Facebook
X
Pinterest
Copy Link
VIEW FROM THE TOP
SVPN’s Justin Williams sat down with Dan Gorham, President of the Sun Valley Board of Realtors, (prior to the wildfire) to discuss the performance of the real estate market this summer. Gorham is also a member of the SVPN board and managing broker of Windermere.
Q. When reviewing the summer activity of real estate transactions, what has been the stand out news of the season this year?
For most price points, there’s a greater balance in the market between buyer demand and inventory available. There is one notable exception at the very high end, where the sales of properties priced over $2,000,000 has been sluggish through the first half of the year.. We are now seeing more activity in this price point as buyers have come to recognize there are some outstanding values available in Sun Valley, particularly when compared to other Western mountain resorts.
Q. Inventory levels have increased over the same period (1400 for August versus 1100 for June) and transactions continue to build. Are there any signs of price inflation in the market? Sellers appear optimistic about the future and less willing to negotiate steep discounts off of the list price. However, with the summer selling season winding down in the resort area, that could change in the next few weeks. Many sellers were overly exuberant in the spring, after reading various reports in the national press about strong growth in the housing sector. There’s typically a real estate reality check in September, but it all depends on the seller’s motivation level.
Q. What price levels are selling the most in the market and how does this compare to last year.
In 2012, we saw a huge increase in the sale of entry level homes priced below $200,000. The buyers were either first-time home owners or investors responding to the tight rental market. For 2013, we are seeing strong buyer demand in the mid-market, homes and condos priced between $400,000 and $800,000. Sales in that price point are up 33 percent over 2012 and the transaction count and dollar volume is double of what sold locally in 2011.
Q. What’s happening with the median prices in the north and south valley?
The median prices changes regularly as new sales are added into the equation. But as of mid-August in the resort area surrounding Sun Valley, the median single family sale closed at $360 a square foot. Last year at this time the median in the resort area was $342 a square foot. That’s a five percent increase. But you need to be cautious with the median prices in the resort area, because all the homes, lot sizes and neighborhoods are so different. It works better in the south valley, where the neighborhoods are more consistent. The median price in Hailey as of mid-August was in the Woodside subdivision and it closed at $143 a square foot. In 2012, a similar Woodside home closed at $109 a square foot. So for the sellers who waited until 2013 to list their property, there net proceeds were nearly 30 percent more than what a similar home sold for in 2012. As the wags have always correctly said, in real estate, timing is everything.
Q. Is there any correlation between activity in the large cities across the country and the valley? Is activity 'trickling down'?
The answer depends upon whether you are talking about the primary or secondary market. The gain in large cities is driven by job growth and individuals purchasing primary residences. We are experiencing that in our sales of owner occupied homes, where buyers are taking advantage of low prices and favorable interest rates in the south valley. A second home in a resort community, is quite different, and it remains largely a discretionary buy, driven by personal choice and a love of the area.
