The Direction of Real Estate in Jackson Hole :: Part 2

Now that the numbers are in from the first two thirds of the fourth quarter we can project the direction Real Estate is heading in Jackson Hole due to credit tightening on a national basis. We will compare October and November 2006 to the same time in 2007. The first area we will examine is Teton Village, one of the premier ski areas in North America. The average sales price in the village for condominiums jumped a hefty 83% from Oct and Nov 2006 to the same period in 2007. This we conclude is due to steep demand for the properties since many are ski in ski out, others are only moments from lifts. Investors like them due to their short term rental histories. Some properties in the village sell between nine hundred and one thousand dollars a square foot. Not exactly middle America. Now let us look at the dollars closed for Oct and Nov 2007 to same months in 2006. In 2006 there was $13,515,500 closed for the two months. In 2007 the amount is $7,097,500 a decline of 47%. When considering the hefty jump in prices, one concludes the housing problems in the rest of the country are affecting this resort community. Teton Village is the busiest area for the valley in winter and very popular in the summer due to its proximity to Teton National Park and Jackson Hole Mountain Resort.

Let’s take a look at the entire Jackson area for Oct and Nov of 2006 and 2007 as reported by the Board of Realtors. We will examine new listings which came on the market and compare them to listings which closed for the same periods. In Oct and Nov 2006 there were 665 listings that came on the market. During that same period 551 deals closed. For 2007 new listings on the market were 823. Deals that closed were 294. The percentage drop for closed deals during the two periods was another 47%. Interestingly enough out of 294, 176 closed in October compared with only 118 for November. This is the lowest amount of deals which closed in any one month since before December 2005 when the data was compiled. If this trend continues which indicators suggest, December will fall to the lowest level again in years. 22% more houses were listed this year for Oct and Nov than 2006, compared to 47% less closing on homes. People are finding they need more cash to put down now to make other deals work because their credit does not go as far. Problem being less people are able to purchase for the same reason. When I last reported back in October we here in Jackson were not sure if this credit tightening was a blip or a continual reflection on the radar screen. That being said we will then check this out after our final numbers are in for the quarter. We can predict that for some, this reflection will be a cloud over many people’s heads. Once we flip the coin though, trend continuing, it could by mid 2008 turn into a buyers market that no one has ever seen! Once again we will be reviewing and analyzing the numbers as they come in. Look for our next contribution in about a month. If you have comments please send them to mark@jacksonholerr.com