Click here for the 10 year overall graph

Welcome to the 15th Anniversary of The Hole Report. Published semi-annually, this data-driven report is the most accurate and trusted real estate news source in Teton County, Wyoming. First, we would like to thank all our loyal readers (customers and clients) for their continued trust in this report. Our ability to track every single real estate transaction, and then turn the data into historical knowledge, has made us the most sought after real estate experts in Jackson Hole. We have taken this historic opportunity to not only revamp the look of our semi-annual newsletter but to also introduce two new segments to the report; commercial real estate and foreclosure/distressed properties.

THE MARKET HAS HIT BOTTOM: What exactly does this mean? For starters, a bottom does not mean that prices are about to return to the heady days of 2007. It just means that the trend is no longer getting worse, which is the critical factor. Overall, it can be opined that the Jackson Hole market has reached a bottom and is experiencing a stabilization of prices. The following statistics are signaling the bottom: 1.) Three quarters of increasing number of sales, 2.) Two quarters of decreasing inventory (down 34% since June 2009), and 3.) Three quarters of increased properties under contract at the end of each quarter. Click here for the overall market review by quarter

How long will we sit at the bottom? This is difficult to predict, as the bottom is very soggy right now. While recent distressed properties (foreclosures, short sales and REO’s) have surfaced in 2009, they only accounted for 6% of the sales in 2009. Many foreclosures were not resolved at auction and their respective lenders took over the property. These properties (30+) will be returning to the market after the standard 90-day redemption period. Based on REO’s sold in 2009, these properties will hit the market at well below current values, removing them from lenders’ books quickly. The other factor coming into play is the overpriced listings currently on the market. Unfortunately, many of today’s Sellers refuse to lower their prices. It is estimated that 40% to 50% of the current inventory is overpriced. This stubbornness, unless reversed, will surely keep Buyers from engaging in offers. With few exceptions, one thing is for sure; no property in Jackson Hole today is worth what it was in 2007.

Advice to Sellers: Postpone selling if you can. Wait, if you’re able, until you see clear, modest upward trends. Then move…and don’t be greedy. If you must sell right now, ask your Realtor what they think your property is worth under a cold, hard light, but be prepared to move down as fast as you have to in order to remain competitive. Sell “as is.” Be transparent about your need to sell and don’t send mixed signals. You’ll find out the current market value of your property quickly.

Advice to Buyers: Figure out what a particular property is worth to you right now considering your top parameters and goals. Forget about timing the market and buying at the bottom, as there are exceptions to all trends. Come up with an offer that makes sense to you, regardless of asking price, comparables, appraisals, competitive market analyses and the unsolicited advice of your overly opinionated brother in-law in Florida.

Bottoming out will require adjusting the expectations of have-to-sell-now sellers in this real estate market. This will surely bring more pain. It's also vital to reset expectations of appreciation. Yes, appreciation will return. No, we will not see double-digit annual appreciation like we did during the last several years. If you would like to know your property’s value in today’s market go to the contact page and send your request.

It’s the bottoming of expectations, one Seller at a time, which will bring us out of the current market.

*NEW - COMMERCIAL REAL ESTATE SEGMENT: Over the past 15 years we have only touched on the commercial side of our real estate market in this newsletter. With the addition of our newest commercial Broker (Michael Pruett) and the input from our commercial appraisers and other Brokers we will now be able to report confidently on every segment of our local market. As we look to the future and the expansion of our commercial real estate efforts, there was no other agent in the valley that offered the successful track record and business acumen that Michael Pruett brings to JHRE Associates. He will be a valued addition to the company and it is a pleasure to have him on board.

*NEW - DISTRESSED REAL ESTATE (FORECLOSURES, SHORT SALES & REO): Everyone has heard these buzzwords and the majority of Buyers want to focus solely on these types of properties. As part of our continued efforts to stay on top of market trends, we have started offering weekly email updates of all upcoming foreclosures. We are also tracking short sales and bank owned properties. If you would like to sign up for weekly update go to the contact page and send your request.

What is distressed real estate? It is a property that has to be sold in order to pay arrears on a mortgage. There are three types of distressed real estate: foreclosures, short sales and REO’s.

What is foreclosure? Foreclosure is a legal proceeding to terminate a borrower’s interest in real property, instituted by the lender, to either gain title to the property or force a sale in order to satisfy the unpaid debt secured by the property.

What is a short sale? A short sale is when the proceeds from the sale of real estate fall “short” of the balance on the loan. The lender agrees to accept less than the amount due on the loan due to financial hardship on the part of the borrower. Generally, lenders won’t discuss short sale requests unless the borrower is already far behind on mortgage payments.

What is a REO? The property is owned by a lender, most often a bank, and after a failed attempt at selling the property at an auction, it is returned back to the bank. After the 90-day redemption period in Wyoming the bank will most likely place it on the open market, normally below market value to get it off their books quickly.

NOTE: If you are out looking for these distressed properties you should consider the following; in 2009 only 6% of the overall sales were distressed. Of the 539 currently available listings only 4.8% are considered distressed. Buyers need to also understand a distressed sale requires lots of patience, as the average time spent to close is between 90-120 days. Don’t let the allure of a distressed property blind you from the other opportunities. The current number of motivated Sellers is historic, as are the low interest rates. While distressed sales usually generate lots of interest and offers, the non-distressed properties are getting little attention yet many Sellers are ready to negotiate.

CRUNCHING THE NUMBERS FOR 2009: The overall market (all home, lot, condo and commercial transactions or listings) mirrored last year’s largest decrease in number of sales (down by 47%) which was the largest in recent history. However, looking at the last three quarters it appears we have bottomed out on the overall number of sales. Overall dollar volume was down 54% for the second year in a row (totaling $333 million), and the average sale price was down 13%. The upper-end market (over $2 million) also mirrored last years largest decrease in number of sales over $2 million, down 56%. Of the 44 sales, 19 came in between $2 to $3 million, with 25 over $3 million and 10 selling for over $5 million.

OVERALL REAL ESTATE CURRENTLY UNDER CONTRACT is showing positive signs. The number of properties currently under contract is up 51% when compared to the end of 2008. The dollar volume, average list prices and median list prices under contract are down though, 8%, 57% and 53%, respectively, when compared to year’s end 2008. The decreases in the average and median prices reflect a shift in what price points are selling. Out of the 55 properties currently under contract, more than half are listed for under $2 million. NOTE: As of January 1st there were no single family vacant land listings under contract.

CURRENT OVERALL AVAILABLE INVENTORY has only increased 4% when compared to the end of 2008, but has dropped 34% since June 2009 to 550 overall listings. Note: This drop did not necessarily come from sales in 2009, instead from frustrated Sellers who took their property off the market because they refuse to sell at today’s market values. Don’t expect those frustrated Sellers to re-enter the market anytime soon, as it will take time before we return to peak values of 2007. Meanwhile, the overall average listing price was almost unchanged when compared to 2008, down 1% to $2.66 million. The dollar volume of available properties, as of January 1st, was up 3% to $1.463 billion when compared to this same time period in 2008.

Jackson Hole Real Estate Associates LLC is the largest locally owned and operated Real Estate Company in the region. Our team is comprised of 60+ agents, appraisers and support staff, as well as a powerful database that leverages information for our clients who like to keep track of every single real estate transaction in Jackson Hole on a daily basis. Combine all this with the worldwide reach of Christie's Great Estates, the simple fact remains: “We Know the Market Better than Anyone”.

It is becoming very clear that Buyers and sellers demand to stay informed of market conditions. We offer several services that will keep your finger on the pulse of our local real estate market, from daily email updates, a free market analysis of your property, to quarterly price updates on your Jackson Hole property. We have recently added a weekly foreclosure update that you can also subscribe to via email. Please contact us to learn more about the programs and services we can provide.

Today the Christie's Great Estates global network of affiliated brokers includes nearly 36,000 sales associates operating from 900 offices in more than 40 countries. The network's combined annual sales topped $128 billion. The combined global networks of Christie's and Christie's Great Estates, both market leaders in the sale of luxury goods, create a world-class showcase for distinguished real estate. No other network offers this level of international visibility to proven Buyers of high-value property.

Whether you are pricing your property to sell in this competitive market, or deciding when the right time to buy is; rest assured that when you are our client, you will have current market statistics, an impeccable level of service and personal attention that will give you the upper hand. For a free comparative market analysis please go to the contact page and send your request.

The Hole Report is published semi-annually, with additional email updates for the first and third quarters. While others attempt to report on our market with MLS statistics only (MLS historically tracks 65-70% of the market) we track every single transaction in Teton County. This data-driven report is the most accurate and trusted real estate news source in Teton County, Wyoming. If you would like to sign up for these quarterly email updates, or need more detailed information about our market, feel free to either call 307-734-9941 or go to the contact page and send your request. You can also find “The Hole Report” on Facebook.

We hope this report has given you a snapshot of market trends and, as always, we would be glad to discuss them further with you. If you plan to list your property this spring, would like a more detailed analysis of specific areas, back issues of THE HOLE REPORT, or a professional Realtor to represent you in your next real estate transaction, please call or email one of the numbers below or write to P.O. Box 4897, Jackson, WY 83001, Attn: David and Devon Viehman.

Sincerely,

David E. Viehman, Owner/Broker, Editor
Devon Viehman-Wheeldon, Owner/Sales Associate, Co-Editor
Jackson Hole Real Estate Associates LLC
davidviehman@jhreassociates.com
www.jacksonholereport.com
Direct: 307-734-9941
Toll-free: 888-733-6060 ext. 9941

*While other local Real Estate Brokerages attempt to report on the local real estate market, Jackson Hole Real Estate Associates LLC is the only company to track every single transaction. Therefore, if you want the most accurate information to help guide you through your next real estate transaction, call us today. “We are the Experts”.

*All statistics are supplied by sources that have been deemed reliable but are not guaranteed.

*All statistics quoted in this newsletter are based on sales in 2008 compared to sales in 2009.

*Median sale price is the cost of a property that has an equal number of sales above and below it on the price scale.

*Average sale price is the total combined dollar volume divided by the number of sales.

*The word “Overall” in this newsletter refers to all sales in Teton County combined (homes, lots, condos, commercial and ranch).

*The term “Market Value” means; the value of a property in terms of what it can be sold for on the open market; current value.

© Copyright 1995 - 2010 by David E. Viehman and Devon Viehman-Wheeldon dba Jackson Hole Real Estate Associates LLC. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without explicitly written permission from David E. Viehman or Devon Viehman-Wheeldon.

This site will be updated again on January 30, 2011

DATA-DRIVEN REPORT FOR THE FIRST SIX MONTHS OF 2010

Market still has Soggy Bottom: We called the bottom of the Jackson Hole market back in January.  While this is still accurate, as the number of sales has more than doubled when compared to the first six months of 2009, several segments of our market still struggle to find the bottom, in terms of price.  Hardest hit are the entry level, local buyers and the resort condo/townhomes (short-term rentals).  In both of these segments, we are seeing values drop as much as 50%, when compared to the all-time high of 2007.  The reasons why these two segments have been hit hard at the same time are two-fold: 1.) the lending guidelines have changed, and 2.) the percentage of distressed properties in these segments are high.  The new lending guidelines are generating only a few Buyers to absorb the record high inventory levels in these segments.  Combine this lack of Buyers with the unprecedented number of sellers who must sell and you have the classic example of supply & demand.

First-time buyers are out there.  In fact the demand for rental homes and condos has skyrocketed since the new lending guidelines were put in place.  If you are a first-time buyer, and you haven’t visited a local mortgage banker lately, then it’s time.  While the federal regulations are still stringent, local mortgage bankers have some great plans to offer, including low down payments and even lower interest rates.  When you consider how much real estate has dropped in value in the last 36 months, then factor in today’s historically low interest rate, you would be amazed how much buying power you have at hand.  Example: A three-bedroom two-bath home in the Town of Jackson sold in 2008 for $798,000.  Today this same home is on the market for $499,000.  When this property sold in 2008 interest rates hovered around 6.5%.  Today’s interest rates for a conforming loan ($417,000 or less) are as low as 4.25%.  If you apply the same down payment of 20% and amortize the loan over 30 years, the monthly payment difference from 2008 to today is over 51% ($4,035 vs. $1,964).  This is substantial, as most three-bedroom two-bath homes rent for $2,000 to $3,000 per month.  Then consider the fact that there are currently 13 homes and 108 condo/townhomes currently on the market for under $500,000.

So, what are you waiting for?  If you can’t afford the 20% down payment, local mortgage bankers have loan packages that only require a 5% down payment.  Also consider asking your parents to help out with the down payment, or make them a partner in the investment.  You can also form a partnership with one or more friends.  The bottom line is: do whatever is needed to take advantage of this “perfect buyers’ market”.  For a list of homes and condos under $500,000 contact Devon or David at (307) 734-9941 or email davidviehman@jhreassociates.com.

The overall market is showing signs of a recovery, yet we are far from a turnaround.  Number of sales is up 113% and dollar volume is up 84% when compared to July 1, 2009.   Just looking back three years though to 2007, the number of sales is down 67% when compared to 2010.  The hardest hit by this downturn is the under $1 million segment (local’s market) and resort condos where the mortgage crisis and national recession continue to be felt.  The upper end market is also seeing somewhat of a recovery, especially in the $3+ million segment where the number of sales is up 145% when compared to July 1, 2009.

Overall available inventory reaches $2 billion:  This is the first time in Jackson Hole real estate history the dollar volume of inventory reached $2 billion.  When comparing inventory levels to July 1, 2009, the overall inventory is only up 2%.  Looking back just three years to 2007, the overall inventory is up 130% (371 vs. 842) when compared to 2010.  This dramatic increase in inventory continues to be directly associated to the national recession and is helping to fuel the “perfect buyers’ market”.  The largest increase in inventory is the $5+ million-price range, up 15%.  NOTE: According to the National Association of Realtors (NAR) the average amount of available inventory nationwide is 9.7% versus 7% of the total inventory in Jackson Hole, as of July 1, 2010. NOTE: The dollar volume of available inventory reached $1 billion in 2001.

Overall properties under contract is showing no signs of a market turnaround.  The number of properties under contract and the dollar volume under contract are both down 24% when compared to July 1, 2009.  The upper end market is also experiencing a downturn.  The $1 to $3-million range has 41% fewer properties under contract when compared to July 1, 2009.   The only segment in the upper end that experienced an increase in the number of properties under contract was the $3 to $5 million range (up 17%).  NOTE: Historically, we see more upper end sales activity between August and October.

Distressed Properties update (short sales, foreclosures and bank-owned):While the number of foreclosures is shrinking, the number of bank owned properties is increasing.  Even with the decrease in foreclosures, distressed properties are truly affecting our market values in most segments.  While some segments of our market are seeing values down 20% to 30% (mostly second-home type properties) others like low end condos and short-term rental condo values are down as much as 50% from the all-time high of 2007.  Looking at the overall number of sales in the first six months, only 13% (20 sales) were considered distressed.  Compare that number to what is currently on the market (842 listings) only 6%, or 47 listings, are considered distressed.  Why then are we seeing such an impact from distressed properties in some segments?  The biggest factor is the lack of buyers.  This void is directly linked to federal lending guidelines. First-time homebuyers are having a hard time either scraping together a down payment, scoring a high enough credit score, or their debt-to-income ratio is too high.  Short-term rental buyers (short-term rentals are considered investment property) must come up with more cash at closing than in the past, and the interest rates are not very favorable for investment type properties, such as Aspens and Teton Village condos.  NOTE: Do not expect the market to fully recover until the market can absorb all the distressed properties.

If you are out looking for bargains, don’t let the allure of a distressed property blind you from the other opportunities, as 80% of our current non-distressed properties are priced right.  The current number of motivated sellers is historic, as are the low interest rates.  While distressed sales might generate lots of interest and offers, some of the non-distressed properties are the best bargains in today’s market.  So, remember: motivated sellers include owners with many years of equity building in their property. These sellers may not be in financial trouble, but some are ready to sell for a substantial discount.

Foreclosure investing: Buying foreclosed properties is not for the novice or faint of heart.  Also, it can be risky.  The gambles involved include defective or vandalized properties, liens or other title problems, evicting the former owners, and the requirement to buy “as is” with no opportunity for negotiating on repairs and no warranties from the prior owner at auction.   Also keep in mind the highest bidder must pay the full amount of the bid to the sheriff’s office by 5:00 pm the day of the sale (auction).  This process usually precludes being able to finance, as the lender will not be able to use the foreclosed property as collateral until after the redemption period, which can be 4-6 months from the auction day.  On the other hand, the upside can be significant.  If you are considering a foreclosure property, be realistic about the challenges and amount of work involved.  If you minimize your risk by working with an experienced Realtor, attorney and title company, you’ll increase your chances of success with foreclosure properties.  To sign up for our weekly distressed properties list call 307-734-9941 or email: davidviehman@jhreassociates.com

Cash is still King: As mentioned last fall, federal lending guidelines are still tight.  When taking a close look at all sales transactions in the first half of 2010, we found 58% of all buyers are still paying cash.  Why so many cash buyers?  Savvy buyers knew their hard-earned cash could guarantee a seller a closing without relying on the banks to loan them money.  What savvy seller wouldn’t take a good, long look at an offer that does not include the wild card financing contingency?  After all, cash permits closing escrow quickly and easily, while purchase offers contingent upon financing require 45+ days with several potential snags along the way.  So naturally, sellers like cash offers.  Cash buyers also realize their money is not making much of a return just sitting in the bank.  For short sale properties, a cash offer that hits the target price will usually trump a higher-priced offer with a loan. The ability to close has become just as, if not more, important to banks as price.  Another interesting fact is the price segment of these cash transaction buyers; Out of the 87 cash transactions, 45 were under $1 million (52%). 

Looking Ahead: We are predicting a slow recovery to continue through 2011.  Expect to see the upper-end of our market lead the way.  The recovery of this segment will trickle down to the locals’ market, spurring job growth in construction and second homeowner services.  This in turn will build confidence in the entry-level locals’ market.

Based on the number of active listings, we also predict that only 25% of the current listings will sell by the end of 2010.  If you want to be part of the fortunate ones who do sell in 2010, be sure to price your property to compete.  The #1 desire of all buyers in today's market is to find a great value.  So, talk to your Realtor about an effective pricing strategy for your property.  NOTE: We are currently seeing up to 30% of all sales, whether broker driven or not, that are not being reported to the local MLS.  This is due to many sale prices coming in below the current market values.  Sellers and buyers alike do not want anyone to know these prices.  For this reason, and so many others, if you are buying or selling real estate in Jackson Hole you owe it to yourself to start with Jackson Hole Real Estate Associates, as we are the only brokerage to track every single transaction.  

From the Appraisal Department: The local market continues to be in flux.  And, from an appraisers point of view, the market(s) continues to be flat at best.  Appraisers continue to be challenged by the current market.  With the lack of new data appraisers are relying on other methodologies.

With the increasing amount of short sales and foreclosures in the area appraisers are often asked what these sales do to the overall market and sub markets?  Well the simple answer is “it depends.”  If you live in a neighborhood where one or two of these type properties have sold there may be no effect on your property’s value.  But, if the majority of the properties in the neighborhood are being sold through a short sale or foreclosure process then there is a good chance that these sales are setting the market.

Appraisers are finding more owner financing going on in the market today.  And, appraisers must also determine if these conditions are having an effect on the market value of properties. 

Many of our clients are also asking what the expected marketing time of a property might be.  Marketing time is “the time it takes an interest in real property to sell on the market subsequent to the date of the appraisal.”  Typically most appraisals deal with exposure time which is “the estimated length of time the property interest being apprised would have been offered on the market to the hypothetical consummation of a sale, at market value on the effective date of the appraisal.”

In the end none of this is new for appraisers.  When the market is expanding appraisers must struggle with market complexities, as the appraisers are doing with the declining market features. 

Our staff has over 25 years of combined real-estate appraisal experience and are able to handle any job, no matter what the different complexities of the market are.

Tom Ogle, General Certified Appraiser
Jackson Hole Real Estate Associates LLC
307-739-1104 – tomogle@jhreassociates.com

Jackson Hole’s Newest Website: With the launch of www.JacksonHoleResortProperties.com you can now search for every single available (listed) property in the region.  Not only do you have access to all these listings but you will also be able to see all photos, map each property through Google Maps and sign up for daily email updates.  The website contains helpful hints for both Buyers and Sellers and has links to hundreds of real estate related businesses in the region.  Go to www.JacksonHoleResortProperties.com and tell us what you think.

Jackson Hole Real Estate Associates LLC is the largest locally owned and operated Real Estate Company in the region.  Our team is comprised of 70+ agents, appraisers and support staff, as well as, a powerful database that leverages information for our clients, daily tracking of every single real estate transaction in Jackson Hole. Combine all this with the worldwide reach of Christie's Great Estates, the simple fact remains: We Know the Market Better than Anyone.

It is very clear that buyers and sellers demand to stay informed of market conditions. We offer several services that will keep your finger on the pulse of our local real estate market, from daily email updates, weekly distressed properties list, a free market analysis of your property, to quarterly price updates on your Jackson Hole property.  Please contact us to learn more about the programs and services we can provide.   Be sure and also check out our new website www.jacksonholeresortproperties.com for the latest listings and news about our local market.

Today the Christie's Great Estates global network of affiliated brokers includes nearly 36,000 sales associates operating from 900 offices in more than 40 countries. The network's combined annual sales topped $128 billion. The combined global networks of Christie's, and Christie's Great Estates, both market leaders in the sale of luxury goods, create a world-class showcase for distinguished real estate. No other network offers this level of international visibility to proven buyers of high-value property.

The Hole Report is published semi-annually, with additional email updates for the first and third quarters.  While others attempt to report on our market with MLS statistics only (MLS historically tracks 65-70% of the market) we track every single transaction in Teton County.  This data-driven report is the most accurate and trusted real estate news source in Teton County, Wyoming.  If you would like to sign up for these quarterly email updates, or need more detailed information about our market, feel free to either call or email us at one of the numbers below.  You can also find “The Hole Report” online at www.jacksonholereport.com

Whether you are pricing your property to sell in this competitive market, or deciding when the right time to buy is; rest assured that when you are our client, you will have current market statistics, an impeccable level of service and personal attention that will give you the upper hand.  For a free comparative market analysis please email davidviehman@jhreassociates.com

We hope this report has given you a snapshot of market trends and, as always, we would be glad to discuss them further with you.  If you plan to list your property this fall, would like a more detailed analysis of specific areas, back issues of The Hole Report, or a professional Realtor to represent you in your next real estate transaction, please call or email one of the numbers below or write to P.O. Box 4897, Jackson, WY 83001, Attn: David Viehman or Devon Wheeldon.

Sincerely,

David E. Viehman - Owner/Editor, Associate Broker
Devon Viehman-Wheeldon – Owner/Editor, Associate Broker
toll-free: 888-733-6060 x9941
direct: 307-734-9941
email: davidviehman@jhreassociates.com
www.jacksonholeresortproperties.com
www.jacksonholereport.com
www.jhreassociates.com



*All statistics are supplied by sources that have been deemed reliable but are not guaranteed.

*All statistics quoted in this newsletter are based on sales in 2009 compared to sales in 2010.

*Median sale price is the cost of a property that has an equal number of sales above and below it on the price scale.

*Average sale price is the total combined dollar volume divided by the number of sales.

*The word “Overall” in this newsletter refers to all sales in Teton County combined (homes, lots, condos, commercial and ranch).

*The term “Market Value” means; the value of a property in terms of what it can be sold for on the open market; current value.

*While other local Real Estate Brokerages attempt to report on the local real estate market, Jackson Hole Real Estate Associates LLC is the only company to track every single transaction.  Therefore, if you want the most accurate information to help guide you through your next real estate transaction, call us today. “We are the Experts”.

© Copyright 1995 - 2010 by David E. Viehman and Devon Viehman-Wheeldon dba Jackson Hole Real Estate Associates LLC. All rights reserved.  No part of this publication may be reproduced or transmitted in any form or by any means without explicitly written permission from David E. Viehman or Devon Viehman-Wheeldon.