Once again, Deer Valley and Park City make another top ten list. The most recent top ten list to include Deer Valley and Park City is the Wall Street Journal's "Top Ten Places For Second Homes". Deer Valley and Park City are ranked number four out of ten. However, that is the highest ranking awarded a ski area.

When you consider that Park City is surrounded by three world class resorts; The Canyons, for those who want to cover a lot of area and like it "steep and deep", Park City Mountain Resort, ideal for families, who board, ski and play together, and for the finest service and smoothest slopes, Ski Magazine's number one ranked Ski Resort, Deer Valley Resort , it is really not a surprise that Deer Valley and Park City ranked above Aspen in The Wall Street Journals 10 Best Places for Second Homes.

In addition to offering three of the finest Ski Resorts in the West, the Deer Valley and Park City areas offer some of the best signature golf courses in the country. These include the Tom Fazio course at Glenwild, the Pete Dye and Jack Nichlaus courses at Promontory The Ranch Club, the Mark O'Meara course at Tuhaye, the Reese Jones course at Victory Ranch Club, which is often touted as the most player friendly, and just in case you can't get enough Nichlaus play, there is the Jack Nichlaus Signature course at Red Ledges.

As the number of units sold continues to increase gradually, prices may not necessarily increase along with sales. However, the opportunities to purchase excellent properties at below replacement cost will decrease. Not only is this a very good time to take advantage of the selection or fine properties that are available in the Park City Deer Valley areas, now is the time to purchase these properties at a very appealing price.  

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Interesting read from the WSJ about Tiffany's that I believe applies to the Park City Luxury Real Estate Market. Source: http://online.wsj.com/article/SB10001424052970204731804574387021136203090-email.html

 

Remember the death of luxury? The new frugality? Canned soup capitalism?

That was, like, so nine months ago.

The recession may not even be over, but luxury is already back in fashion—at least, on Wall Street. And this has some messages for investors.

The latest curious data point: so far this year Tiffany stock has left Wal-Mart in the dust. It's not even close.

Anyone who went against last winter's conventional wisdom last winter and invested in the high-priced jeweler has made almost enough money to shop there. They are ahead 51% so far this year. Meanwhile investors who thought they were playing it safe and stuck to defensive, cut-price Wal-Mart, have actually lost 8%.

It's not just Tiffany. The whole luxury sector has bounced back. Coach (COH) is up 40% so far this year. Polo Ralph Lauren: 43%. Overseas giants like Louis Vuitton Moet Hennessy and Cartier parent Compagnie Financiere Richemont are up similar amounts.

What's going on? And what does it mean for your money?The Claymore/Robb Report Global Luxury exchange-traded fund (ROB), whose 2007 launch was one of the classic signs of a bull market peak, has risen nearly a third since the start of the year.

First, of course, it's a sign of how quickly the mood has changed from fear to greed. Luxury companies, whose stocks collapsed during the financial crisis, will be in a sweet spot if consumer spending rebounds—especially now, as companies have slashed overhead.

"Your upside even in a mild recovery is enormous," says Caroline Reyl, who manages the Premium Brands mutual fund for Pictet Funds in Geneva, Switzerland. "We have now reached the bottom in terms of profitability. The costs have been cut so much."

That's why Tiffany stock popped last week, even though second quarter sales and net earnings slumped. Chairman and CEO Michael Kowalski said there were some signs the sales decline was slowing. And, importantly, the company had slashed overhead by 14% over the last year.

Second point: Luxury stocks are an emerging market play. Consumers in the west may be struggling, but those in many Asian countries have big savings and are starting to spend. Luxury companies have reported booming sales in China, even during the recession. "Today we estimate that 30% of the sales of the luxury industry goes to emerging markets," says Ms. Reyl. A decade ago it was almost nothing.

Non-Japanese Asia accounted for 13% of Tiffany's worldwide sales last year, up from 10% two years earlier. And they rose by another 14% in local-currency terms in the second quarter - while U.S. sales fell 25%.

Third, and maybe most importantly for investors: The performance of luxury stocks like Tiffany so far this year is yet another reminder that Wall Street's game is really expectations more than performance.

There is nothing so dangerous to an investor's wealth as the conventional wisdom. And an analysts' consensus is a downright menace. Sure, as expected, Tiffany's sales have slumped this year. Meanwhile Wal-Mart's have stayed about even, despite the recession.

But Wall Street feared far worse for high-end retailers like Tiffany. So its shares started the year very cheap. What portfolio manager would dare own Tiffany stock going into the alleged second Great Depression?

Any who tried would lose his or her job and clients if things went badly. So most stuck to "safe" investments instead. According to Reuters data, just four of the 15 Wall Street analysts covering Tiffany were publicly bullish last winter, even when the shares were around their lows. Meanwhile two had outright sell recommendations.

(By contrast, 19 of the 24 analysts covering Wal-Mart had buy or 'outperform' recommendations. When so many analysts agreed, underperformance was just about guaranteed.)

No wonder Tiffany stock was trading at less than one times sales at the turn of the year, even though two or three times sales has been more typical for the last decade or so.

By now, of course, the stock is much less of a bargain: About 1.6 times sales, and 22 times forecast earnings . That's pretty expensive. It leaves the stock vulnerable to another downturn or change in sentiment. And, worse news, the analysts are now turning very bullish. Wal-Mart, by contrast, is more reasonably priced at about thirteen forecast earnings, yielding 2.1%. 

A great article about housing starts on bloomberg.com today that is yet another sign that the housing market may be strengthening: U.S. Housing Starts Soared in May; Permits Also Rose (Update1)

Of interest was this quote:

Lower prices and tax incentives are attracting buyers, potentially laying the groundwork for housing to rebound and reduce its drag on the economy. Still, rising unemployment is causing many Americans to hold off on big purchases and foreclosures continue to mount, so a sustained homebuilding recovery may take longer to emerge, analysts say.

“We’re nearing a bottom,” Adam York, an economist at Wachovia Corp. in Charlotte, North Carolina, said before the report. “Housing starts will slowly pick up by year-end. With the labor market where it is, we’re not confident there’ll be a big surge in demand for homes."

We are also seeing some signs of an improving market in Park City.  Contact me and I'll be happy to share with you some interesting statistics and details of what is happening today.

Utah Ranked No. 1 for Expected Economic Recovery

by PR or News Wire

28 May 2009--

In the midst of economic turmoil, federal bailouts, and budget deficits in more than 40 states, a new report from the American Legislative Exchange Council (ALEC) offers a roadmap to recovery based on economic performance trends from states over the last 10 years. The second edition of Rich States, Poor States:ALEC-Laffer State Economic Competitiveness Index shows how the federal bailout of the states may simply encourage out-of-control spending by states, which is up 124 percent over the last 10 years, without requiring them to make the tough decisions needed to bring about financial stability.

“Too many states were too eager to add programs and increase spending during the good times, but we now face very difficult choices,” said Indiana Senator Jim Buck, chairman of ALEC’s Tax and Fiscal Policy Task Force. “While we need to make tough choices to live within our means, we also need to remain focused on policies that foster economic development and job growth as the best solution to our budget woes.”

Co-author and renowned economist Dr. Arthur B. Laffer summarized the report's finding when he said, “States cannot tax their way into prosperity.” Rich States, Poor States presents rankings of the 50 states based on the relationship between policies and performance, revealing which states are best positioned to make a recovery, and which are not.

Laffer and his co-authors, Stephen Moore, senior economics writer at The Wall Street Journal, and Jonathan Williams, director of the Tax and Fiscal Policy Task Force for ALEC, analyze how economic competitiveness drives income, population and job growth in the states. They found that, “states with a high and rising tax burden are more likely to suffer through economic decline, while those with lower and falling tax burdens are more likely to enjoy robust economic growth.”

According to Williams, “The top performing states keep taxes, spending, and regulatory burdens low, while the biggest losers in the book tend to share similar policies of high tax rates, unsustainable spending and regulation.”

“New York earns the dubious distinction of having the worst economic outlook of any state,” according to the report. “The New York governor just might have broken the record for the number of bad ideas he put forward during a recent 17-minute budget address—most notably his 137 proposed tax increases come to mind.”

“As legislators, we know that we are in direct competition with other states for human and investment capital,” said Utah Revenue and Taxation Committee Chairman, Senator Wayne Niederhauser. “Rich States, Poor States has provided invaluable information to strengthen our efforts to reduce tax burdens in Utah and we are happy to again be ranked as the most competitive state in the nation.” 

Rich States, Poor States shows that “The decline of California is probably the best evidence that we can present as to the impact of poor state policy making on the economic pulse of a state.” In chapter two, the report contrasts the fiscal policy structures of California and Texas to “demonstrate how economic theory actually works in the real world.”

“California continues to increase regulations, raise taxes and spend profligately,” state the authors. “Texas, on the other hand, has a pro-growth economic environment with a competitive tax system, sound regulations and spending discipline that will help Texas maintain its superior performance well into the future.”

Darrick Olsen is a 30-year resident of Park City and Realtor with Local Knowledge and Global Reach and seasoned experience and background to artfully unite Buyers and Sellers.  For an honest discussion about what your needs are, and what will be your best options, call him at 435-640-1029.