Real estate showing signs of recovery

Brokers report sharp uptick in sales, value over 2011; under-$500k market moving fast.
By Mark Huffman, Jackson Hole, Wyo.
January 30, 2013

Sales were up and inventory down in the Jackson Hole real estate market during 2012, and the lower price range was especially hot.

Many people who live and work in Jackson took advantage of the market and spurred big sales in the segment of the house and condo market with prices under $500,000.

Sales overall improved from 2011, encouraging brokers.

“There’s no question we’re going in a better direction,” said Tim Mayo of Brokers of Jackson Hole.

Andy Cornish of Rocky Mountain Appraisals said the market’s biggest troubles “came to a stop by about midway through 2011, and the improvement we saw continued to hold last year, which was good.

“It’s too early to say it’s a frothy, heating-up market,” Cornish said, “but people are interested in getting in at favorable interest rates.”

Broker David Viehman of Jackson Hole Real Estate Associates agreed that “things have been getting better, and I have a feeling that things are going to continue to get better” in the coming year.

In his Jackson Hole Report, now in its 18th year, he put the total number of sales in 2012 in Jackson Hole at 565, up 38 percent from 2011. Dollar value by Viehman’s calculation rose 50 percent to $881 million. Sixty-two percent of transactions were for less than $1 million, he said.

Mayo was especially encouraged by a drop in total listings, “which have certainly declined from during the dark days, when we had 1,000 listings, to now, where it’s under 700.

“It’s going to take a continuation,” he said, “but once we get to the point where sales equal listings, then we have really come up to par.”

Mayo, one of several Teton County brokers who compile, interpret and distribute real estate numbers, figured that by the end of last week the turnover rate in the market — the number of sales compared to the number of listings — was about 76 percent. At the height of the market, he said, before the Great Recession, inventory was turning over between two and three times a year, but during the depths of the crash turnover fell to 25 percent a year.

Viehman, who says his Jackson Hole Report includes every transaction, not just those on the Multiple Listing Service, figured that turnover had improved by year’s end to the point that overall inventory was down to 11 months. He said the average time from listing to sale for single-family homes is nine months, seven months for condos and townhouses. His method put the total listings at year’s end at only 498.

But for Viehman it was equally important that the lower end of the Jackson housing market was strong in 2012. He said that during 2012, houses for less than $500,000 and condos and townhouses for less than $300,000 — prices he called “an unobtainable dream” just five years ago — were moving fast.

People in Jackson’s middle class, though well-off by national standards, had often been priced out of the local housing market, Viehman said. But in 2012, a generally cheaper market and interest rates staying under 4 percent made it possible for them to buy.

“Buyers were coming out of the woodwork with the low interest rates,” he said, “and perhaps they were confident about their jobs. ... People were standing in line” to buy.

Inventory reduced

Viehman’s year-end report found that 47 buyers bought single-family houses for less than $500,000, and 50 found condos for less than $300,000 during 2012. But he said that surge won’t continue; inventory in the segment was seriously reduced by people taking advantage of good prices.

Viehman said that at the lower end, “inventory is depleting quickly” and that demand is likely to regain predominance over supply.

“If you look at what’s on the market for homes right now, probably 70 percent are at least 20 years old,” he said. “Something clean, priced right and that a family can comfortably move into, on that we’re getting bidding wars.”

Mayo’s breakdown of sales by location showed that single-family home sales were hot in Jackson, where he calculated sales up 45 percent, from 40 to 58, and dollar value up 55 percent, from $24.5 million to $38.2 million. Viehman’s calculation, using a different methodology than Mayo’s, showed Jackson sales up 62 percent, with 71 houses sold. He put the average price of those houses at $653,500.

Sales were also up in the area south of town to the Snake River Bridge, where Mayo tallied a 15 percent increase, from 38 to 44 sales, and a dollar value increase from $55.1 million to $62.8 million, up 13 percent. Viehman showed 51 sales in the area, with a value of $72.5 million.

Mayo showed that all single-family home sales rose from 650 to 692, up 6 percent, and a dollar value that rose 26 percent, from $392.9 million to $495.5 million.

Throughout the valley, Mayo tallied condo sales up 5 percent, from 109 to 115, and dollar value up 4 percent, from $52.6 million to $55 million.

Townhouse sales were up 31 percent, from 61 to 80, he said.

Most residential properties sold were at the lower end of the price scale. But sales were also up at the high end, the brokers agreed: The segment over $2 million rose 94 percent from 2011, and the $3 million-plus segment was up 52 percent in sales and 51 percent in dollar value, Viehman said.

Cornish called the high-end market “a bright spot through the whole downturn” and vital in maintaining overall prices during years when lower-end properties were seeing price cuts and foreclosures. The high end, he said, also is a steady part of the Jackson Hole economy after the end of construction.

“Once a property has been built, it’s no longer a boon to the construction industry,” he said. “But certainly for property managers, landscapers and maintenance, well, it’s good for those industries.”

All three brokers noted that sales of higher-priced houses seemed to be boosted by a growing trend of people moving from high-tax states to Wyoming, where there is no income tax and other taxes are low.

Out-of-state interest

“They’re coming from heavily taxed states, California and Connecticut,” Cornish said. “We’re definitely seeing some of that driving our higher-priced real estate.”

“In that upper end of the market, we’re starting to get a lot of interest from out-of-state people staring down the barrel of massive increases in taxes,” Mayo said.

If interest rates remain low, it’s likely the improvements seen in 2012 will continue, the brokers said.

“For the most part, I see the market holding steady, with slight increases,” Cornish said.

Viehman foresees recovering prices as inventory falls. That trend will be pushed along by tougher building rules and a decline in developable land, he said. People realize that “we’re not building anything else” to maintain the past rate of growth.



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