Published semi-annually, this data-driven report is the most accurate and trusted real estate news source in Teton County, Wyoming. First, we would like to thank all our loyal readers, customers and clients for their continued trust in this report. Our ability to track every single real estate transaction, and then turn the data into historical knowledge, has made us the most sought after real estate experts in Jackson Hole.
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Overall Market 2011 End of Year Report
Single Family Homes in High Demand
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Click here for the 10 year overall graph
Welcome to the 17th Anniversary of The Hole Report. Published semi-annually, this data-driven report is the most accurate and trusted real estate news source in Teton County, Wyoming. First, we would like to thank all our loyal readers, customers and clients for their continued trust in this report. Our ability to track every single real estate transaction, and then turn the data into historical knowledge, has made us the most sought after real estate experts in Jackson Hole.
Single Family Homes in High Demand: The big news for 2011 was the shift in the Buyer’s focus from the high-end to single-family homes listed for under $1 million. At the end of 2011 we tracked 103 home sales for under $1 million, or 55% of the overall home sales. The significant news is this: 2011 ended with more home sales under $1 million than we currently have in available inventory (see single family home sales). If this trend continues, the law of supply and demand will kick in, and we could start seeing appreciation in this segment sooner than later.
As mentioned in the 2011 third quarter report, all affordably priced inventory is rapidly disappearing. Just three years ago, the idea of purchasing a single-family home in Jackson Hole for under $500,000, or a condo/townhome for under $300,000, was just a fleeting dream. Today, not only can this dream become a reality, but you also have multiple properties from which to choose, and loan interest rates are still at historic lows. We do not expect this opportunity to last. In 2011, there were 81 condo sales under $500,000 versus only 69 currently listed. Under $300,000 there were 47 condo sales versus only 22 currently listed. This will, of course, depend on how much more inventory hits the market in the coming months. NOTE: Those Sellers with properties priced above market value will continue to experience frustration with little activity, or offers, on their properties.
This demand is great news. 82% of all the ’11 distressed sales occurred in this under $1 million segment of our market. Currently 71% of the actively listed distressed inventory is in this segment. While many parts of our market have bottomed out in values, the amount of distressed listing inventory under $500,000 can play a big part in pricing existing and upcoming inventory.
Where are these affordable-minded Buyers coming from? Of the 266 overall sales for under $1 million in 2011, 158 of these buyers (or 59%) were local residents. Of the 132 overall sales for under $500,000 in 2011, 88 of these buyers (or 67%) were local residents. NOTE: Of the 266 overall sales, 118 of the properties (or 44%) were purchased with all cash and no financing.
Rental Properties are the hotspot for 2012. As reported in the 2011 third quarter report, the rental market in Jackson Hole is tightening. Based on a survey of local property managers, there is a high demand for single-family homes, but very little supply. We cite four main reasons for this demand: 1.) low/no new construction of homes, 2.) an increase in the number of renters since many people cannot qualify to purchase a home, 3.) several contractors returning to the Valley, and 4.) little to no new rental inventory for tenants. The affordable pricing coupled with the notable increase in the demand for rentals, is attracting investors. These savvy, opportunistic investors are taking advantage of the greatly discounted values. And, in many cases are able to earn an impressive 7% to 10% return on their investment. Investors are not only earning these returns in Jackson; it’s a nationwide trend. All across America, vacancy rates are low and rental rates are going up. As investors continue to buy these properties, the distressed inventory will continue to deplete, which in turn will help stabilize our market.
DISTRESSED REAL ESTATE (FORECLOSURES, SHORT SALES & BANK OWNED): As part of our continued efforts to stay on top of market trends, we have provided a snapshot of distressed sales in 2011 and what areas of the Valley have been affected the most. We also offer weekly email updates of all upcoming foreclosures, short sales and bank-owned properties. If you would like to sign up for this weekly e-update, send an email to davidviehman@jhrea.com
Number of distressed sales in 2011: Out of 408 total sales in Jackson Hole, 87 were distressed (21%) at some point last year before they sold. Of those 87, 71 (82%) sold for under $1 million, 53 sold for under $500K (61%), and 41 sold for under $300K (47%).
Areas with the most distressed sales: Out of the 87 distressed sales, 37 were in the Town of Jackson, 19 were south of Jackson, 12 were in Teton Village, 11 on the Westbank (outside of resort zones), 3 were in the JH Racquet Club, 3 were north of Jackson and 2 were at Spring Creek / Amangani Resort.
Number of currently distressed listings: There are currently 593 listings in Jackson Hole. Of these listings 34 (6%) are considered distressed. Of these 34, 24 (71%) are listed for under $1 million, 19 (56%) are listed for under $500K, and 11 are listed for under $300K (32%).
Areas with the most distressed listings: Out of the 34 distressed listings, 19 (56%) are in the Town of Jackson and 7 (21%) are in Teton Village.
NOTE: If you are currently seeking well-priced distressed properties, consider the following: in 2011, 21% of the overall sales were distressed. Of the 593 currently available listings, only 6% are considered distressed. Buyers need to also understand a distressed sale requires lots of patience, as the average time spent to close on a distressed property is between 90-120 days. Don’t let the allure of a distressed property blind you from the other opportunities. The current number of motivated Sellers is still historic, as are the low interest rates. While distressed sales usually generate lots of media press and interest, the non-distressed properties are some of the best buys in today’s market. The motivated Sellers of these well-priced properties are often more eager to make a deal, and Buyers can negotiate more readily with them than the mega banks that represent the distressed properties.
CRUNCHING THE NUMBERS FOR 2011: The overall market (all home, lot, condo and commercial transactions or listings) again has seen a steady climb in the number of sales across the board. When comparing the 2010 year-end statistics with 2011′s, we discover that the overall number of sales was up 28% to 408, and the overall dollar volume was up 16% to $588 million. The upper-end market (over $2 million) lost momentum in 2011, where sales were down 24%. In contrast overall sales between $1 and $2 million were up 42% in 2011. The hot spot in 2011 was under $1 million, where 65% of all transactions closed.
The surge of sales in the under $1 million market, and the simultaneous depletion of homes listed in the under $1 million segment (see single-family homes below), are a clear indication that prices may soon start to increase in this segment, in 2012. The unknown factor is this: How much new listing inventory will we see in the coming months? In 2012, we predict with confidence that buyers will continue to take advantage of some great values. They will choose to leverage their cash, or strong borrowing power, by investing in Jackson Hole real estate. NOTE: There are still some active listings priced above their current market value. The ones that are considered “a great deal with strong value” are the ones that are selling. Those Sellers with properties priced above market value will continue to experience frustration with little activity, or offers, on their properties.
Overall real estate currently under contract reflects the 2011 trend will continue into 2012. The number of properties currently under contract is at par with the end of 2010, but the dollar volume is down 17%, and the average and median list prices are down 18% and 32% respectively. Meanwhile, the Buyer’s focus on distressed properties is showing an increase, as 35% of the listings under contract are distressed. NOTE: Of the 50 properties under contract, only 6 are vacant land listings.
Current overall available inventory has decreased 11% when compared to the end of 2010. In contrast, the overall average listing price is up 17% and median list price is only down 2%. The drop in the median listing price indicates many Sellers’ willingness to keep up with current market values. NOTE: While the number of listings and the median list price are down, the year-end total dollar volume hit a new all-time high of $1.46 billion. The Spring Gulch listing of $175 million helped tip the scales though. This is the most expensive listing ever in Jackson Hole, and currently the most expensive listing in North America.
Real Estate Tip: Why you should use an IDX Broker in 2012: According to the National Association of Realtors, 95% of all Buyers start their search for property on the Internet. In fact, buyers cite the internet as one of the most important tools they use in their property search. The National Association of Realtors “Internet Data Exchange” (IDX) policy enables MLS Brokers to display your listing on other IDX public websites. IDX, also called “broker reciprocity,” is in many ways simply the logical extension of the MLS, but it’s greater than just that. Example: if you list your property with a non-participating IDX Broker, Buyers who are looking at local real estate websites can only find your listing on your non-participating IDX Broker’s respective website. If you list with an IDX Broker, Buyers can find your listing on 50+ other local real estate company websites and 100’s of more websites nationally and internationally! Bottom line: an IDX Broker introduces your property to many more buyers and increases your chances of receiving offers.
Simply put, IDX is a big win for brokers because it’s such big win for consumers. The Internet is, hands down the greatest marketing tool in the history of real estate, and IDX is a huge enhancement to it. So, ask your Broker if (s)he is a participating Broker. Check out our website to find all available listings in the valley: www.jacksonholeresortproperties.com
The Appraisal Corner: I was recently asked by a local realtor, “Why are appraisers setting the market?” I was taken aback by the question as nothing is further from the truth. I suppose I shouldn’t have been so surprised as we have seen such a dramatic decline in the real estate market since the high in 2007 and people are looking for answers.
In a down trending market, it is often the appraiser who delivers the “bad news” resulting in buyers and sellers demanding second opinions. “These values can’t be right,” they say. There have even been congressional investigations of why appraisals are coming in so low. The answer is very simple. It is not the appraisal. It is the fact that the real estate market has suffered an incredible decline. With many property owners upside down in their mortgages and many properties going to short sale or foreclosure, such properties will continue to set the market. And not until these “troubled properties” are removed will normal market forces take hold.
A recent press release from the National Home Builders Association entitled, Flawed Appraisals Killing Home Sales, Hampering Housing Recovery; suggested a similar sentiment as the local realtor’s question. To this The Appraisal Foundation, which is the Congressionally-authorized organization that establishes appraisal standards and appraiser qualifications in the United States, responded with a letter addressing this exact issue. A portion of the letter is below:
The press release quotes NAHB Chairman Bob Nielsen as stating, “The inappropriate use of distressed and foreclosed sales as comparables in determining new home values is needlessly driving down home prices, killing home sales, causing more workers to lose their jobs and delaying a housing and economic recovery.” Mr. Nielsen is also quoted as stating, “This is not only unfair and unreasonable, but it perpetuates the cycle of declining home values, drives more home owners underwater, harms local economic activity and acts as an obstacle to the recovery of the housing market.”
It is critical to understand that appraisers do not determine property values; they simply reflect the actions of buyers and sellers in the marketplace. An appraiser’s role is to “mirror the market” by analyzing the actions of buyers and sellers in the marketplace to produce a credible opinion of value.
The press release also refers to “faulty appraisal practices,” where “brand new homes with sparkling appliances and interior upgrades get compared to a distressed property that has been sitting vacant and in disrepair.” All things being equal, it is certainly true that the more similar a competing property is to the subject property, the better a comparable it is likely to be. However, there are often reasons why an appraiser may have to consider comparables that are not as physically similar to the subject property as may be desired. One key component in appraisal theory is the Principle of Substitution, which essentially states that knowledgeable and typically motivated buyers would not pay more for a property if a similar property could be built (or if competing properties are available in that marketplace at a lower price). The press release claims that 53 percent of builders surveyed reported appraised values that came in lower than the cost to construct. A concept many builders often fail to recognize is that cost does not equal value. In “depressed” markets, it may be common for buyers to be unwilling to pay the full cost to construct a home; in appraisal, this is known as external obsolescence, which is a loss in value due to factors outside the subject property. In these cases, that loss is attributed to a market where buyers have set a “limit” on the amount they are willing to pay, regardless of the cost to build.
While few would argue that a new home is not physically similar to a home that is in “disrepair,” the appraiser must analyze the effect of such properties on new home sales. For example, in marketplaces where many of the properties being bought are distress sales (e.g., foreclosures, bank-owned properties, short sales, etc.), it is not only permissible for appraisers to consider and potentially use these sales as comparables (or “comps”) but appraisers are required to determine the impact this activity is having in the marketplace. This is due to the fact that distress sales may very well impact the value of more “conventional” sales, because in several markets buyers may be reluctant to pay more for any property than the price level set by the distress sales (note the reference to the Principle of Substitution made previously). Further, if the number of distress sales (or distress properties available for sale) becomes so significant in a marketplace that it represents virtually the only activity occurring, the distress activity may actually become the marketplace.
In Teton County, properties that sold in 2006 and 2007 are now selling for 20% to 50% less, and a significant contributing factor for this is the number of foreclosures and short sales. Assuming these properties have been exposed to the market and have no significant limiting conditions, appraisers see them as most reflective of the current market. More simply put: if you and your neighbor have like properties, all other factors being equal, the lowest priced home will sell first. This fact is what currently drives the market. “Distressed” inventory or not, it is a buyer’s market and buyers are looking for a deal.
Our staff has over 28 years of combined real-estate appraisal experience and is able to handle any project, no matter what different complexities of the market are at the time.
Tom Ogle, General Certified Appraiser
Mike Krasula, General Certified Appraiser
Nora Farrand, General Certified Appraiser
Jackson Hole Real Estate Associates LLC
307-739-1104 – tomogle@jhreassociates.com
JACKSON HOLE REAL ESTATE ASSOCIATES LLC is the largest locally owned and operated Real Estate Company in the region. Our team is comprised of 90+ agents, appraisers and support staff, as well as, a powerful database that leverages information for our clients, daily tracking of every single real estate transaction in Jackson Hole. Combine all this with the worldwide reach of Christie’s International Real Estate, the simple fact remains: We Know the Market Better than Anyone.
It is very clear that buyers and sellers demand to stay informed of market conditions. We offer several services that will keep your finger on the pulse of our local real estate market, from daily email updates, weekly distressed properties list, a free market analysis of your property, to quarterly price updates on your Jackson Hole property. Please contact us to learn more about the programs and services we can provide. Be sure and also check out our website www.jacksonholeresortproperties.com for the latest listings and news about our local market.
Christie’s International Real Estate is the only real estate network wholly owned by a fine art auction house. The network is uniquely positioned to follow the footprint of its parent company, Christie’s, into the growing markets of the Middle East, Russia, and China, as well as established economies across the world, most notably North and South America and Europe. The new name further underscores that the values that distinguish Christie’s—commitment, expertise, integrity, discretion, and five-star customer service—are likewise embedded in the company’s luxury residential property specialists.
Christie’s International Real Estate represents some of the most prestigious trophy properties in the world, which include estates, resort properties, second and third homes, and super-prime new-build developments. Properties have included Lord Andrew Lloyd Webber’s Trump Tower Residence in New York City; Lyons Demesne, the historic Irish landmark fully restored by Dr. Tony Ryan; Ingmar Bergman’s island retreat in Sweden; and the Astor Beechwood Mansion in Newport, Rhode Island. Among the most valuable properties currently in the Christie’s International Real Estate portfolio are Palais Montmorency on Avenue Foch in Paris, France, valued in excess of US$100 million, and Cornwall Terrace, the historic Grade I–listed Regency terrace in The Regent’s Park, London, which was recently voted the most significant luxury property development in the United Kingdom.
News from the Christie’s Network
Jackson Hole Real Estate Associates named Global Affiliate of the Year: “This year, Small is Mighty.”
With those words, I announced Jackson Hole Real Estate Associates as the Christie’s International Real Estate Affiliate of the Year for 2011 in London last month. Your trusted property advisors in Jackson, your friends, and your neighbors were duly recognized worldwide for excellence in marketing and client service.
Affiliate of the Year is the highest honor bestowed to brokerages in the Christie’s International Real Estate global network. Deserving semi-finalists this year hailed from Jupiter Island and Boca Raton, Florida; Lugano and Ticino, Switzerland; Stockholm, Sweden; Montreal, Canada; Atlanta, Georgia; and Washington, D.C.
Among the contenders for the award was the esteemed firm of Hilton & Hyland in Beverly Hills, California, which achieved the network’s top sale of Candy Spelling’s estate to Formula One heiress Petra Ecclestone for $85 million this summer. Jeffrey Hyland was among the first to congratulate the Partners and Brokers of Jackson Hole Real Estate Associates on their company’s success.
Jackson Hole Real Estate Associates would be honored to support you in the purchase of your next important property or the careful sale of your distinguished home. I am confident that the company and its brokers will provide you with the expert, trusted advice and customer service together with the worldwide marketing excellence of luxury residential property, which distinguishes Christie’s International Real Estate.
Neil P. Palmer, MRICS
Chief Executive Officer
Clayton Andrews Appointed to Head Central Region: We are delighted to welcome Clayton Andrews as Senior Vice President and General Manager of the Central Region. Clayton assumes responsibility for our existing Affiliate and Bespoke relationships in the Central Region, and aims to significantly expand this important business to the benefit of our global network. Clayton brings to his position more than two decades of luxury residential real estate experience. From 1991-2003, he served as a partner and member of the board of directors for Jackson Hole Realty in Wyoming. He sold his company to Sotheby’s in 2003, becoming Executive Vice President and Chief Operating Officer for the Mountain Region, overseeing more than 400 brokers and growing his area into a market leader.
Jackson Hole Real Estate Associates is the regions largest locally owned and operated real estate brokerage. As the exclusive affiliate of Christie’s International Real Estate, Jackson Hole Real Estate Associates provides access to a worldwide audience with more than 1000 real estate offices in 42 countries and transactions resulting in over $125 billion annually. The reputation of Jackson Hole Real Estate Associates for exemplary client service and market knowledge combined with the power of Christie’s International Real Estate, the largest network of independent real estate firms, offers a synergy between local strength and global networking. By cultivating this unique balance of worldwide scope with a personal touch, through Christie’s International Real Estate, Jackson Hole Real Estate Associates has become a global authority on the effective marketing of fine properties. Finely tuned marketing services, and a commitment to the business philosophy established by Christie’s in 1766, define a brand based on trust, integrity, discretion, and excellence.
THE HOLE REPORT is published semi-annually, with additional email updates for the first and third quarters. While others attempt to report on our market with MLS statistics only (MLS historically tracks about 70% of the market) we track every single transaction in Teton County. This data-driven report is the most accurate and trusted real estate news source in Teton County, Wyoming. If you would like to sign up for these quarterly email updates, or need more detailed information about our market, feel free to either call or email us at one of the numbers below.
Whether you are pricing your property to sell in this competitive market, or deciding when the right time to buy is; rest assured that when you are our client, you will have current market statistics, an impeccable level of service and personal attention that will give you the upper hand. For a free no-obligation comparative market analysis please email davidviehman@jhrea.com
We hope this report has given you a snapshot of market trends and, as always, we would be glad to discuss them further with you. If you plan to list your property this spring, would like a more detailed analysis of specific areas, back issues of THE HOLE REPORT, or a professional Realtor to represent you in your next real estate transaction, please call or email one of the numbers below or write to P.O. Box 4897, Jackson, WY 83001, Attn: David Viehman or Devon Viehman-Wheeldon.
Sincerely,
David E. Viehman – Owner/Editor, Associate Broker
Devon Viehman-Wheeldon – Owner/Editor, Associate Broker
direct: 307-734-9941
toll-free: 888-733-6060 x9941
email: davidviehman@jhrea.com
www.jacksonholeresortproperties.com
www.jhreassociates.com
*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 2010 compared to sales in 2011.
*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.
*While other local Real Estate Brokerages attempt to report on the local real estate market, Jackson Hole Real Estate Associates 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”.
© Copyright 1995 – 2012 by David E. Viehman and Devon Viehman-Wheeldon dba Jackson Hole Real Estate Associates 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.
Overall Market 2011 Third Quarter Report
Properties Priced Under $500K Disappearing
Affordably priced inventory is rapidly disappearing, at least in the single-family and condo/townhome segments of our market. Just three years ago, the idea of purchasing a single-family home in Jackson Hole for under $500,000, or a condo/townhome for under $300,000, was just a fleeting dream. Today, not only can this dream become a reality, but you also have multiple choices, and loan interest rates are at historic lows. Do not expect this to last much longer, though. Based on the current level of sales activity versus active listings, the opportunity to purchase an affordable home or condo/townhome in these price ranges will soon disappear.
In the first nine months of 2011, there were 22 single-family homes that closed for under $500,000. In the same time period, there were 31 condo/townhomes that closed for under $300,000. Also worth noting: at the time of this report, there are 6 homes and 7 condo/townhomes currently under contract in these price ranges. Then consider the current available inventory in these price ranges (only 23 homes and 32 condo/townhomes), and it becomes very clear the demand is outpacing supply. If demand for these properties in these price ranges continues at the 2011 level, we anticipate the supply to run out by the end of 2012. This will, of course, depend on how much more distressed inventory hits the market in the coming months. Based on current trends however, distressed properties may not play as big a role as they have in the last two years (read on for details…).
This demand is great news, as the under $500,000 segment of our market is where 52% of distressed sales were so far in 2011, and where 58% of the current distressed listings still reside. Once Jackson Hole is free of distressed listings we will start to see appreciation return to our market.
Where are these affordable-minded Buyers coming from? Of the 82 sales for under $500,000 so far this year, 56 of these buyers (or 68%) were local residents. NOTE: Of the 82 sales, 35 of the properties (or 43%) were purchased with all cash and no financing.
Distressed Properties: While the distressed properties are still controlling market values, we are seeing not only a decrease in active distressed listings (down 19%), but also a shift in the type of distressed properties being sold. Up until last spring, short sales were dominating the distressed listing market. “A short sale is when the proceeds from selling the property will fall short of the balance of debts secured by mortgage liens, and the property owner cannot afford to repay the liens’ full amounts, whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.” Today, we are seeing more bank-owned listings, and very few new short sales. We track the distressed activity on a weekly basis, and this past week’s number of active foreclosures was the smallest it has been in over two years, with only five on the list as of October 21, 2011. In the first nine months of 2011, the overall number of distressed properties (short sale, foreclosure, and/or bank owned) accounted for 21% of the overall sales. That is a 40% increase in distressed sales when compared to the first nine months of 2010.
Looking closer, we found 5% of all active listings are distressed; yet 21% of the overall sales were distressed at some point in 2011. Why such a disparity between the overall distressed listings and the overall distressed sales? It all boils down to perception. While many of the sellers in 2011 have aggressively priced their listing to compete with the distressed inventory, many buyers simply ignore these non-distressed listings until they have reviewed all distressed inventory in their price range. As mentioned above though, distressed properties are decreasing. Hopefully this pattern will continue, so buyers will again focus on some well-priced non-distressed inventory. NOTE: 79% of the 63 distressed sales in 2011 sold for under $1 million, with 49% of the 63 sales closing for under $500,000.
As mentioned above, the distressed properties are still controlling our market. Realistically, the next 12 months could bring further discounts in certain segments of the market. The upcoming wave of bank-owned properties (REO’s) will certainly create a challenge for some sellers because they must compete with the aggressive pricing of these bank-owned properties. National banks and mortgage company REO listings in Jackson Hole have historically hit the market at 20% to 30% below current market values. Banks are not in the business of owning and managing real estate. So, once these properties have weathered the foreclosure process and the banks receive clear title, banks want to sell them quickly and write off any losses.
To sign up for our weekly-distressed properties list, and take advantage of some great upcoming REO properties, call 307-734-9941 or email: davidviehman@jhrea.com
Cash is still King: 52% of all the real estate transactions thus far in 2011 have been cash buyers who did not secure any financing. Why so many cash Buyers? Savvy Buyers knew their hard-earned cash could guarantee the Seller a closing without relying on banks to loan buyers money. What savvy Seller wouldn’t take a good, long look at an offer that does not include the wild card of a financing contingency? After all, cash deals close escrow quickly and easily, while offers requiring financing require 45+ days with several potential snags along the way. So naturally, Sellers covet cash offers. For distressed properties, a cash offer close to the target price will many times trump a higher-priced offer with a loan. The ability to close has become just as, if not more, important to sellers as price. NOTE: 45% of single-family home sales were cash, 87% of vacant lot sales were cash, and 51% of condo/townhome sales were cash. Also worth noting is that 58% of all cash transactions were for properties priced under $1 million.
Our complete 1st & 3rd quarter reports are not posted on this website, but instead are only available by email. To receive the rest of this third quarter report, and sign up for all four quarterly reports via email please sign up here.
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Overall Market 2011 Mid-Year Report
Buyer Focal Point Shifts
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BUYER FOCAL POINT SHIFTS: As we review the market data for the first half of 2011 it is clear that Buyers are honing in on the low-end of our market. The actual shift in the Buyer’s focal point started last fall, when prices had softened so much that investors and speculators alike started jumping into the market. For example, 69% of all sale prices this year were under $1 million, versus 55% in 2010 and 40% in 2008. This shift was mainly in the single-family homes and condos priced under $1 million. The number of sales in these market segments increased by 45% and 66% respectively. Also worth noting is the number of homes and condos that closed for under $500k. There were 16 homes (up 167% over 2010) and 40 condos (up 122% over 2010). The condo sales under $500k actually accounted for 57% of all condo sales so far in 2011, and of those 40 sales 22 sold for under $300k.
Who are these Buyers? When looking at both single-family home and condo purchases in 2011 we found that 38% of home sales, and 54% of condos sales, were cash. Typically cash buyers are not the local work force, but instead are out of town investors and speculators. If you had $500k in cash, you could leverage your money to purchase a home closer to $2 million. Clearly these investors and speculators do not plan to live in their recent purchases, but instead are taking advantage of low prices and a strong rental market. Many of these cash buyers are realizing a 5% to 8% return on their money, and at the same time buying at the bottom of the market. Now their money is working for them (income and depreciation) and they can hold onto this real estate investment until the market returns. Then they will sell for a healthy profit, or possibly renovate and use the property as a vacation home. NOTE: We are seeing a depletion of inventory in this segment, which in turn will help prices stabilize. If the low-end (under $500k) single-family and condo sales continue at this brisk pace we could be out of available inventory in less than 12 months. In fact, we could start to see some appreciation in this segment as the inventory is depleted.
Why is the single-family home and condo rental market so tight? This is due to five things; no new first-time homebuyers, who will continue to rent; no new construction of rental type properties, like apartments; owners who were forced to sell short or were foreclosed on, who have chosen to stay in the valley; construction workers moving back to Jackson Hole, as the majority of work in the region is here; the Jackson Hole economy is picking back up, creating more seasonal demand on rentals; and the recent failure to approve the cottage ordinance, which would have provided an incentive to build small but affordable cottages. Combine all the above and the message is clear, rental properties are the next hot real estate ticket in Jackson Hole.
THE OVERALL MARKET continues to show signs of a recovery. The number of sales is up 24% and dollar volume is up 10%, when compared to July 1, 2010. As mentioned above, what has changed is the price point Buyers are focusing on in 2011. The percentage of properties sold for under $1 million is up 55% from last year, or 67% of all sales. The last time we experienced this high a percentage of sales under $1 million was in 2005, when the overall average sale price first broke the $1 million mark (overall average price in 2005 was $1,098,000). The upper end market is also feeling the Buyers focus shifting, especially in the $3+ million segment where the number of sales is down 41% when compared to July 1, 2010.
Overall available inventory also shifts. While the number of active listings is down 9%, the overall dollar volume is down 21%, when compared the July 1, 2010. When looking closer at the available inventory, nearly 50% is listed for under $1 million and 167 listings, or 22% of available inventory, is currently listed for under $500k. The largest decrease in inventory is the $5+ million-price range, where available inventory is down 24%. NOTE: According to the National Association of Realtors (NAR) the average amount of available inventory nationwide is 9.7% of the area properties versus 6.5% of all properties in Jackson Hole, as of July 1, 2011. This is another indicator of the strength of our market.
Reoccuring inventory is holding back our market: The reoccurrence of seasonal inventory, and the typical lack of motivation in these sellers, is holding back our market. Consider the following; Of the current 769 listings, 543 have been on the market for more than 12 months; 293 have been on for 24 months; and 170 have been on the market for more than 36 months. These sellers, who would sell at the right price, are clearly not motivated to sell at today’s market value and would prefer to wait for the market values to return. The problem with this reoccurring seasonal inventory is it creates a false perception of supply, thus holding back many Buyers from jumping into our market. After all, without a sense of urgency, many Buyers choose to remain “on the fence” and not make offers because it appears that there is plenty of inventory from which to choose. If just half of the reoccurring inventory were removed from the market these sellers would see their goals of a high sale price realized sooner.
Overall properties under contract is a promising increase. The number of properties under contract is up 23% when compared to July 1, 2010. Two more important notes: 1). The overall dollar volume under contract is down 11%, and 2). The average and median list prices are also down 28% and 38% respectively. These two facts support this report’s overall theme that Buyer’s are focusing on sub-$1 million inventory. In fact when you look at the price points under contract 67% are listed for under $1 million, and 35% (17) are listed for under $500k. The upper end market is also feeling the Buyer’s focus shift. The over $1 million range has 38% fewer properties under contract when compared to July 1, 2010.
DISTRESSED PROPERTY WATCH: While short sales, foreclosures and bank-owned properties are still affecting some of our market values, many areas of our market are now on solid ground. Looking at the overall number of sales in the first six months, 21% (40 sales) were considered distressed. Compare that number to what is currently on the market (769 listings) only 6.6%, or 51 listings, are considered distressed. While there are some areas and segments of our market with higher percentages of distressed property listings (16% of the Town of Jackson condo listings and 8% of the Town of Jackson single-family homes listings), most areas have less than 3% of inventory that would be considered distressed. The distressed sales so far this year have also experienced a shift in the Buyer’s focus, as over half the distressed sales this year were below $500k (21) versus only 5 sales below $500k the first half of 2010.
The type of distressed active listings is shifting. We started tracking distressed properties on a weekly base 21 months ago. Until recently, short sale listings dominated the distressed inventory. Short sales are the first phase in distressed properties. If the seller cannot sell short (meaning getting their bank or lending institution to accept a Buyer’s sales price lower than the loan amount), or convince their bank to refinance their mortgage, then the next step is a foreclosure auction. If the seller cannot redeem their property during the redemption period (technically 3 months in the State of Wyoming) then the property typically reverts back to the bank. Bank owned (REO) properties are the last phase in distress. Once bank owned, distressed listings tend to spend less time on the market before they are purchased. Why? Banks are not in the business of property management. Therefore they will aggressively price the property, and continue to reduce the list price regularly and quickly, until it sells. This shift in the type of distressed listings gives us hope that the end of distress real estate in Jackson Hole is coming. To sign up for our weekly distressed-properties list call 307-734-9941 or email: davidviehman@jhreassociates.com
CASH IS STILL KING: As mentioned last year, lending guidelines are still tight. When taking a close look at all sales transactions in the first quarter of 2011, we found 50% of all Buyers are still paying cash (down 9% from 2010). Why so many cash Buyers? Savvy Buyers know their hard-earned cash can guarantee a Seller a closing without relying on the banks to loan them money. What savvy Seller wouldn’t take a good, long look at an offer that does not include the uncertainty of the Buyer securing financing? After all, cash offers close escrow quickly and easily, while offers with financing require 45+ days with several snags along the way. So naturally, Sellers like cash offers. Cash Buyers also realize their hard-earned money is not making much of a return just sitting in the bank. For short sale and bank owned properties, a cash offer that’s below the list price will usually trump a higher-priced offer with a loan. The ability to close has become just as, if not more, important to banks as price. Another sign the buyer focal point has shifted is the price segment of these cash transaction Buyers; Out of the 94 cash transactions, 60 (64%) were under $1 million and 31 were under $500,000.
LOOKING AHEAD: We are predicting a slow recovery to continue through 2012. Expect to see available inventory deplete and the number of sales continue to climb. The depletion in inventory will be attributed to three points; the stability of our housing market (distressed sales ending); no new construction projects; confidence in the local and national economy.
Based on the number of active listings, we are again predicting that only 25% of the current listings will sell by the end of 2011. If you want to be part of the fortunate ones who do sell in 2011, be sure to price your property to compete. Remember, in order to be a successful Seller in this market, you need to think like a Buyer. The #1 desire of all buyers in today’s market is to find a great value. So, talk to your Realtor about an effective pricing strategy for your property.
AFFORDABLE HOUSING ANCHORS OUR COMMUNITY:
An anonymous person once said “change is inevitable; progress is optional”.
While we may never know the context in which this comment was originally made, it is certainly applicable to the relationship between our evolving economy in Jackson and affordable housing.
The recently published 2011 Jackson Hole Compass summarizes the evolution of our economy in Teton County: by looking backwards at where our economy has been and where we are today (with the benefit of 2010 census data), the author forecasts the decline of our community’s middle class. In spite of this loss, the author also projects that Jackson Hole will, over the next several years, become much wealthier thanks in part to Wyoming’s income tax-free status.
By extension, the author notes that the gentrification that will result will “ripple through all facets of life in Jackson Hole; not changing things on the surface necessarily, but clearly altering everything from the community’s politics to its non-profits”.
This summer, our community’s three local housing organizations are continuing to take steps forward to retain the middle class and preserve a strong, vibrant and healthy community. In a unique partnership between the Teton County Housing Authority and Habitat for Humanity, construction has begun on a 12 unit affordable housing neighborhood on four town lots identified and secured by the Jackson Hole Community Housing Trust. Further down the road in east Jackson, the Housing Trust is breaking ground on eight new homes for dedicated members of our workforce.
None of these efforts would be possible without the steadfast encouragement and support of elected officials, donors, neighbors, taxpayers and volunteer board members— hundreds of people that are passionate about preserving the backbone of our community to help maintain our quality of life. Thanks to their commitment, 20 new families in the spring of 2012 will be able to call Jackson Hole home; these 20 families will join over 450 households, all of whom significantly anchor and enrich our community.
If you are interested in learning more about affordable housing, please contact any of our organizations.
FROM THE APPRAISAL DEPARTMENT: Federal Reserve Chairman, Ben Bernanke, stated recently, “Housing is a big reason that the current recovery is less vigorous than we would like.” It is basically more of the same slow and boring recovery, but it is a recovery nonetheless and eventually housing will feel the effects. With lower unemployment and continued economic growth, we should begin to see a slow national and local housing recovery throughout the remainder of the year.
Our 33rd President, Harry S. Truman was quoted as saying, “It’s a recession when your neighbor loses his job; it’s a depression when you lose yours.” Similarly, when the housing market recession began and ended is largely dependent on your point of view. For many home-owning Teton County residents the Truman definition rules their personal sense of when the housing recession began and the uncertainty of when it will end. The housing crisis became real when prospective listing agents told them what the comparable sales looked like for their home, or when they received their county assessor tax notice and they noted their property taxes were being reduced, or when they realized they had to sell their home at a loss if they wanted it to sell in the current environment, or when their mortgage payment began increasing and they realized they could not refinance the loan because their home appraised for less than their current loan balance.
The housing market is driven by supply and demand and the availability of credit. In Teton County we continue to have an over supply of available homes. It will take a draw down of this existing home inventory to restart demand for homes. In addition, builders and prospective homeowners are finding it difficult to finance a building project or purchase on terms that were common in the past. Per Chairman Bernanke, higher loan requirements have displaced about one-third of people who might have gotten mortgages in the years before the sub-prime crisis.
As the market rights itself, we are seeing an increase in the number of distressed transactions. Banks are selling off homes on their balance sheets and motivated sellers are moving on price in order to get their properties sold. This clearing process is painful but fundamental to the restoration of a healthy real estate market.
Another driver of demand is increase in population. Even during the national contraction, the county has continued to grow. Between the 2000 and 2010 census, Teton County increased by 3,044 people, for a total population of 21,294. This is a 16.7% percent increase from April 2000, to April 2010, compared to an overall 14.1% increase in the state as a whole during the same time period.
The Teton County economy relies heavily on the tourism industry. In the third quarter of 2010, the valley economy supported 19,791 jobs. This is approximately 8.5% below the reported 21,630 jobs in the third quarter of 2008, just before the credit crisis precipitated the national recession. In the third quarter of 2010, the accommodation and food services sector accounted for $51 million in wages for the county.
Visitation to Wyoming’s national parks hit another record. The number of recreational visitations to Yellowstone and Grand Teton National Parks reached 223,279 and 232,486 in the fourth quarter of 2010, up 47.5 percent and 14.3 percent, respectively, from the previous year level. Conversely, Teton County lodging receipts experienced an annual decrease of 7.9 percent for the fourth quarter, despite the record-breaking visitation figures. The weak national economy apparently impacted tourists’ spending ability and decisions on lodging options and length of stay. Hotel owners may have discounted their rates in order to keep occupancy rates up. As the global and national economic recovery continues, the tourism industry should benefit, though the rising gasoline prices may have negative implications. The county continues to be a desirable location for recreation and appeals to many people who want to be near the popular tourist locations of the national parks and Jackson Hole.
As we consider Teton county conditions we have reason to be optimistic. The area still enjoys a strong tourism industry. Employment and wages remain relatively stable. Employment opportunities combined with a favorable tax environment continues to draw people into the state increasing population and household formation. Wyoming has avoided the public employee pension trap that so many other states have fallen into. Additionally, the state and county finances are in the main fiscally solid.
In the end, economic indicators point to a slow housing recovery throughout 2011, which leads to a healthier housing market locally.
Our staff has over 28-years of combined real-estate appraisal experience and is able to handle any job, no matter what the different complexities of the market are.
Tom Ogle, General Certified Appraiser
Jackson Hole Real Estate Associates LLC
307-739-1104 – tomogle@jhreassociates.com
Devon Viehman Wheeldon recognized as one of REALTOR Magazine’s ’30 Under 30′ Every year Realtor Magazine features 30 rising young stars in the real estate industry. “They are a stellar collection of passionate and motivated young professionals at the vanguard of real estate. With their strategic vision, deep commitment to clients, outstanding leadership, innovative uses of technology, and active community involvement, these individuals provide a promising snapshot of the real estate industry’s future.”
When asked about her success; “The tool that sets me apart from the competitors is our data-driven market newsletter, The Hole Report,” says Viehman-Wheeldon. “This semiannual newsletter, positions our team and our company as the local experts. The report fills a real need because the state of Wyoming doesn’t require that property transfers be made public, so sales and prices can be difficult to track. JHRE Associates maintains the most comprehensive database in the market which includes every transaction in Teton County and ultimately provides a real edge for our agents, our buyers and our sellers,” continued Viehman-Wheeldon.
JACKSON HOLE REAL ESTATE ASSOCIATES LLC is the largest locally owned and operated Real Estate Company in the region. Our team is comprised of 95+ agents, appraisers and support staff, as well as, a powerful database that leverages information for our clients, daily tracking of every single real estate transaction in Jackson Hole. Combine all this with the worldwide reach of Christie’s International Real Estate, the simple fact remains: We Know the Market Better than Anyone.
It is very clear that buyers and sellers demand to stay informed of market conditions. We offer several services that will keep your finger on the pulse of our local real estate market, from daily email updates, weekly distressed properties list, a free market analysis of your property, to quarterly price updates on your Jackson Hole property. Please contact us to learn more about the programs and services we can provide. Be sure and also check out our new website www.jacksonholeresortproperties.com for the latest listings and news about our local market.
Today the Christie’s International Real Estate global network of affiliated brokers includes nearly 36,000 sales associates operating from 900 offices in more than 40 countries. The network’s combined annual sales topped $128 billion. The combined global networks of Christie’s, and Christie’s International Real Estate, both market leaders in the sale of luxury goods, create a world-class showcase for distinguished real estate. No other network offers this level of international visibility to proven buyers of high-value property.
The Hole Report is published semi-annually, with additional email updates for the first and third quarters. While others attempt to report on our market with MLS statistics only (MLS historically tracks 65-70% of the market) we track every single transaction in Teton County. This data-driven report is the most accurate and trusted real estate news source in Teton County, Wyoming. If you would like to sign up for these quarterly email updates, or need more detailed information about our market, feel free to either call or email us at one of the numbers below. You can also find “The Hole Report” online at www.jacksonholereport.com
Whether you are pricing your property to sell in this competitive market, or deciding when the right time to buy is; rest assured that when you are our client, you will have current market statistics, an impeccable level of service and personal attention that will give you the upper hand. For a free comparative market analysis please email davidviehman@jhreassociates.com
We hope this report has given you a snapshot of market trends and, as always, we would be glad to discuss them further with you. If you plan to list your property this fall, would like a more detailed analysis of specific areas, back issues of The Hole Report, or a professional Realtor to represent you in your next real estate transaction, please call or email one of the numbers below or write to P.O. Box 4897, Jackson, WY 83001, Attn: David Viehman or Devon Viehman-Wheeldon.
Sincerely,
David Viehman, Owner/Associate Broker
Devon Viehman-Wheeldon, Owner/Associate Broker
“Realtor Magazine’s 30 Under 30 – Class of 2011”
Jackson Hole Real Estate Associates, LLC
Exclusive Affiliates of Christie’s International Real Estate
The Jackson Hole Report
toll-free: (888)733-6060 x9941
direct: (307)734-9941
fax: (307)734-9973
http://www.jacksonholeresortproperties.com
http://www.jacksonholereport.com
http://www.jhreassociates.com
*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 2010 compared to sales in 2011.
*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.
*While other local Real Estate Brokerages attempt to report on the local real estate market, Jackson Hole Real Estate Associates 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”.
© Copyright 1995 – 2011 by David E. Viehman and Devon Viehman-Wheeldon dba Jackson Hole Real Estate Associates 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.
Overall Market 2011 First Quarter Report
“Help Plan Jackson Hole “
The biggest real estate news for the first three months of 2011 is the culmination of our Teton County comprehensive plan. After three years of ongoing debate, input from both the public and hired experts in the field of community planning, plus thousands of hours of hard work by our elected officials, the plan is close to being approved. This update in our comprehensive plan will guide the next ten to fifteen years of development inJackson Hole. It will potentially affect property rights and values, and will ultimately determine what the valley will look like in perpetuity.
The debate today focuses on this question: how to handle the current build-out of existing deeded properties? Here is an example of what the commissioners face, just on the Westbank; currently there are approximately 500 platted and entitled vacant single-family lots on the Westbank. Of those less than 5% are obtainable by what is considered workforce housing, as the average price would start around $500k and quickly jumps to well over $1 million. This means at least 450 new second homes, or future retirement homes, can still be built on the Westbank. NOTE: 65% of the vacant single-family lots are north of Hwy. 22. Then consider the larger tracts of land on the Westbank, not yet protected by conservation easements. According to the Teton County GIS, this totals over 4,000 acres. A Wyoming State statute entitles these landowners to break up their properties into 35-acre minimums without Teton County approval. This means, even if you strip away the existing property rights of subdividing a 35-acre tract into three single-family parcels, you still have the potential of an additional 115 second or retirement homes, for a total of 600+ new homes, just on the Westbank.
Now, considering the fact that 95% of these new homes are not workforce housing. Where will this additional demand for workforce live, in order to support these new homeowners. Should they drive over the pass from Idaho, or from the Town of Jackson? Should the commissioners focus on Wilson, The Aspens area or Teton Village for the additional workforce housing? Depending on the answer, then how will this decision affect transportation, infrastructure, wildlife migration and wildlife habitat?
Let’s stop the sprawl in our valley and come up with a plan to help build community! Extinguishing development rights through direct purchase of the large open spaces left in Jackson Hole is not an option. Based on current large parcel values, with much of the land having live water running through it,Teton County would have to spend over $500 million, on the Westbank alone. We have to have a solid plan. No one wants additional growth in TetonCounty. However, growth is inevitable because of all the current entitlements. Therefore, let’s focus our collective energy and intelligence on creating smart growth principles that include maintaining fairness for landowners, zoning for workforce housing, conservation of open space and a sustainable jobs base. We want to continue the quality of life that comes with community values, open space, and co-existing with wildlife.
If you are unable to attend the public comment meeting on April 27, 2011 go to www.planjh.org www.jacksontetonplan.com or www.jhalliance.org to learn about the issues and to share your comments with our elected officials. Your voice will be heard, and you can make a difference. NOTE: Most communities do not plan to fail, they simply fail to plan! Please do not let this happen to Jackson Hole. Make your voice heard and then support our elected officials…..
Our complete 1st & 3rd quarter reports are not posted on this website, but instead are only available by email. To receive all four quarterly reports via email please sign up here.
