Data-Driven Report for the first nine months of 2015

To say the market is top heavy would be an understatement: The third quarter closed with zero single family homes listed under $500,000 (only the second time in Jackson Hole’s history). Meanwhile, sales at the top of the market have spiked this year with six homes sold for more than $10 million.

Entry-level options have all but disappeared: currently, the least expensive home on the market – a 584 sq. ft. log cabin built in 1982 on 2.24 acres in Red Top Meadows – is listed for $545,000. To purchase this home, most buyers will have to come up with a 20% down payment or $109,000, which carries a monthly mortgage payment of $2,209 (30-year term, 4.5% interest rate). While most locals can afford this monthly payment considering they are paying at least as much in rent, many cannot produce the required 20% down. Even though some lending options require less down, additional fees (like mortgage insurance) kick in immediately and spike initial interest rates, making it difficult for most candidates to qualify for the loan. What seems attainable at first quickly becomes out of reach.

Other ownership options under $500,000 follow the same trajectory; initial attraction fades with further examination. Of the 24 condo/townhome listings, less than half include a garage and most lack a backyard. Another setback: A rise in HOA fees. Many entry-level condo complexes were hit hard by the recession as HOA fees often go unpaid during foreclosure. The ensuing backlog of maintenance and capital improvements forced HOAs to raise monthly fees. While Teton County and the Town of Jackson are working hard to come up with better options to fund affordable housing, a free market single-family home for under $500,000 seems to be a thing of the past.

In contrast, the upper-end of our single-family home market is on fire this year with a 27% increase in homes sold for over $1 million, a 36% increase in homes sold for over $3 million, and whopping 200% increases in homes sold for over $5 million and over $10 million. NOTE: Of the six homes sold for more than $10 million, only two closed above $11 million. The source of the surge? The answer involves several factors, starting with the bullish market recovery. Investors have done extremely well in the last few years and are starting to reinvest in real estate – a secure place to park and enjoy earnings. Another factor relates to construction cost and availability; the recent trend of buying a vacant lot and building a custom home has come full circle. The cost and time required to construct a new home has forced many potential land buyers to reconsider the existing home inventory. Many general contractors are too busy to even bid a job, and if they do, the project will likely take 2+ years to break ground. The root of the problem is the vacuum of quality sub-contractors as many moved away or changed careers during the recession. Challenges to complete post-recession recovery remain at all levels of the market.

The Overall Market

When compared with the first nine months of 2014, the overall number of sales has increased by 11%. Following suit, the dollar volume jumped 40%, and the average and median sale prices rose by 27% and 26% respectively. Such strong pricing is the result of the 12% decrease in the number of sales under $1 million, and also points to a continued, across-the-board uptick in property values. NOTE: Once again, nearly half (47%) of all transactions were conducted in cash.

Overall properties under contract have increased by 12% when compared to this time last year. Meanwhile, the dollar volume and the average list price both dipped 29% and 15% respectively. In contrast, the median list price under contract remained on par with 2014. NOTE: Currently 51% of the properties under contract are listed for under $1 million and 11% are listed for under $500,000.

Overall inventory of active listings rose slightly – 2% – and the dollar volume is up 5%. Meanwhile, the average listing price has increased by 2% to $2,771,479, and the median listing price is level with 2014 at $1.3 million. The increase in inventory is most acutely felt in the $1+ million segment in contrast to the “locals market,” defined as under $1 million, where available home inventory continues to be scarce.

The upper end of the market – properties priced at $2 million and above – is experiencing a 66% upswing in sales. Closer inspection finds that 26 of the 121 high-end sales closed for more than $5 million – up 200% from last year – and six sold for more than $10 million. NOTE: While the number of $2+ million sales represented only 9% of the total transactions, this segment accounted for 61% of the overall dollar volume for the first nine months of 2015. To learn more about the luxury market, please visit www.JacksonHoleLuxuryReport.com.

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.

* While other local Real Estate Brokers attempt to report on the local real estate market, we are the only ones to track every single transaction. Therefore, if you want the most accurate information to help guide you through your next real estate transaction, please call Devon and David 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 2015 compared to sales in 2014.

* 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.

* In this report, “overall” refers to all sales in Teton County combined (homes, lots, condos, commercial, ranch), minus Alta, WY.

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

© Copyright 1995 – 2015 by David E. Viehman and Devon Viehman. 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.