2017 marks the fourth year of dwindling sales in our valley. When compared to 2013, the overall numbers of sales are down 13%, home sales are down 27%, and single-family lot sales are down 15%. The only segment of the market where number of sales has not fallen is condos/townhomes, where the number of sales has hovered at the same level for five years running.
For the past few years, we have pointed to dwindling available and affordable inventory as the reason for the slow down. This year, we see a slight increase in affordable inventory, yet the number of sales continues to fall. What’s going on?
First, let’s take a look at the different segments of our market: While the condo/townhome median sale price increased 40% since 2013, inventory in this segment continues to replenish itself. On the flip side, while the single-family home median sale price increased 47% since 2013, the number of overall home sales is down 27%. This drop in the number of home sales can be directly attributed to the drop in home sales under $1 million (down 57%). The number of single-family lot sales since 2013 is also down, having dropped 15%, yet the median sale price is up 18%. While it appears single-family land sales are faring better than homes, please keep in mind we are down 54% in the number of land sales when compared to 2007, or the height of our market.
WHY THE SLOW DOWN IN NUMBER OF SALES?
Two factors are playing a big part—the age of available single-family homes, and the cost of new construction and remodeling. Looking at current home inventory under $1 million, 69% of the homes are 30+ years old, with most in need of major remodeling. During the Great Recession many locals saved their money and were able to purchase a home with 20% down and still had money to upgrade or remodel before the family moved in. Today, with the average sale price of a single-family home being $1.86 million (or 24% higher than 2013), locals can no longer afford the 20% down and have money left over to remodel. While remodeling cost is hard to gauge, new construction prices are being quoted from $400 per sq. ft. to more than $1,000 per sq. ft. Combine the new construction cost with the median sale price of single-family vacant lot in 2017 ($795,000) and a newly built 2,000 sq. ft. modest home will cost you $1,595,000. This price range is impossible for most local buyers.
Is the slowdown affecting property values? Based on the ever-increasing median sales prices, it does not appear so. Since 2013, the median sale price of a single-family home is up 47%, the condo/townhome median sale price is up 40% and the single-family vacant land median sale price is up 18%.
Another indication of increasing home values; Q-3 2017 marks the first time in the history of Jackson Hole real estate where we tracked more homes sold in the $1 to $2 million price range (68) than homes in the under $1 million price range (61).
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*While other local Real Estate Brokerages attempt to report on the local real estate market, we are the only Realtors who 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 2017 compared to sales in 2016. *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).
*Alta, Wyoming is not included in this report. *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.