Data-driven report for the first three months of 2013
Appreciation is the increase in value of a property over time due to inflation, supply and demand, capital improvements and other factors. In today’s local market, appreciation is due to supply and demand. Oversupply of properties the past few years caused our real estate values to fall, and now the undersupply is causing priced to appreciate. The availability of jobs, the level of interest rates, proximity to schools, shopping, parks etc., and desirability of an area are all factors that drive appreciation.
Where will we experience appreciation in 2013? At minimum we expect the single-family homes under $750,000 and condo/townhouses under $400,000 to appreciate in value. Appreciation in these segments is tied directly to supply and demand. Example #1: 28 homes sold for under $750,000 so far in 2013, 18 are currently under contract, and only 20 homes are currently listed for under $750,000. Example #2: 25 condo/townhomes sold for under $400,000 so far in 2013, 16 are under contract, and only 22 condo/townhomes are currently listed for under $400,000. Clearly there is a real lack of inventory in these two segments.
The Overall Market
The overall market in Q1 2013 is kicking the year off with strong numbers. The number of sales was up 40% and the overall dollar volume was up 36%. On the flip side, the average and median sale prices were down 3% and 13% respectively. The drop in the median sale price, down 13% to $620,000, simply reflects the active price points in today’s market (condos/townhomes under $400,000 and single-family homes under $750,000). The Town of Jackson, and south to the Teton County line, experienced the most activity, which accounted for 53% of all sales in the valley.
Comparing properties under contract in Q1 2012 versus Q1 2013; the overall number of properties under contract is up 96%, the dollar volume is up 275%, the average list price is up 87%, and the median list price is up 79%. This across-the-board increase of properties under contract is another indication appreciation is coming. NOTE: Single-family homes and condo/townhouses make up 74% of the properties under contract, and 64% of the under contract are listed below $1 million. Also noteworthy; 83% of the properties under contract, for under $1 million, are in the Town of Jackson or the South Park area…
The overall inventory of active listings is down 13% and dollar volume is down 16%, when compared to Q1 2012. The median list price is up 6% to $1.195 million yet the average list price is down 4% to $2.6 million. The segment with the least amount of available inventory is single-family homes under $750,000. Currently there are only 20 homes in this price range on the market, yet by Q4 2012 96 homes had sold for under $750,000. Based on the 2012 absorption rates in this segment, there are less than three months of available inventory. By Q1 2013 we have already had 28 closings in this price range and another 18 are under contract. This segment is typically more active in the summertime, and the selection is sure to dwindle fast in the coming months. NOTE: The overall level of available inventory is at a five year low…
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