Chief Economist of the National Association of REALTORS Lawrence Yun came with facts and figures in hand to speak to the Park City Board of REALTORS about the national housing market Thursday. His assessment was a positive one: trends show the housing market is headed toward stabilization. "There are many indicators that things are starting to show much better numbers," Yun said, "both economically and in housing." Perhaps one of the biggest issues areas like Park City will face in the future have less to do with the economy and more to do with government. As a way to raise tax revenue, lawmakers are considering removing tax breaks for those buying a second home. "The government is considering removing interest reduction for second-home purchases," Yun said. "That would have a very harmful impact for markets like Park City. If that tax benefit is taken away, then it will make it less desirable to buy second home."
With a market so reliant on those buying second homes, Park City and other resort towns would have a lot to lose if such legislation came into effect. If this type of law is adopted, Yun suspected it would be after the elections at the end of this year. "We work very hard at the state legislature to watch what kinds of bills come up that could cause problems for Realtors," said Park City Board of REALTORS president Tami Whisker. "We're one million strong nationally, and we can take a stand." Yun said lobbying efforts are already underway. "We hope it doesn't happen, but it is something Washington is seriously considering," Yun said. "It's coming up, discussion after discussion." While politics may leave some concern, the economy itself is looking up.
Nationally, home prices are down by 33 percent from peak prices, with most American homes still undervalued in the sale price, he said. Nationwide, investors are picking up real estate at bargain prices, and in doing so breathing some life back into the market. Simply put, it's a buyer's market, but that's not necessarily bad.
The same has been true for Park City. Home prices are down, the number of sales are up. "I know these numbers," Whisker said. "We've seen the same trends just much softer than other areas of the country." Yun speculated that a wave of renters may be looking to buy in the near future too. In the past few years more people have opted to rent, move back home or find an extra roommate, but Yun said that option could only go on so long before rent prices start to dramatically increase.
Faced with renting at higher prices or buying at low prices, Yun suspected people would chose to own. He described the renters market as a spring slowly being compressed, and eventually that spring would pop and flood the real estate market with people looking to buy. The biggest hurdles the housing market faces is building American confidence and getting banks to back home loans at current interest rate levels, Yun said. Local Realtors agree.
"There's a glimmer of hope," said Park City Realtor of six years, Patrick Giblin, "but I think keeping access to loans available to consumers and buyers and keeping that consumer confidence up is what we need to focus on now."