Click here for the 10 year overall graph

Welcome to the twenty-fifth issue of The Hole Report. Published semi-annually, this data-driven report is the most accurate & trusted real estate news source that keeps all of Teton County well informed on our ever-changing market.

IS THERE AN AFFORDABLE HOUSING CRISIS? If you’ve been living in Jackson Hole for the past 10 years you know the demand for affordable housing has grown at a feverish pace. At the same time, the price of homes and condos has increased so fast that few local workers will ever realize home ownership. After a thorough review of the enclosed year-end numbers, no one will doubt the need for affordable housing has reached a crisis mode. Here are a few examples:

According to the Housing Authority: the maximum price for a single family home, to be considered affordable, is $201,700. The maximum for a condo is $182,034.

Compare the above numbers to the least expensive home currently on the market ($615,000) and the least expensive condo currently on the market ($389,000). Then consider the end of year median sale prices; single-family homes $1,150,000 and condos $565,000.

IS THERE A WAY TO FIX THE CRISIS? Whether you are for or against affordable housing, 2008 is the year to stand up and be heard. Two events unfolding this year will likely shape the future of affordable housing in Jackson Hole and the future cost of living.

One of those events is the overhaul of the Teton County and Town of Jackson Comprehensive Plan. The amount of required affordable housing for developers is at the center of the overhaul. The toughest decision will be: how high can one push the affordable housing requirements and not wipe out the incentive to develop?

The other event is the approval or denial of Teton Meadows Ranch, a 500-unit subdivision in South Park, which proposes to deed restrict 80% of its units. The amount of affordable housing is not at the center of controversy though; it’s the density of the project and its location. Why is this event likely to shape Jackson Hole’s future? The cost of housing has increased so fast, the ability to catch up with affordable demands can only be accomplished with a large chunk of affordable inventory. Affordable housing officials estimate the current demand to be over 500 units, so this project could close the gap significantly. The outcome of this event will answer the question: with the scarcity and high cost of large tracts of developable land, can a developer meet the affordable housing requirements and make a profit, too?

WHEN TO STAND UP AND BE HEARD? If you want to get involved in not only shaping the future cost of housing in Jackson Hole but also the future cost to live here, stand up and be heard. To find the schedule of public meetings for the Comprehensive Plan overhaul go to: www.jacksontetonplan.com

To learn more about Teton Meadows, attend the Open House hosted by Teton Meadows Ranch and Jackson Hole Community Housing Trust on January 29th, 2008 from 6:00pm to 8:00pm at the Community Bible Church, 1450 South Park Loop Road. If you can’t attend the meeting you can learn more by going to: http://tmr-jh.com/project.htm

To learn more about affordable housing and the agencies who regulate go to: www.jacksonholereport.com/affordable.html

CRUNCHING THE NUMBERS FOR 2007:
The overall market (all home, lot, condo and commercial transactions or listings) in 2007 experienced the strongest rise in appreciation for any given year this century. The only part of the market that didn’t experience an increase was the overall number of sales, down 4% when compared to 2006. Not to worry though, the decrease can be directly linked to a lack of affordable free-market housing. The dollar volume was up 19% to over $1.576 billion, the average sale price was up 24%, and the median sale price was up 27%. The upper-end market (over $1 million) continues its record-breaking climb with 23% more sales, or 433 transactions. Of those transactions, 120 sold for over $3 million (up 60%) and 49 sold for over $5 million (up 63%).

OVERALL REAL ESTATE CURRENTLY UNDER CONTRACT is showing signs of the market really heating up. The number of properties currently under contract is up 112% when compared to the end of 2006. The dollar volume is up 87% (over $584 million) and the median list price is $2.7 million (up 288%), when compared to year-end 2006.

CURRENT OVERALL AVAILABLE INVENTORY has increased 19% when compared the end of 2006. While this is the first time in five years we have seen an inventory increase, at years end, available inventory in Jackson Hole is still at an historical 20-year low. Meanwhile, the overall median listing price climbed 4% to $1.8 million, and the overall average price of properties listed was $3.5 million (up 2%). The dollar volume of available properties, as of January 1st, was up 22% to $1.365 billion.

LOOKING INTO THE NEAR FUTURE: The only hope for significant new inventory, in the next 12 months, is the proposed Teton Meadows Ranch. Teton Meadows has the potential to satisfy a large percentage of the current affordable housing needs. Note: Teton County has already protected over 98% of the entire valley from development through conservation easements, wetlands protection, and public land holdings.

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. For a more complete analysis go to the web site listed below. The value of any individual property may, and probably will, vary from the average indicated in these graphs.

Jackson Hole Real Estate & Appraisal, LLC has served the Jackson Hole community for over forty years. With a team of 30+ 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!

Your Locally Owned and Operated Real Estate Company is located at 455(B) W. Broadway. You can also visit our virtual office website at www.jhre.net or email Devon and David for more information at david@jhre.net.

If you 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 7436, Jackson, WY 83002, Attn: David Viehman.

Sincerely,

David E. Viehman – Owner/Broker, Editor
Devon Viehman – Sales Associate, Co-Editor
Jackson Hole Real Estate & Appraisal, LLC
email: david@jhre.net
www.jacksonholereport.com
307.733.3436 ext. 111
800.735.8385 ext. 111

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

*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 quoted in this newsletter are based on sales in 2006 compared to sales in 2007.

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

*Overall real estate statistics are a combination of all home, lot, condo and commercial transactions or listings.

© 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 explicitly written permission from David E. Viehman.

This site will be updated again on July 31, 2008

OVERALL AVAILABLE INVENTORY continues its downward trend with 11% fewer properties available for sale compared to July 1, 2006. This lack of inventory continues to push the asking prices into a whole new realm. As of July 1, there were 295 properties listed for over $1 million (80% of the currently available inventory). Of those, 118 were listed for over $3 million, 66 for over $5 million, 33 for over $10 million and believe it or not 10 over $20 million.

We see this pattern of low inventory levels continuing. In fact, the number of available properties has not been this low in decades. Overall, this lack of inventory coupled with the high demand will only continue to fuel our Housing Crisis.

OVERALL PROPERTIES UNDER CONTRACT also had a great showing in number of Buyers, up 37% from the same period in 2006. The dollar volume under contract wasn’t far behind with an increase of 32%. The strongest showing in the market is the $1+ million and the $3+ million segment, where the number of properties under contract is up 84% and 133% respectively.

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.

THE HOT SPOTS SO FAR THIS YEAR are condo/townhomes under $750,000 (least expensive condo available is $512,500), all vacant residential lots under $1 million (only 20% of available inventory is under $1 million), and all homes under $1 million (only 13 homes for sale under $1 million, or 10% of available inventory as of July 20, 2007). We’re seeing properties in these segments going under contract at, or very near, asking price. Some of the segments are experiencing bidding wars, like those in the late 1990s, in which buyers are making offers above the asking price in order to beat out multiple competitors. NOTE: If you have never purchased real estate in a hot market it pays to use a professional who understands what it takes to come out on top in a bidding war!

WHY ARE WE IN A HOUSING CRISIS? Unlike many parts of the country, Jackson Hole’s crisis comes from a lack of inventory. Many have long predicted Jackson Hole would one day run out of developable real estate, because of the limited privately held lands in JH (97% of Teton County is protected from future development). Well, the prediction has become the reality (see Jackson Hole Reality Check below). Current available inventory is at a twenty year low, yet we just experienced the second highest number of sales ever, for the first six months of any given year.

While the housing crisis is for affordable free-market homes, the cause of the crisis can be partly blamed on our need for affordable, subsidized housing. Teton County recently hired a consulting firm to determine housing needs and to address the affordable mix needed in new developments. According to the study, our current affordable housing requirements need to be almost doubled. Factor in the cost of vacant developable land, infrastructure cost, rising labor cost and combine them with our existing open space and density requirements and something has to give.

IS THERE ANY RELIEF? The answer could be no; especially if our affordable housing and conservation groups continue to clash over density, the cost of large acreage continues to escalate, lawsuits created by the NIMBY (not in my back yard) affect continue to put up roadblocks and the planning process continues to take two years (pushing the cost to receive approval through the roof). One has to wonder if it’s already too late?

IS THERE A SOLUTION? The market is crying out for new affordable “free market” housing or land to build a reasonably priced dream home. The following solutions are not popular but are about the only ones left:

The easiest solution might be to throw in the towel by putting the remaining large parcels into a conservation easement and tell the new homes buyers to commute to Alpine or Victor/Driggs. But then the problem becomes an issue of safety, additional mass transit and where to house key employees, who are required to live within 20 minutes of work. Worst of all, the bedroom communities then become self-staining and employees no longer are willing to commute thus putting an even greater strain on our employee shortage.

The smartest would be the “HIGH DENSITY IN-FILL COMMUNITY SOLUTION”. Start by looking for areas where high-density and infrastructure is already in place, and then in-fill. Where schools and work places are close, and a sense of community can be created while preserving our western character and natural resources. Only a handful of large parcels remain that have the room to build such a community (including the town of Jackson). The cost to acquire these lands won’t be cheap, but in these parcels lay the opportunity to control the crisis.

If the county decides to increase the affordable housing mix, they in-turn need to relax the density requirements and work to unite the various advocacy groups so time isn’t spent fighting the inevitable but instead in championing a better way to handle the increase of our local working class and strengthen our social fabric.

JACKSON HOLE REALITY CHECK:
The least expensive single-family home, currently on the market in Jackson Hole, is almost forty miles north in Buffalo Valley for $545,000. This means, with a 20% down payment, you would need to have a combined family income of over $125,000 to qualify for a conventional 30 year mortgage.

The least expensive single-family residential vacant lot, currently on the market in Jackson Hole, is twelve miles south of town on Horse Creek Mesa for $555,000. NOTE: The median priced actively listed vacant residential lot is $1.6 million.

The median sales price for a single-family home in the first six months of 2007 was $1,175,000. This means, with a 20% down payment, you would need to have a combined family income of over $250,000 to qualify for a conventional 30 year mortgage.

There are 137 homes currently listed for sale over $1 million. They break down as follows: 73 for between $1 and $3 million, 30 for between $3 and $5 million, 17 for between $5 and $10 million and 18 for between $10 and $40 million.

As the short list of developable land in Teton County continues to shrink, the value of this precious commodity continues to increase. Add to this scenario the almost certain increase in required affordable housing, without allowing increased density for new development in the coming years, and one has to wonder if the housing crisis is fixable. While several townhome and condo projects being built in 2007 will give some relief, the number of affordable homes fall way short of the growing demand.

WHERE ARE THE BUYERS COMING FROM?
In 2006 Jackson Hole recorded 950+ deeded real estate transactions. Here is where the Buyers came from:

Jackson Hole locals: 580 (60%of all Buyers)

Northeast: 90 (New York State recording the most Buyers)

West Coast: 86 (California recording the most Buyers)

Mid-West: 74 (Texas recording the most Buyers)

Western Mountain States: 62 (excluding Jackson Hole – Wyoming recording the most Buyers)

South: 56 (Florida recording the most Buyers)

Outside of the United States: 11

THE MEDIAN SALE PRICE: Why this is a more accurate number to focus on:
While we use both the average and median sale price when reporting the real estate news, the Jackson Hole market is better understood and tracked when using the median sale and list price. In some larger real estate markets, where the range of sale prices can be tightly compressed, the average sale price (the total sales dollar volume divided by the number of sales) is a fairly good indicator. But, in a market like Jackson Hole where the least expensive home for sale in July 2007 is $545,000 and the most expensive home for sale is $37 million, the average sale price becomes skewed very fast. With the average sale price as an indicator, if the market has a few really high-end sales ($10 to $20 million) in a given six month period it can appear that the market has heated up. On the flipside if the market has more low-end sales ($400 to $600k), it can appear the market is cooling down, which isn't always the case.

By looking at the median sale price (the cost of a property that has an equal number of sales above and below it on the price scale), the Jackson Hole market can be more accurately understood. It takes many more sales in a given price range to make the median sale price move and therefore isn't so sensitive to the time of year or the amount of money being spent on a property in any given six month period.

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 - 2007 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 2006 compared to the first six months of 2007.

*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).