Click here for the 10 year overall graph

Welcome to the twenty-seventh issue of The Hole Report. Published semi-annually, this data-driven report is the most accurate & trusted real estate news source in Teton County Wyoming.

HAS OUR LOCAL REAL ESTATE MARKET BOTTOMED OUT?
If you're a Buyer in the Jackson Hole real estate market, and you're looking for a sign to tell you when to make an offer, you have to first ask yourself the following question: "Am I looking to achieve the lowest purchase price or the lowest monthly payment?"

If your answer is "lowest monthly payment", you might have missed the lowest rates. In early January 2009 the mortgage rates for a conventional 30-year loan, hit a 37 year low (4.5%). Over the last two weeks, we've seen the rate jump as much as half a percent, based on any positive economic news. On Inauguration Day rates jumped half a percent within one hour of President Obama being sworn in. In my opinion, if the new administration can instill confidence in the stock market, most likely the low mark of 4.5% will continue to go up. The hope is the Feds will do everything in their power to keep rates low, for at least the next six months. Note: A two-point move in the interest rate can change your payment by as much as 20%. A drop of 2% in interest rates can help you to qualify for a property worth 20% more.

If your answer is "lowest purchase price", then now is the time. Over the last twelve months, we've watched Sellers try to figure out where the market value is for their property. They started by listing 15% to 20% more than the all-time high of 2007. When no Buyer's made offers, they lowered their asking price by 2% to 5% increments until they hit their 2007 market value. If it still didn't sell, then many Sellers pulled their property off the market. Note: Our local market saw the highest number of withdrawn or expired listings ever, in 2008. Sellers still want to sell, but are not going to give up their cherished equity. Unless our local economy falls completely apart in 2009, don't expect to see over-all values go down much further. Those sellers that want to wait, and have the ability, will simply borrow against their equity and wait for the market to return.

Lets look at the larger picture: The national and local real estate downturn began in January of 2006. It has now been three solid years of a down cycle. Based on my own daily observations, conversations with our appraisers, clients and other brokers as well as what seems to be a growing sense of optimism throughout the country, I believe that our local real estate market will begin to make measurable gains in the second quarter of 2009. Which means, the buyers who remain will find their best deals in the next six months. For those who are able to take advantage of this real estate market, and historically low interest rates, there will be some tremendous gains to be realized. Individuals who are watching the market closely to gauge when they should re-enter, have started surfacing in the past couple months. This trend is an indication that the market will gain momentum this year and, in retrospect, Buyers will look back at 2009 as the year they wished they had purchased their Jackson Hole real estate.

As mentioned in past reports, there hasn't been the panic in our Jackson Hole market like other real estate markets across the country, although we definitely have been affected. The key variable we don't suffer from is over saturation of inventory (we only have an eight-month supply of real estate). In Florida, California and other locations, thousands of homes were built in a short period of time creating a dramatic over supply. Conversely, there is a diminishing supply of real estate in Jackson Hole. The Jackson Hole market has remained relatively stable when compared to other markets and other types of investments (the stock market). However, it's still a Buyer's Market, and there are some very interesting opportunities in the market place. If you can afford to purchase property, now is the time. Have your Broker research the inventory, and identify ones that are right for you.

Why invest in Jackson Hole: If you compare your stock portfolio, IRA, 401k or any other investment you've made in the last 10 years to your Jackson Hole real estate investment, hands down your Jackson Hole investment has increased the most. My guess is: your Jackson Hole investment has more than doubled. The obvious benefit of investing in Jackson Hole is you have confidence going forward that it's one of the most secure investments you can make. Prior to the recent downturn, real estate in JH has historically appreciated at a rate of 10% to 20% per year. At a time when even cash is at risk, a Jackson Hole investment can make a great deal of sense, plus you have the added benefit of enjoying it year-round. The current economy and the devaluation of the stock market have demonstrated that fact in dramatic fashion. We hear on a daily basis from clients who tell us how happy they are they made their Jackson Hole investment(s). Not many brokers of any other investment products are getting those kinds of calls these days.

CRUNCHING THE NUMBERS FOR 2008: The overall market (all home, lot, condo and commercial transactions or listings) experienced the largest decrease in number of sales (down 48%) in recent history. In-fact, the last time we saw so few sales was in 1995. Numbers can be deceiving though. You have to look at the entire picture in order to understand what is truly happening in JH. Overall dollar volume was down 54% to $726 million, but the average sale price was only down 2%, and the median sale price was actually up 22%. Note: This anomaly comes from the lack of sales under $1 million (down 60%). The upper-end market (over $2 million) also experienced a large decrease in number of sales, down 52%. Yet, almost half of the 100 sales came in between $2 to $3 million, with 57 over $3 million and 19 sold for over $5 million. This does not mean the prices are up.

OVERALL REAL ESTATE CURRENTLY UNDER CONTRACT is not very positive. The number of properties currently under contract is down 82% when compared to the end of 2007. The dollar volume is also down 87% to $109 million, yet the median list price under contract is $3.55 million (up 31%), when compared to year-end 2007. Once again, the numbers indicate the lion's share of activity is over $1 million.

CURRENT OVERALL AVAILABLE INVENTORY has increased 36% when compared the end of 2007, but has been steadily dropping since September 2008 (down 24%) to 528 overall listings. Note: This drop didn't come from sales, instead from frustrated seller's who took their property off the market, because they couldn't find a Buyer willing to pay their price. If you consider the average number of overall annual sales, in the last ten years, is 811 then we have about eight months of inventory. If those frustrated Seller's re-enter the market though, you could see a year's worth of inventory. Meanwhile, the overall median listing price was down 8% to $1.649 million, and the overall average price of properties listed was $2.699 million (down 23%). These downturns in the median and average asking prices are a true indicator of our softening market (seller's are motivated). The dollar volume of available properties, as of January 1st, was up 4% to $1.422 billion when compared to this same time period in 2007.

Jackson Hole Real Estate & Appraisal, LLC is changing: While other real estate companies are scaling back, or closing their doors all together, we are repositioning ourselves in the local market to better serve our clients. Exciting changes are coming soon....

Want to stay on top of the market? Devon and I offer several services to help Sellers and Buyers alike. From daily email updates on what just hit the market to quarterly email reports, we can keep you well informed. We also offer free market analysis and quarterly updates on individual properties in Jackson Hole and the surrounding areas. To stay on top of this crazy and fast spaced market, or for a professional Realtor to represent you in your next real estate transaction, call or email us at one of the numbers below. You can also write to P.O. Box 7436, Jackson, WY 83002, Attn: David Viehman.

Jackson Hole Real Estate & Appraisal, LLC has served the Jackson Hole community for forty-one years. With a team of 33+ agents and support staff, a powerful database that leverages information for our clients, and the daily tracking of every single real estate transaction in Jackson Hole, this simple fact remains: "We Know The Market Better Than Anyone." If you are thinking of buying or selling property, and you need the help of a Realtor or Appraiser, you owe it to yourself to talk to us at Jackson Hole Real Estate & Appraisal. Our clients' best interests are always paramount!

We hope this report will give you some sense of market trends. As always, we are glad to discuss them further with you. This newsletter does not go into detail on every segment of the market, but is intended to offer an overview of general market conditions, showing year to-year changes in number of transactions and average sale prices. The value of any individual property may, and probably will, vary from the average indicated in these graphs.

Sincerely,
_
David E. Viehman, Owner/Broker, Editor
Devon Viehman-Wheeldon, Sales Associate, Co-Editor
Jackson Hole Real Estate & Appraisal, LLC
email: david@jhre.net
www.jacksonholereport.com
307.734.9941
800.735.8385 ext. 111

*While other local Real Estate Brokerages attempt to report on the local real estate market, Jackson Hole Real Estate & Appraisal, LLC is the only company to track every single transaction. Therefore, if you want the most accurate information to help guide you through your next real estate transaction, call us today. "We are the Experts".

*All statistics are supplied by sources that have been deemed reliable but are not guaranteed.

*All statistics quoted in this newsletter are based on sales in 2007 compared to sales in 2008.

*Median sale price is the cost of a property that has an equal number of sales above and below it on the price scale.

*Average sale price is the total combined dollar volume divided by the number of sales.

*The word "Overall" in this newsletter refers to all sales in Teton County combined (homes, lots, condos, commercial and ranch).

*The term "Market Value" means; the value of a property in terms of what it can be sold for on the open market; current value.

© Copyright 1995 - 2009 by David E. Viehman and Devon Viehman-Wheeldon dba Jackson Hole Real Estate & Appraisal LLC. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without explicitly written permission from David E. Viehman.

This site will be updated again on July 31, 2009

DATA-DRIVEN REPORT FOR THE FIRST SIX MONTHS OF 2008

Have we moved into a Buyer’s Market? The normal signs, inventory up and number of Buyers down, would indicate so. But, when you look at average and median sale and under contract prices, one could argue this is only partially true. In fact, the upper-end of our market is strong and will only get stronger as the summer progresses.
Have a look at the following indicators and see if they make sense to you:

• Number of overall sales is down 43% (only 261 sales since January 1st).

• Number of overall available listings is up 57% (583 available properties).

• Median home sale price, as of July 1, 2008, was $1,200,000 or 2% higher than 2007.

• Median home list price, as of July 1, 2008, was $1,995,000 or 21% lower than 2007.

• Median sale price of single-family lots is up 68% to $1.6 million.

• Median sale price of condo/townhouses is up 102% to $1.1 million.

• Total number of properties under contract is down 22% (only 109 properties currently under contract).

• Total dollar volume of properties under contract is up 9% ($357 million total volume).

• Average price of overall properties currently under contract is up 37%.

• From June 1st thru July 15th of this year, 21% of all current listings have had price reductions.

MAKING SENSE OF IT ALL: While we would like to think our local real estate market is insulated from national or world events, the past 12 months have proven otherwise. The mortgage crisis clearly has affected our local Buyers, at least temporarily. Don’t get me wrong; Local banks still have plenty of money to lend, and mortgage rates are still at historic lows. The only difference from last summer is the lending guidelines have really tightened, making the low down payment and low document loans almost impossible. Bridge loans (a temporary loan which allows Buyers to purchase their next property before selling their existing one) are also harder to obtain.

Since June 1st, 2008 we have seen 121 listings (21% of all listings) reduce their asking prices. This is unprecedented for Jackson Hole. Don’t expect to find prices below market value though. If you read my 1st quarter emailed report, then you know that almost half of the then available inventory was overpriced as much as 30%. We are consider these recent price reductions as a much needed market correction. What you will find in today’s market are Sellers who are looking for offers and who are willing to negotiate. They also want to take advantage of this summer’s Buyer’s Market, and are ready to deal.

On the other hand, our upper-end Buyers don’t seem to be as affected, which is where 60% of the sales came from so far this year. Upper-end Buyers are usually older, have more expendable income, and are moving their cash from other investments into real estate. This allows their investment dollars to continue growing and at the same time the investor, along with their friends and family, can reap the benefits that come with investing and living in Jackson Hole.

WHERE IS THE BUYER’S MARKET? The locals’ segment of our market has moved into a true Buyer’s Market. This segment (under $1 million) has taken a big hit, due mainly to the mortgage crisis. This is very evident when looking at the number of properties sold for under $1 million in 2008, down 60%, and the number currently under contract, down 85%. Then, consider inventory levels under $1 million are up 140%, for a total of 183 properties to choose from.

Don’t expect this Buyer’s market to last long. As mentioned above, it’s tied mostly to the mortgage crisis, which in turn has instilled a lack of confidence in our local Buyers. With many Sellers reducing their properties’ price tag to market value, and with local banks still willing to finance credit worthy borrowers, expect to see a big increase in sales soon. NOTE: You don’t know when real estate will be at bottom until it’s too late. If you see a condo, home or vacant parcel you really love, go for it. With inventory high and mortgage rates low, there couldn’t be a better time to get into the market or to trade up to your next JH property.

A big plus for local Buyers; jumbo loan amounts have increased in our region. This means you can now borrow up to $693,500 and still be considered low risk. The end result is increased buying power for locals!

Don’t wait for the lending guidelines to ease, as that could be way down the road. If you see something you really like, BUY IT THIS SUMMER!

THE OVERALL MARKET has been sluggish at best. Number of sales was down 43%, dollar volume was down 46% and the average overall sale price is down 3.5%. Much of the down turn has been in the under $1 million segment (local’s market) where the mortgage crisis has really been felt. The upper-end of our market ($2+ million) has also seen a slow down in number of sales but the average and median sale prices for upper-end lots and condos are up considerably.

OVERALL AVAILABLE INVENTORY: For the first time in four years, inventory levels are up - way up! Properties for sale have flooded the market this spring, up 57% when compared to July 1, 2007. Half the increase is listed for under $1 million, indicating a local Buyer’s Market. NOTE: inventory levels are still at historic lows. As of July 1, 2008, here’s how the available inventory stacks up:

• 183 listings under $1 million

• 182 listings between $1 to $2 million

• 78 listings between $2 to $3 million

• 74 listings between $3 to $5 million

• 42 listings between $5 to $10 million

• 24 listings over $10 million

OVERALL PROPERTIES UNDER CONTRACT are indicating a Buyer’s market may be short lived. While the number of Buyers under $1 million is almost non-existent (down 83%), the dollar volume under contract is up 9% to over $357 million. It’s the upper end that’s propping up our current market, and the higher the you go, the better it gets. The $1 to $3 million price range has 25% more properties under contract; $3 to $5 million has 43% more properties under contract; and the $5+ million price range has 63% more properties under contract, when compared to July 1, 2007. NOTE: Historically, we see more sales activity in the last six months of the year. Thus, expect a surge in the number of properties under contract as the high demand fall selling season approaches.

If you’re not in the Jackson Hole market today, do whatever it takes to purchase at least an entry-level condo tomorrow. If your parents can help, make them a partner in the investment. Otherwise, form a partnership, with one or more friends, or do whatever it takes to get started.

If you are fortunate enough to already own real estate in this market, then trade up to the next level. Example: Sell your small condo and buy a small single-family home; sell your small single-family home and buy a larger home; sell your larger home and buy a home with acreage, etc. In fact, keep trading up until you’re ready to retire, as there’s no better retirement plan than real estate. It is the only long-term investment you can actually use, improve and enjoy all at the same time. NOTE: If you want to trade up now, you have to set a realistic or just-below market price on the property you are selling.

FYI: Jackson Hole real estate has experienced a 100% increase in real estate values over the last five years. But, don’t expect it to increase at 20% per year. Some years are flat or below 5% and other years as high as 40%. If you are looking to make a quick buck in the current market, keep looking. Real Estate Shoppers in our current market should anticipate holding the property for at least three to five years.

JACKSON HOLE REALITY CHECK:
The least expensive single-family home, currently on the market in Jackson Hole, is in the Town of Jackson for $635,000. This buys you a 1,100 sq. ft. home on .116 acres built in 1978. The least expensive home price is up 17% from the same period last year.

The least expensive single-family residential vacant lot, currently on the market in Jackson Hole, is south of town close to Hoback Jct. for $395,000. NOTE: The median listing price for a vacant residential lot is $1.65 million.

The median sales price for a single-family home in the first six months of 2008 was $1,200,000. This sets a new record for Jackson Hole, and there’s a good chance it will climb higher by year’s end.

There are 199 homes currently listed for sale over $1 million. They break down as follows: 83 for between $1 and $2 million; 42 for $2 and $3 million; 35 for between $3 and $5 million; 24 for between $5 and $10 million; 11 for between $10 and $20 million; and 4 for over $20 million.

SHOPPING FOR REAL ESTATE ON-LINE? Did you know the most effective way to find and/or advertise real estate is on the web? The National Association of Realtors (NAR) recently stated that over 70% of all Buyers start their search on the web! If your property is not properly exposed to this media then you’re missing a crucial avenue for exposing your property to potential buyers.

Come visit our brand new website, http://www.jhre.net/ and compare it with all other real estate companies in JH. You’ll find without a doubt, whether buying or selling, we can get the job done better.

We offer Google mapping of all listings in our region, easy to navigate searches, tons of photos and additional information, shopping cart features (save your favorite listings or email them to your friends and family), automatic daily emails, on-line chats and every high-tech feature currently available for real estate websites. You can also surf all available properties on your own, without having to provide your contact information. Sign up today for daily emails and receive the hottest listing first!

WHERE ARE THE BUYERS COMING FROM?
In 2007 Jackson Hole recorded 899 deeded real estate transactions. Here’s where the Buyers came from:

Jackson Hole locals: 597 (66% of all Buyers)

Northeast: 103 (Connecticut recording the most Buyers for Northeast states)

West Coast: 60 (California recording the most Buyers for West Coast states)

Mid-West: 85 (Texas recording the most Buyers for Mid-West states)

Western Mountain States: 45 (excluding Jackson Hole – Wyoming recording the most Buyers)

South: 50 (Florida recording the most Buyers from the Southern states)

Outside of the United States: 10

We hope this report will give you a snapshot of market trends and, as always, we would be glad to discuss them further with you. This report does not go into detail on every segment of the market, but is intended to offer an overview of general market conditions, changes in number of transactions and average sales prices. The values of individual properties will most likely vary from the averages indicated in these graphs.

Want to stay on top of this fast paced market? Devon and I offer several services to help Sellers and Buyers alike. From daily email updates on what just hit the market to quarterly email reports, we can keep you well informed. We also offer free market analysis and quarterly updates on individual properties in Jackson Hole and the surrounding areas. To stay on top of this crazy and fast spaced market call or email us at one of the numbers below.

If you would like a more detailed analysis of specific areas, back issues of the The Hole Report, or are in need of our services, please email or call one of the numbers below or write to P. O. Box 7436 - Jackson Hole, WY 83002 - Attn: David Viehman.

Sincerely,

David E. Viehman - Owner/Editor, Associate Broker
Devon Viehman - Co-Editor, Sales Associate
Jackson Hole Real Estate & Appraisal, LLC
800-735-8385 or 307-733-3436 x 211
email: david@jhre.net or devon@jhre.net

Copyright 1995 - 2008 by David E. Viehman, dba Jackson Hole Real Estate & Appraisal, LLC. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without explicit written permission from David E. Viehman.

*All statistics are supplied by sources that have been deemed reliable but are not guaranteed.

*All statistics quoted in this newsletter are based on sales in the first six months of 2007 compared to the first six months of 2008.

*Median sale price is the cost of a property that has an equal number of sales above and below it on the price scale.

*Average sale price is the total combined dollar volume divided by the number of sales.

*The word “Overall” in this newsletter refers to all sales in Teton County combined (homes, lots, condos, commercial and ranch).

*The term “Market Value” means; the value of a property in terms of what it can be sold for on the open market; current value.