Upton Sinclair famously said, “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
With that, I present three charts related to housing. The first shows that homebuilder confidence (National Association of Home Builders or NAHB) is at all time highs. What this means to people in Park City is that companies like Ivory Homes (Park City Heights) and Woodside Homes (East creek Ranch in Silver Creek) are likely full speed ahead on building homes. Yet, someone has to buy them.
If you look at mortgage applications, nationwide, they are trending down. If you look at the current week (2nd week of September) they are nearing lows seen twice in the last 15 years. So, who is going to buy those new homes?
The “danger” to Park City is that too much product will be built and force home values down. That is, of course, great for the family that wants to move in. It’s not so good for existing home owners whose home sales may be competing with a newer home that is less expensive. It’s also not so great in the long-run for local governments who depend on property tax revenue growth for funding programs and projects.