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Summit/Wasatch Regional Outlook
WARD: There’s a movement afoot to say we’re going to put luxury out there front and center, and that’s what Park City’s brand is. But we’re talking about probably better incorporating that segment into the discussion. There’s a conversation about creating a separate marketing advisory committee that is the luxury brand, which I think is a great idea to incorporate that perspective and work it into our overall message. The message will still be that Park City is great for a wide segment of people.
OLSEN: It’s like trickle-down economics. You get that exposure out there. And like Chris said, they don’t write about the two and three star places. They write about the four or five star, the luxury. That’s what’s newsworthy. That’s what gets out there in the market where people go, “Wow. You know, this is a fantastic destination.”
HAMAWAY: If you look at inbound Russia, Australia and Brazil—kind of the big three from Park City—people who are traveling that far are looking for a certain type of experience. It’s not that “L” word. It’s about wanting to have an all-encompassing resort that they can come to for seven or 10 nights and have that resort experience. To go into that market, you have to have a story. And that story is that we have more luxury ski in and ski out than any other destination. It’s the sound bite to get in the door to have the conversation after that.
How does that luxury segment affect the real estate market? Is that a totally different market now? Because at one time it seemed pretty coupled with what was going on at the resorts and the hotels.
SONNTAG: Obviously there was an effect on real estate from the market downturn. You saw our target market taking destination vacations, keeping the powder dry and waiting for a change in the cycle. Now we’ve seen a lot of green shoots in the last year. The cycle is turning—our last two years were much better.
What you’re looking for now is price recovery. And I will tell you that prices have now recovered to a 2003-ish level from almost no market. Among our particular properties, they are regularly selling above $350 a foot for finished homes now. That’s a very good sign in the marketplace. Home sites are now selling, some of the better ones, for over half a million dollars. So we are seeing a return to confidence.
BURNS: At Red Ledges, this last year has been a tremendous year. Last year we sold the most property we’ve ever sold in a given year. This first quarter was a record for us. We just see a lot more activity and a lot more momentum going into this year, more than we’ve ever seen. We’ve been only open for about four years, but this is clearly the best winter we’ve ever had.
People who visited us four years ago had no idea what the market was doing and just sat on the sidelines. Probably 50 percent of the sales we’ve had are people that have been looking at us for two, three and four years. So those people that have been waiting it out are now deciding to jump back in.
And we’re starting to get builders that are more excited about coming back into the market, so you’re starting to see new product come in. We’ve seen a lot of housing starts out at Red Ledges where we didn’t have that before. So we’re very optimistic.
Who are these people? I saw some statistics that over a quarter of the people buying now are investors.
BURNS: We are seeing almost the exact opposite of that, which is what we are really excited about. The people that are buying now are breaking ground and building custom homes or they’re looking for a built product that they want to use. We are not really getting the investors.
And I have to thank Montage, St. Regis, Waldorf Astoria and Stein Eriksen. There’s a limited market here in Utah for people that can buy this product. We go after it aggressively but really, we need people coming from outside of Utah. The brands that people recognize really bring people out here. And it just changes the conversation completely.
SONNTAG: Our target market has always been not so much the winter market, but the people who look at Park City as the perfect place for their summer home. Our initial marketing push in early 2000 was into L.A., Phoenix, Texas—places where summer is so miserable that families go someplace else. We started marketing to those destinations, and then they discovered the winter. So the opposite of the usual cliché where they come for the winter and stay for the summer.
Now that properties are selling above replacement cost again, speculative or investor buyers may get back into the market. But during the softer part of the market, there will always be that core of people who want what they want. They want a great place in the mountains, and they will build it themselves.