Jackson Hole’s real-estate market has buckled under the weight of the economic downturn and new lending rules, a recent report says.

According to an e-mail report released by Jackson Hole Real Estate & Appraisal for the third quarter of 2008, most values are flat while sales and dollar volume are down 50 percent when compared with the first nine months of 2007.

Meanwhile, inventory has increased 61 percent and the median asking price has decreased 12 percent.

“With the financial and stock markets in turmoil, many property owners are looking to their Jackson Hole real-estate investment for some comfort,” wrote the report’s author, David Viehman, the brokerage’s owner. “Well, the news isn’t bad, but it could get worse before it gets better.”

According to the report, real-estate values are flat everywhere but Teton Pines and on commercial property in Jackson.

The median sales price increased 36 percent, though that is mainly because of the lack of sales below $1 million. Hot spots included condos in Teton Village and Teton Pines.

The biggest evidence of the slowdown is in the single-family-home market. The number of sales is down 49 percent for the year, and dollar volume is down 44 percent.

“Single-family homes under contract are a clear indication of our continued slowdown,” Viehman wrote.

The number of homes under contract is down 46 percent when compared with this time last year, while the median asking price is down 23 percent to $1.88 million.

Of 281 single-family homes currently for sale, 56 are being offered for less than $1 million.

“That’s a 500 percent increase over the third quarter of 2007, when only nine homes were listed for under $1 million,” Viehman wrote.

The least expensive home is a 1,360-square-foot house built in 1981 on a 0.21-acre lot in Rafter J for $595,000.

The market is a boon for people looking to buy property, Viehman wrote. With more inventory and lower interest rates, now is the “perfect time” to invest in income-producing properties, Viehman wrote.

“This news is bittersweet for first-time buyers, though,” he said in the report. “Many working-class buyers, whose rents have gone way up, can’t qualify for a first-time loan under the new lending guidelines.”

This scenario may not change soon, the report states.

Within the next three months, buyers can expect to see even more of a slowdown in sales activity.

“With the exception of a few savvy buyers, who feel we’ve already hit bottom and are out making offers, most don’t have the confidence or means to jump back into the market,” Viehman wrote.

To boost confidence back into the market, Viehman wrote that sellers need to lower prices, interest rates need to drop at least 2 percent and lenders need to loosen guidelines.

Buyers are “on the proverbial fence” and hoping to capitalize on lower prices, he wrote. Many of these buyers are also the local sellers.

“Sellers are not motivated to go below their 2007 values, so they in turn can’t or won’t buy their replacement property,” Viehman wrote.

According to the report, all properties listed this spring were listed between 10 percent and 20 percent more than the “all time high” from 2007. Yet, as summer progressed, sellers dropped prices or pulled property off the market.

Price reductions peaked in late August and have fallen to a trickle, Viehman wrote.

“This could mean we’ve hit bottom, as sellers seem unwilling to give away their 2007 equity,” Viehman wrote. “At the same time, we have an abundance of inventory. If sellers start feeling pinched from the economic downturn, they may buckle under the pressure and reduce their asking prices even further.”

In terms of lending guidelines, Viehman wrote that anyone looking for a loan in today’s market must have a credit score of 700 or higher, a 20 percent down payment and two to five years of tax returns with a consistent stated income high enough to qualify. Debt-to-income ratio also must be low.

“Until we see sellers dropping their prices lower than 2007 prices and/or lending guidelines loosening up, I predict that the market condition will remain stagnant,” he wrote.

Conditions mean that someone who can qualify for a loan should start shopping, the report states. An investor should look toward buying low-end condos because rental rates and demand are up, Viehman said.

Viehman wrote that sellers should determine what the last comparable sale price was and list for 5 percent to 10 percent less.

“Savvy buyers are out there, but they are looking for bargains,” he wrote. “Consider this: If you can mentally accept losing some equity when selling, you will probably make it up on your next purchase.”