Welcome to the Teton Valley Report. This semi-annual report, published at mid-year and year end, is authored by Jennifer Honney Dawes with Jackson Hole Real Estate Associates and focuses on the Teton Valley, Idaho and Alta, Wyoming market.

We are Selling our Way Through to the Bottom

 

In summary

A deeper look into the Teton Valley real estate market yields a little more positive thinking. There are signs of recovery underneath the foreclosure notices in the newspaper, distressed Seller advertisements and abandoned homes in your neighborhood. The truth is that the inventory is down from 2010 in every market segment, the residential transaction numbers are up and there was half of the foreclosure dollar volume in 2011 than in 2010. With stronger home sales, we’ll see a reduction in the amount of housing inventory and an improved ability to absorb foreclosed homes. This increased demand will eventually start to put a floor under home values. That is the necessary path to a market bottom.

Residential Overview

The most promising market segment at the beginning of 2012 is the Residential sector. Looking at all residential transactions in 2011, there were 220, which is a 23% increase from 2010. The inventory is down as well, with 295 homes listed at the end of 2011 vs. 397 at the end of 2010, a 26% reduction. Unfortunately, the average sale price of homes was down too. The average price in 2011 was $257,000, down 18% from 2010, due to the bank owned inventory that came on the market at staggeringly low prices. The low end of the market continues to see the most activity, with 68% of the transactions occurring in the $0-$250,000 range. Because this pricing is so attainable for the bulk of the buyers who have interest in the valley and because the interest rates have been so favorable, the transaction numbers have achieved a health absorption rate for the low end of the market. 

Resort Residential

Further dissecting this information by looking at the Resort sub market apart from the rest of the transactions, gives a clearer picture of the entire residential market. 40, or 18%, of the residential sales were in the resort market, which was consistent with 2010 sales. The average sale price was similar as well at $529,000, just a 10% decrease from the previous year. 

Non Resort Residential

Transactions outside of the resort market saw the most changes, influencing the market greatly, as they made up 82% of the total residential market in 2011. Again, the low end of the market saw the most transactions. 141 of the 180 (78%) non resort home sales were in the $0-$250,000 price range. Just 15% of the sales were in the $250,000-$400,000 range, 4% were in the $400,000-$700,000 range and 1% was in the $700,000 and over range. For the third year in a row, the average sale price was down in the non resort residential market. It was $305,000 in 2009, $244,000 in 2010 and $196,000 in 2011. 

Snapshot of the Market: Aspen Pointe Development

Aspen Pointe Development is a townhome development located off Ski Hill Road, along Teton Creek in Driggs, Idaho. The average Aspen Pointe townhome has 1820 square feet, 3 bedrooms and 3 bathrooms. Exemplary of the valley’s residential market over the last seven years, Aspen Pointe quickly climbed to a market peak in 2007 and 2008 and then fell to about half of that value in the last three years. In 2005, the valley was alive with new development and confident builders, developers and speculators with the arrival of world class golf communities and the news of Grand Targhee’s redevelopment plan. Buyers were starting to invest at prices far exceeding historical sale prices. The average sale price for an Aspen Pointe unit was $355,000. By 2006 and 2007, the real estate market saw incredible inflation and record sale prices for land and residential property. Aspen Pointe averages were $367,000 in 2006 and $412,000 in 2007. The national economy started struggling in 2008 and the lights went out in Teton Valley, ID in the fall of that year. Aspen Pointe sales peaked at $414,000 in the beginning of 2008 and then dropped to $260,000 in 2009. They dropped again to $237,000 in 2010 and had an insignificant increase to $241,000 last year, due to one sale of $284,000, which brought up the average. Short sales and REOs have driven down the sale prices in that development, common with many of the developments that were new to the valley in 2004-2007.

Alta Residential

Alta, WY had a similar year, with 6 residential sales, just one more than the previous year. The average sale price was slightly down at $572,000 vs. $591,000 in 2010. 

Land

The Teton Valley land market saw little change from 2010 to 2011, with 52 sales in 2010 and 51 last year. The average sale price was down to $71,000, an 18% decrease from 2010. 18 of the 51 sales were in the resort market, which was consistent with the previous year which saw 19 resort land sales. An anomaly in the Teton Valley market, the resort land market experienced an increased average sale price in 2011. The average price was up to $55,000 from $40,000 in 2010. The rest of that market (33 of the 51 sales), outside of the resort sector, experienced a significantly decreased average sale price at $80,000, down from $116,000 in 2010. That is a 31% decline.

Alta Land

There were 3 land sales in Alta, WY with an average sale price of $244,000 in 2011 vs. just 1 sale for $78,000 in 2010. 

Foreclosures

A statistic that is very promising for Teton Valley, ID is that there was half the dollar volume of foreclosures in 2011 than in 2010. $55M of assets foreclosed in 2011, significantly down from $110M in 2010. The Driggs, ID branch of Alliance Title Corporation, who closely tracks foreclosure activity, predicts that there will be roughly half of the dollar volume of foreclosures in 2012 or approximately $28M. As mentioned above, the homes that have foreclosed in the last three years have become REOs with very low listing prices, negatively affecting the residential market. With a continued reduction of that type of listing inventory, the market will have a chance to stabilize. 

REOs and Short Sales

Alliance Title in Driggs predicts that 50% of the transactions they handled in 2011 were short sales, 40% were REOs and just 10% were traditional transactions. They reported similarly at the end of 2010, stating that 80% of their sales that year were a mix of REOs and short sales. Because the listing prices are so low, REOs and short sales are winning the Buyers and record lows in every category are the result. 

In Closing

With inventory down from 2010 in every market segment, increased residential transactions and half of the foreclosure dollar volume today, there are positive signs of a market recovery. The increased average sale price in the land resort market could also indicate a “bounce” in that category, which would certainly be a great sign in a submarket which has reported very grim statistics the last three years. 

We hope that you have enjoyed the third issue of the Teton Valley Report. Our hope is that it has offered a snapshot of the state of the market end of the year 2011 and some foreshadowing about Q1 and Q2 of next year. 

 

 

Chad & Dianne Budge, Owners/Associate Brokers
Rebekkah Kelley, Sales Associate

ChadBudge@jhrea.com (307) 413-1364
DianneBudge@jhrea.com (307) 413-1362
RebekkahKelley@jhrea.com (307) 413-5294

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Definitions: 

What makes up Teton Valley, Idaho?

For the purposes of this report, Teton Valley, shall be defined as Victor, Driggs and Tetonia, Idaho.

What makes up the “Resort Market” in Teton Valley?

For the purposes of this report, the resort market in Teton Valley shall be defined as property located within the following resorts: Teton Springs, Teton Reserve, Huntsman Springs and River Rim Ranch.

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.

*The statistics used in this report are from the Teton Multiple Listing Service (MLS), unless specifically referenced otherwise. Any opinions expressed are that of Graham4 and its team members and not of Jackson Hole Real Estate Associates as a brokerage. 

* This report does not go into detail on every segment of the market, but is intended to offer an overview of general market conditions, changes in number of transactions and average sales prices. The values of individual properties will most likely vary from these graphs. 

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

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

*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 2011-2012 by Jennifer Honney Dawes and Graham4 LLP. 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 Jennifer Honney Dawes and Graham4 LLP.