pinch of the national and global economic downturn. I cannot remember previously seeing signs on Main St stating that restaurants are not hiring. A look through the local paper shows few job opportunities (in a "normal" winter, service and tourism industry jobs are abundant). We are starting to experience job losses. It is possible that the downturn may be just beginning here. Or it is possible that the effects of current low interest rates and the push for new jobs on a national level will turn everything around quickly and all our market will see is just a slight downturn. Only time will tell. All real estate is local. Are there deals to be found in Park City, Utah? Absolutely. Are there short sales, bank owned and distressed properties? Yes. Will you be able to find 5 homes in a row all in some state of foreclosure and buy them all up for a price that previously would buy one? No. Have the fundamentals of what makes Park City and Deer Valley a desirable place to live or vacation changed? Not at all! For more information on Buying or Selling homes, condominiums and land in the Park City and Deer Valley Utah area contact the YouInParkCity.com Group.

Tags: bank owned, Buyer, deals, Deer Valley, distressed, downturn, foreclosure, housing, market, Park City, property, Real Estate, seller, short sales
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Short Sales in Park City, Utah

By Todd Anderson

May 13, 2008

Short sale and foreclosure property always seem to catch people's attention. The idea of really getting a "steal" on property peaks investor and home-buyer interest. While a short sale can be a great deal, there are a few things to consider before you go searching for that "steal". First we should define a short sale. A short sale is a sale of property in which the sale price is less than the value of the loans against the property. Short sales can be initiated by the seller (property owner), but must be approved by the parties with loans which are using the property as collateral. The purpose of the short sale is to try and sell the home before it is foreclosed upon (lenders tend to lose more money in a foreclosure sale than a short sale). The parties on the selling side are losing money in the deal. The seller is losing whatever equity they had in the property (unless they got in with some type of "exotic" loan with no money down or cash out at the original loan origination (in this event the seller may not be losing real money, but is still damaging their credit)). The lien-holders are losing whatever money that was their original loan less the sale price. Secondary lien-holders stand to lose nearly all of their loan amounts. All of these parties have to agree to take their losses. None of them wants the loss and few of them want to admit they made a bad loan. The loss that a 1^st mortgage holder is willing to accept is generally about 20%-40% (they usually stand to lose as much as 60% in a foreclosure). Second or junior lien-holders also have to approve the sale. If in anyone's judgment the sale price is too low, they can refuse or send a counter-offer back to the Buyer. Timing may be the most confusing and frustrating issues that short sales present. Unlike a normal offer and acceptance type of negotiation, once the offer has been accepted by the seller, the contract must be approved by all parties holding liens on the property. These parties do not respond in a timely manner. There is often quite a bit of bureaucratic "red tape" to get through in approving a short sale and just finding the correct representatives that can approve the sale can be very frustrating. And while this process may take months (this is not an exaggeration) for the "third parties" to get approval back to the buyer, they will then ask for a closing within days. This timing issue means that as a Buyer, you need to keep from getting emotionally attached to the property and have no need to move quickly into owning the property. On the other hand, the Buyer needs to be able to move very quickly through their due diligence, evaluations and approvals as the third parties may ask for the sale to close within 10 days of their approval (in a "normal" sale this would be a 25-30 day process). Another curve that is thrown into the short sale is that the seller can (and will) keep marketing the home while the Buyer's offer is awaiting approval in hopes of another or better offers. So it may be months before you find out that your offer was bettered by someone else and you should have been trying to find something else instead. Buying a home can be very stressful and buying a home in a short sale situation is even more stressful. That being said, there are some short sale properties available in the Park City area (though not nearly as many as in areas where the housing market is "depressed") and they may represent a good value for the Buyer. If you want to know more about the short sale process and whether it is an option that works for your Park City real estate needs, contact us at http://www.youinparkcity.com/

Tags: buyers, deal, foreclosure, home-buyer, investor, Park City, property, Real Estate, short sale, Utah
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