As we close the books on 2021, the valley’s biggest real estate headlines for the year are clearly the record-breaking $2.97 billion in dollar volume and dearth of overall available inventory. The overall dollar volume that almost broke $3 billion represents a 21% increase from year-end 2020, and the overall available inventory hit another record low of 102 active listings (down 9%). The dollar volume acceleration that began in 2020 (up 83% from 2019) in the early months of the COVID-19 pandemic has continued through 2021 (up 21% from 2020). The combination of high demand, tight inventory, and the search for quality living in a small, Rocky Mountain community continues to push prices higher.
The dearth of available overall listings is at another record-breaking low—down 9% from the end of 2020. For the past 25 years, we have watched available inventory shrink from 1,596 listings at the end of 1996—the height of overall available inventory—to only 102 at the end of 2021. Of those, 528 were single-family homes compared to the mere 47 single-family homes currently on the market.
NOTE: At the beginning of 2021 there were no single-family homes listed for under $1 million. 2022 is starting off with zero single-family homes listed for under $2 million.
Why are we not seeing more inventory hitting the market? Except for a few high-end spec homes and a handful of new luxury condos in the Town of Jackson, we are not seeing any significant increases in new inventory. Even resale inventory has plummeted. With the exception of a few Sellers retiring, and some locals cashing in and moving over the hill or to Alpine, our resale inventory continues to nosedive.
Five factors contribute to this lack of inventory, the largest being the lack of local property owners trading up. It is estimated that up to 35% of all transactions in the last 30 years have been trade-ups. Historically, a first-time home buyer in Jackson would purchase a small condo. After a few years, enough equity was accrued to sell the condo and buy a small, single-family home with a backyard. After a few more years of built-up equity, the homeowners would trade up to a home with a few acres. Today, as prices have skyrocketed, it is almost impossible for a condo owner to trade up to the least expensive single-family home ($2 million)—putting the American dream of homeownership out of reach for many. However, four other factors are at play too: “Off-Market” sales, the current rental market, historically low-interest rates, and the lack of NEW, locally driven subdivisions. Tune in to our 2021 year-end podcast to get some more background and further discuss these factors. While no one knows exactly what the future has in store for Jackson Hole, we predict prices will continue to climb. Those hoping competition will slow in 2022 are out of luck. We believe in 2022 buyers can expect trends similar to the past two years: elevated prices, low inventory, and bidding wars on well-priced listings.
When buying real estate in the next year, it will be important to watch new listings (including ‘coming soon’ listings) and be prepared to not only visit the property quickly, but to decide and extend an offer almost immediately. That said, don’t overpay. Prices will be up, but that doesn’t mean you have to pay something outside of the current market. Make sure you have a local Realtor to help navigate you through the bidding process and provide as many recent comps as possible. Be sure to also make your offer contingent upon an appraisal. If it does not appraise at the agreed-to price you can renegotiate or back out.