When viewing data through the beginning of September 2021 (a composite of single-family homes, attached homes, and single-family homesites), the Teton County Real Estate Market is observed to be continuing its upward trending in price. Low inventory continues to be a driving force behind appreciation trends, with the available inventory east of Tetons the being over 28% less than it was at this time last year. As evidence of this price growth, the below table arrays sales and resales of properties in the Teton County Market Area:
As is noted in the above table, the range in appreciation rates shown by observed sales and resales is varying, with rates noted to have ranged in the full sample (not shown here in its entirety) from .04% to 10.57% per month, with a median rate of 2.5% per month (average, not compound). There is some anecdotal evidence of the appreciation curve flattening, which would be logical considering the intuition that double-digit appreciation will not continue forever. That said, there is also a reporting of appreciation comparisons from this sample that indicates that strong upward price pressure still exists.
Market in General – Single-Family, Attached Home, and Vacant Homesites
When addressing the number of total sales in all categories (SFR, Attached, and Homesites), volume increased by over 15%, with the average price increasing at just over 10% when compared to this time last year. It is notable that the increase in average price when viewed as a composite of all markets is relatively modest in comparison to the appreciation rate noted previously in this report. This is largely opined to be a result of the changing composition of sales, which prevents this measure from being a true measure of market appreciation. This was particularly true in the higher-end resort market, where composite averages show a drop for some property types, whereas sales and resale comparisons show no such contraction in pricing. Offsetting the impact of the high-end market’s changing composition during the year-to-date period has been the explosion of the Local Market, with this categorization being properties that historically have been targeted for purchase by market participants whose economic resources were dependent on income earned locally. In the yearend report for 2020, it was noted that the premise of a Local Market was being called into question, with the argument existing that the increasing prevalence of remote working makes almost every home a target for purchase by someone whose economic resources are not tied to the local economy. This observation was confirmed as reality in the first nine months of 2021 as precedent-setting prices were noted in such neighborhoods as Cottonwood Park, Rafter J Ranch, and East Jackson (which was already well on its way to being a second-home target area in 2020). The result of this phenomenon was an increase in average price of single-family homes in the Local Market of over 60%, with this increase being both a function of appreciation and a growing prevalence of higher-end homes in markets such as East Jackson.
Single-Family Home Sales Trends
While the total number of single-family homes stayed relatively constant (presumably due to a lack of inventory), average pricing increased by nearly 30%. This growth was led by that of the Local Market. However, as previously alluded to, this growth is likely as much due to the changing character of neighborhoods like East Jackson, which are calling for such areas to be reclassified into the Resort/Second Home market segment. As an example, 2021 year-to-date saw nine sales topping the $4M mark (a figure handily out of the resources of most local purchasers), while only one such sale was seen the previous year. The Resort market continued to climb as well, with four sales over $20M through mid-September (while only one such sale was recorded the previous year).
Attached Home Sales Trends
The attached home market (condominium / townhouse) showed a marked increase in the number of sales. Overall average pricing was down for attached homes. However, this is practically not correct and due to a change in the composition of sales due to available inventory. As an example, in the previous year-to-date period, five sales of attached homes occurred in the Shooting Star development (driving average prices upward), while no such properties were available as inventory in this year-to-date period.
Vacant Land Sales Trends
Focusing on single-family homesites (and not ranches), vacant land sales increased by over 25% in 2021 YTD. The average price of homesites showed an overall decrease. However, this was due to the combined effect of a lack of sale price reporting for as much as 40% of the higher-end sales and the lack of inventory (and therefore lack of sales) in the Vogel Hill and Shooting Star developments. The real story of growth is noted in the Local Market where the average sales price of lots jumped over 80%. This again speaks to the need to reclassify many neighborhoods from the Local to the Resort market as neighborhoods such as East Jackson have clearly become the target of monied second-home owners.
Inventory At a Glance
Low inventory has been a key component to price appreciation over the past two years in particular. This trend appears to be continuing within all tracked market segments, with only one exception showing a decrease in inventory levels (single-family homes in Jackson and South of Town). The result was a decrease in inventory of over 28% when comparing September last year to September this year. Inventory is noted to have increased from February when active listings in Teton County east of the Tetons were counted at 88. However, this is likely due to seasonal variations rather than an increasing inventory trend. A reasonable hypothesis to explain the increase in inventory in single-family homes in the Town/South of Town market area is that sellers are being enticed to explore sales at the higher price points that are now being enjoyed in these areas. It is noted that the average list price for single-family homes in these locations is currently over $3,675,000.
The Teton County Real Estate Market, when addressing the primary component of real estate east of the Teton Range, continues to show the effects of upward price pressure driven by a limited inventory. Price points in areas once considered neighborhoods for participants in the local economy have reached levels that calls into the classification of these homes as being locally oriented. At the same time, the upper echelons of the Teton County Real Estate Market continues to set new high-water marks and make previously-thought of high-water marks become more common place.
Written by Andrew Cornish
Cornish | Lamppa Realty Group
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