Number of Sales Moderate as Prices in Inventory Remains Tight and
Prices Edge Higher – Number of Sales in the Upper Reaches of Market
Showed Some Pause in the Election Year
The 2016 Teton County Real Estate Market, as indicated by the data from January through November, saw a slight decrease in the number of sales (30 less sales or 5.15% decrease). For improved properties, this reporting is a composite of more moderately-priced properties showing level-to increasing sales volume trends, while higher-end attached homes (condominium / townhouse) contracted from 2015 numbers. High-end single-family homes did increase by about 7 sales as of the end of November, but these sales had far fewer $5MM + sales, which caused a dip in the average transaction price. This pattern of sales volume can reasonably be attributed to an election year, the uncertainty of which would logically affect sales of upper-end vacation / summer homes more than more moderately-priced homes that would appeal to local market participants as a primary residence. The volume of vacant land sales showed contraction in sales volume equally between the upper end “Resort Market” and the more moderately-priced “local market.” This decrease in sales volume for the Local Market is likely more related to a lack of available inventory than election year influences. Prices in Teton County continued to show appreciation. This can be attributed to the fact that sales volume for Teton County is at or near historic low levels, which still creates the dynamic of an under-supplied market, even in the face of a modest contraction of sales inventory. Gauging appreciation through the analysis of sales and resales that occurred between 2014 and 2016, rates of appreciation well over 20% annually can be noted. However, these are primarily rates extracted from entrepreneurial successes that capitalized on a real estate market that can often be inefficient. When viewing sales data that is unaffected by such influences, growth rates for upper end resort properties in the 3% to 5% per year range are supported, with annual rates of appreciation having been more in the 6%-10% range during this period. These rates represent a moderation of appreciation from the very robust rates of appreciation that were commonplace immediately after the market inflection in mid-2011. However, it is logical (and healthy) that pricing growth moderates when considering the sustainability and long-term trajectory of the market.
Single-Family Home Sales Trends Through November 2016
The single-family home market showed growth in the number of sales, with the local market’s growth in volume (10.26%) outpacing the resort market (5.98%). As previously noted in this report, prices have continued to experience upward pressure (as noted by the comparison of sales and resales of the same or similar properties). This trend is somewhat reflected for the local market by the above-tabulated averaged data. However, the aggregated data shows a marked decrease in the average price of the resort-market sales resulted due to the changing composition of sales in this market segment during 2016. More specifically, it was noted that 2015 reported 13 sales above $7MM, which totaled over $137MM of sales. By comparison there were only 3 sales above $7MM in 2016 which accounted for nearly $31MM worth of sales. When noting that the drop off in “luxury home” sales happened concurrently with continued price appreciation and volume increases in the more moderately-priced segments of the market, the likelihood of election year jitters playing more of a part in the psyche of high-end buyers is a reasonable conclusion.
Vacant Land Sales Trends Through November 2016
Vacant land sales decreased in number for both the Local and Resort Market with the decrease in volume being similar in magnitude for both market segments. While the averaged data showed appreciation for the local market that approximated that shown by the examination of individual sales and resales data, the higher-end resort market showed a counter-intuitive contraction in average transaction price. Similar to the markets for improved properties, this is observed to be the function of the changing composition of inventory. The development surrounding Shooting Star Golf Course at the base of Teton Village was a significant contributor to high-end sales volume in 2016, with 16 sales being noted. However, even this brisk sales volume was a decrease from the 24 sales that occurred by the end of November in 2015. Lack of inventory continued to impact sales volume in the more moderately–priced Local Market. At the time of writing this report, the Teton County MLS reported 14 lots available for purchase for prices equal or less than $500,000, with approximately half of these listings being located in the more remote locales of the county.
Attached Home Sales Trends Through November 2016
The number of attached home sales was off by 15 sales when comparing volume to what had occurred by the end of November in 2015. Similar to detached homes, attached homes continued to show appreciation when examined individually (and when the data is aggregated for moderately-priced properties), but the higher-end of the market showed a decrease in volume of top tier properties. By example, the highest 10 sales in 2015 had an average sale price of over $3.9MM, while the top 10 sales price in 2016 (through November YTD) only averaged around $3.2MM. Reiterating the point, this is not indicative of declining prices, just a slower pace of property acquisition in the higher-end segments for 2016, which allowed for the lower end of the market to skew averages down.
The preceding table arrays an end-of-November snapshot of inventory levels for the past 10 years. Inventory levels continue to remain low and are frequently cited by agents as a stagnating factor for volume levels. As of November of 2016, the inventory of homes, attached homes, and vacant land listed for sale was showing to be nearly 12% lower than this time last year, and hovering near pre-recession levels of 2007. This is a testament to both the resiliency of the Teton County Market and the finite amount of privately-owned land which exists for development.
Andrew Cornish – Broker
PO Box 9467 | 155 E. Pearl,
Jackson, WY 83002
Data provided by Rocky Mountain Appraisals, Teton County’s leading valuation firm: www.rmappraisals.com