New home construction was up in Jackson Hole during the first six months of the year, but property sales overall took a dip after several years of strong activity.
Despite the slowdown in sales, average prices continued their upward move, according to David Viehman, of Engel and Volkers.
Much of the recent sales activity was concentrated in April and May, said Katie Brady of Jackson Hole Real Estate Associates, the Christie’s affiliate in the area. In her report to clients, Brady said the fast start of the second quarter faltered in June compared with the previous year, due partly to a strong 2018.
In his Jackson Hole Report, Viehman said “new home builds” hit 107 in the first half of 2019, up from an average of 61 a year since 2011. That’s far short of the 1990 peak of 217 new homes built, but also a startling turnaround from the 2011 Great Recession low of only 34 new houses.
Though 2019 has seen a 78% rise in new home building, Viehman said it’s almost certainly not a sign that activity will return to historical highs. He said sharply higher costs will prevent that: He reported the average price for a single-family home in 1990 was $295,000 and the median was $172,000, compared with $2.7 million and $1.8 million today. Average land prices have risen from $150,000 for a lot to $1.8 million now, and labor and materials are averaging at least $400 a foot now compared with $110 in 1990.
At Prugh Real Estate, Greg Prugh mentioned some recent sales to illustrate price increases. Among them were Rafter J houses sold recently for $1.27 million and $1.3 million.
“We haven’t seen those numbers in Rafter J, ever,” Prugh said.
He also mentioned a Melody Ranch house advertised at $2.3 million and a Gill Addition house sold five years ago for $1.7 million that recently resold for $3.75 million. A house nearby is advertised at $5.4 million.
The higher prices at Melody — seen 25 years ago as a new place for Jackson’s middle class — were an eye-opener, said Matt Faupel, an owner at Jackson Hole Real Estate Associates.
“There’s been a couple of sales there in the $1.9 million range recently,” he said.
Faupel said Melody is an example of how housing thought to be destined for Jackson’s working people is now becoming unobtainable for that part of the market.
“The entry level of the market is really strong, which makes it hard for people to get in,” he said. At $2 million and higher, he said, the buyers “aren’t guys that are working, generally.”
Viehman put single-family home sales in the first half at 109, down 23%, but with the average price up 18% to $2.74 million. He put dollar volume at $298 million, down 10%.
Condo and townhouses took up some of the slack with 136 sales, a rise of 14% — though the average sale price was down 9%. Eighty-seven of the sales were in the town of Jackson; sales were brisk at The Virginian, where 21 of the remodeled apartments were bought, and at the new luxury condo development at the base of Snow King, One Town Hill, where there were 11 sales. Total dollar volume in condo sales was $133 million, up 4%, Viehman said.
After years of tightening inventory, available property took a jump near the end of the first half. Brady reported 246 new listings in just the second quarter, with more than 110 coming on the market in just May and June. She put the total value of new listings during the second quarter at more than $728 million.
Viehman put new listings in the first six months at 342, up 10%, and attributed a good part of that to long-held property hitting the block because of aging owners and rising taxes. Some residents, he said, saw assessments double in the past year.
“We’ve seen a lot of old inventory,” he said, “stuff that hasn’t been on the market in 30 years, coming up for sale, because the owners are retired and they said taxes are going up, and it’s time to sell.”
Prugh said the market is partly the traditional buyers who are selling and moving up and second-home buyers. Outside buyers, he said, are often “tax migrants” lured by the state’s low taxes and by people taking profits out of the hot stock market.
“There’s a lot of that money rolling around,” Prugh said.
He thinks there’s also increasing demand by investors from outside the area who are interested in the bottom line rather than a love of Jackson Hole.
“It’s become a global market” in recent years, Prugh said. “That’s a big change.”
Prugh said there are Jackson property sales now that are basically internet deals, sales in which the sellers and local real estate people never see the buyers, in some cases don’t even know who they are.
For the local sellers that’s of little importance, he said.
“It’s just a good time to sell, with prices where they are and little inventory,” he said.
Faupel said the first half’s slight dip in transactions — he called the six months “anemic” for many real estate people — almost certainly isn’t a trend, in spite of limited inventory.
“I don’t feel the market is going to end up going that way,” he said. “We don’t think it’s a trend.”