whj } REAL ESTATE ROUND TABLE
JACKSON HOLE’S REAL ESTATE MARKET CONTINUES ITS CLIMB
“There are lots of buyers out there right now, and when they see a good product that is properly priced it does not stay on the market very long.” —JACK STOUT OF BERKSHIRE HATHAWAY HOMESERVICES BROKERS OF JACKSON HOLE REAL ESTATE
The Jackson Hole real estate market is always of interest to anyone looking for mountain town living at its very best— whether it’s world-class outdoor recreation for all seasons, small town living, or the unmatched view of verdant valleys and mountain vistas. For 2016, Western Home Journal gathered some of Jackson Hole’s premier real estate agents for a roundtable discussion on the state of the market. This year, Brandon Spackman of Jackson Hole Sotheby’s International Realty, Kurt Harland of Berkshire Hathaway HomeServices Brokers of Jackson Hole Real Estate, Jack Stout of Berkshire Hathaway HomeServices Brokers of Jackson Hole Real Estate, and Karen Terra of Graham-Faupel-Mendenhall & Associates participated in the WHJ roundtable discussion. Take a look at what the pros have to say.
Q. AS JACKSON HOLE MOUNTAIN RESORT CELEBRATED ITS 50th ANNIVERSARY THIS PAST WINTER, WHAT IS THE GENERAL TEMPERATURE OF THE REAL ESTATE MARKET GOING INTO THE 2016 SUMMER SEASON?
KAREN TERRA: With the 50th anniversary of the mountain resort, we had a very strong winter season. In addition, it’s the centennial of the parks this summer where they’re expecting five million people to come through Jackson. Interestingly enough, it’s also the 100th year anniversary of our hospital as well as the 20th anniversary of Old Bill’s Fun Run. These are celebrations close to our hearts for those of us who live here. I believe this summer will be a very strong summer season due to all the celebratory activities going on.
BRANDON SPACKMAN: The winter season was very strong. The mountain did an excellent job marketing the 50th anniversary and creating a great deal of energy. We saw many regional people driving to Jackson Hole from other states, more so than in years past.
KURT HARLAND: The resort did a great job with their #1 ranking and the new Teton Lift, a high-speed quad over 1,700 vertical feet of terrain, took a lot of pressure off the base of the mountain during the peak times such as the Christmas and New Year’s rush, spreading people around the mountain. It also opened up more mountain terrain that previously had only been accessible by hiking.
JACK STOUT: In the strong market, we saw more sales not recorded. The numbers can be a bit deceiving because there are many transactions going on. Often times, it’s not happening in our offices. It’s buyers and sellers getting together on their own, and those sales aren’t recorded.
KT: In 2015, we passed the $1 billion mark in sales, which we have not done since 2007. With property values almost fully recovered from the downturn in some market segments, overall the buyers’ sentiments were much more positive regarding making acquisitions at all price levels.
BS: Some of that, too, is due to a lack of inventory on the market. People can’t find what they want.
KT: Currently, we have the lowest inventory in 30 years, which certainly gives us pause. The first quarter of this year has been slower than anticipated. Whether we will be able to succeed to another billion-dollar year again will depend on what properties come on to the market for inventory this summer season.
JS: And properly-priced inventory.
JS: In 2008 and 2009, buyers and sellers learned a little bit. They’re not throwing money at real estate the way they once were. They’re waiting until they get the price they want. Or, if they see the value, they’re acting on it. There are many potential buyers out there right now and when they see a good product that is properly priced, it does not stay on the market very long.
KT: The volatility of the stock market has caused some buyers to remain on the sidelines. For buyers, especially at the high-end of the market, Jackson is a completely discretionary investment. With the stock market and overall global uncertainty, buyers will err on the side of caution rather than making a multi-million dollar investment. These houses are a realization of a dream or a culmination of a lifestyle desire. These owners don’t have to move to Jackson or be in Jackson to complete their job, often they have waited and planned for this acquisition and so they will exercise patience to ensure they are making the right move.
BS: Some of the high-end transactions that we’ve seen were buyers moving their money out of the financial markets and into real estate. I expect this trend to continue.
JS: Yes, many buyers are moving their money from the stock market and into real estate in Jackson Hole.
BS: Especially in the really high-end real estate market.
BS: We recently closed on a house at $10.25 million that we had on the market for some time.
KT: We’re fortunate to also represent ‘legacy’ buyers and sellers whose decisions are not as affected by the overall economy. There are a few pockets of inventory throughout the valley that can defy the market when a property gets listed. Because of their unique location or amenities, there is consistent demand for these properties and we will often see multiple offers when something comes available in one of these truly unique areas. These are buyers who are not looking to buy and ‘flip’ a trophy property; they are looking at long-term benefits for their family or, in some cases, conservancy.
BS: The Walton Ranch is under contract. It’s a 1,900-acre ranch, which was listed at $49 million.
JS: It cannot be subdivided. There are a few homes on it. Almost all of it is under easement and there’s no real development potential, so it’s a legacy property.
BS: It’s one of the first properties, and most significant, to be protected by a conservation easement with the JH Land Trust.
Q.TOURISM IN THE JACKSON HOLE AREA CONTINUES TO INCREASE IN RECORD NUMBERS EACH SEASON AND MUCH OF THAT TOURISM IS FUELED BY JACKSON BEING AT THE GATES OF SO MUCH PUBLIC LAND. DOES TOURISM HELP OR HURT REAL ESTATE SALES?
KH: I think it does help all of our businesses, not just real estate. Whether it does or doesn’t, it’s a big part of our history and future.
JS: It’s a fine line here because so many people enjoy the fact that there isn’t a lot of development (because the majority of the land here is publicly owned). You don’t want to ‘kill the goose,’ so to speak. It’s why Jackson is so attractive to certain people as opposed to other mountain towns. There isn’t that much development existing and there won’t be much more to come.
KT: To be clear, last year we did a billion dollars in real estate so the low sales numbers we’re talking about are only the first quarter right now. We don’t really know what’s going to happen. I think that tourism absolutely helps real estate sales in Jackson. Visitors come here and get inspired by this destination, which helps them to make space in their lives to return. As a result, we often hear from people who came to Jackson as they were growing up and then decided to make it a part of their lives permanently.
JS: The summer is really the time of year when we sell the most.
KT: We need well-priced, good properties for all the interest we get.
KT: I think that the Mountain Collective pass gave people a reason to come to Jackson Hole. Similar to the way our 13 non-stop flights from all over the nation have given people a reason to come. Once they come, they fall in love with Jackson—how could they not?
JS: When the Four Seasons came in 2003, that’s what happened there. There are people who only travel to Four Seasons, and they came to Jackson to stay in one of the nicest hotels in the world. The Four Seasons gave them a reason to come to Jackson and, then, they looked around and said, ‘wow.’ KH: To speak to the Mountain Collective, yes there are new buyers who have the Mountain Collective pass. I work very closely with the Mountain Sports School. There have been a lot of new visitors here last year and this year. This year, I think because of the 50th anniversary and the previous #1 rating for ski areas, Jackson Hole Mountain Resort is more on the map than it ever has been, especially with the media, publicity, and marketing done by the resort and the community. I have had more first-time visitors to the mountain this year than ever before. I have never noticed, especially in the higher income bracket, whether it’s the Four Seasons, Terra, or private homes in which they’re staying, but I have noticed from my long-term residents who own second and third homes here that they’ve brought a lot more of their friends here for the first time. This is the network I see that is really looking for real estate or people who have been here 5 to 15 years. They’re friends are coming here for the first or second time, and they are really interested in real estate in Jackson Hole.
BS: Shooting Star has been a great example of what Kurt said. There are so many examples, for the most part, of younger families in the midst of their careers with young kids, and they want things to do and have it be easy. You have the mountain, golf course, and the club so they are pulling in all their friends.
KH: That’s who is building it. One person from a certain area comes, and, then, a couple of their friends come and buy places so a social group is formed and they interact with each other at the club.
BS: That has been a huge success story in our marketplace and part of the market that has been very strong. It’s a very efficient use of their time.
KT: People want ease with any property they buy. They don’t want a ton of upkeep and having house managers, which we are certainly seeing with this. The good news is that our market will always be strong because of the tax-friendly status of Wyoming.
“There are lots of buyers out there right now, and when they see a good product that is properly priced it does not stay on the market very long.”
—JACK STOUT OF BERKSHIRE HATHAWAY HOMESERVICES BROKERS OF JACKSON HOLE REAL ESTATE
BS: This increases every year when people are moving from California and other parts of the country. It’s not just taxes, but we have resources such as water, a welcome change if you are from California.
KT: We’ve always had old money in Jackson such as the Rockefellers and the Hansons, and there’s no place in the world I can think of that you are within two hours of Yellowstone, an hour from Grand Teton National Park and you have the Center for the Arts, which brings the New York City Ballet for the summer as well as the Grand Teton Music Festival, which brings world-class musicians for their summer season and you have the National Wildlife Museum of Art. There’s an excellent hospital, and you can work from anywhere today, so all of that with the four-season recreation available here makes Jackson extremely appealing too. We were a ranching community before we ever became a winter resort, which is the basis of this community. We have over 100 non-profits so there are many ways to jump into the community. Old Bill’s Fun Run raises over $10 million in one day. We’re the most philanthropic county in the country. All in all, Jackson is a very appealing place to live.
Q. WITH LESS LAND AVAILABLE FOR BUILDING, IS THE REMODEL BUSINESS BOOMING?
BS: I think we may have seen more remodels during the recession, as owners didn’t have the ability to trade up or to build a new home.
KT: They wanted to add more value to their house because they couldn’t sell or buy.
KH: Or they couldn’t get financing to upgrade to the house they wanted.
BS: As we pulled out of the recession, there’s been a huge bump in new construction.
KH: The aged homes are being picked up and finding that value for investment so that either scraping, repurposing, or updating the brass fixtures in the bathroom to something more recent—you will see a lot more of that.
“Our market will always be strong because of the tax-friendly status of Wyoming.”
—KAREN TERRA OF GRAHAM-FAUPEL-MENDENHALL & ASSOCIATES
BS: We continue to lose available land, so we are going to see either major remodels or teardowns.
KT: We sold a house in the Gill Addition a few years back when it was more affordable, priced in the $700,000 range, and with great aesthetic taste and design; the buyer gutted it to the studs and sold it for $1.9 million. The best pieces of land were bought first and those have the oldest homes.
KH: Some of the aged properties that are on the market are for people who have a vision to repurpose or remodel. Most of the dated properties don’t fit our current buyers’ needs in that they want something to function for the next 10 to 15 years where things don’t have to be replaced such as heating systems, roofs, sidings, or appliances. However, many of the dated properties are realistically priced depending on what you want to do with that property.
Q.WHAT ARE SOME STATISTICS IN THE MARKET RIGHT NOW?
BS: The 1st quarter numbers are down a bit from the same quarter last year. Unit sales fell more than sales volume, indicating more activity in the high-end market.
KT: The median sale price for homes last year was $850,000.
JS: We ran various searches, and the median list price for a single-family home is $2.3-$2.4 million. Not including condos or townhomes.
Q. WHAT KIND OF BUYERS ARE YOU SEEING CURRENTLY?
BS: We have always drawn buyers pretty equitably across the country. Buyers from Texas have been less active in the market lately, which is likely due to the drop in energy prices. California buyers have been more active the last few years due to tax increases and social and resource concerns they are having in their state. We see very little foreign investment. I’ve worked with quite a few buyers out of London who tend to also have a place on the East Coast, making a quick visit to Jackson an easier alternative when state-side.
KH: It’s a mix. I’m seeing many local first-time buyers and homeowners who are upgrading from their current home. I’m also seeing out-of-market buyers who are buying here for the first time. It’s all over the board.
JS: The one common dominator is the active lifestyle buyer. Due to the gains in the telecommunications industry, we’re seeing a lot of high net worth individuals who love the outdoors being able to move here.
KT: Where else would you find the four seasons recreation, the culture, and the community we have?
JS: It does help people who can afford to buy something here, to do it because it helps them out financially.
KH: I do know people who are moving here because families are disenchanted with what is going on in the rest of the country such as school shootings and safety. It’s not just Jackson; there are other communities around the mountain region that are desirable. We want to live in a community where we don’t have to set the alarms and lock the doors.
KT: This community is a huge draw for people. I have lived in Jackson for over 30 years, and I don’t have a key to my house.
JS: We don’t lock our doors and our neighbors will be there if something goes wrong.
KH: The club trend, whether it’s Shooting Star, The Sporting Club, or Caldera House, is hot right now. They’re marketing to that segment of the population that is trying to maximize their time. They can come in and have their skis and golf clubs and their fishing gear and store it at the club and be out there doing stuff as quickly as possible. It comes at a price. It’s not inexpensive to be involved in any of these clubs. It’s a trend that I see that has not been around at this level.
KT: In terms of interiors, we see a continued shift towards modern. We did a spec house in Teton Pines last year and we chose things like ceramics that looked like wood and leathered granite so the finishings were upscale and we had the warmth of the fireplaces. In addition, we had a lighter palette.
JS: Something interesting that you see at communities such as Shooting Star is that the high net worth individual is getting younger. We are seeing people in their late 30s and 40s because they can bring their work with them.
KH: Even in the valley, log homes are still being built but there’s a broader spectrum of homes being built. And, it’s true the wealthy getting younger is a huge factor because they can be whereever they want to be, and they may own two or three homes. People have built their companies and sold them, and they want to diversify.
KH: The mix of the demographic in Jackson is lot more accepting of the mountain modern. It’s not strictly a log home community any more.
BS: People are doing a nice blend of the mountain modern style. The majority of buyers are looking for that mountain modern, but we don’t have any inventory. What’s been built has been for the end user.
“With the 50th anniversary and the #1 rating for ski areas this year, Jackson is more on the map then it ever has been, especially with the media, publicity, and marketing done by the resort and the community.”
—KURT HARLAND OF BERKSHIRE HATHAWAY HOMESERVICES BROKERS OF JACKSON HOLE REAL ESTATE
Q, WHAT ARE SOME OF THE EXPECTED SALES PROJECTIONS FOR SUMMER 2016?
KT: We’re just expecting a huge influx of people. The first phase at Pine Glades sold at $1.1 million and now it will go up to $1.8 million and a new phase will open up too. Town has been particularly active in the real estate market, condos, and townhomes.
KH: The things I’m excited about this summer are the revamping of the Snow King Resort where a ton of money has been pumped, and I think that will keep people entertained with the mountain coaster, ropes course, and everything going on up there is going to be great. They’re redoing the hockey rink, which will be a great improvement. Lots of the infrastructure that needed some updating is happening. They will start working on the new lift at the mountain resort. The new gondola will replace a couple of the oldest lifts and that’s exciting and will move people effectively from the base area.
JS: Being tied to the world economy, if that continues without big hiccups, I don’t think prices will go down. I think they will go up.
BS: Lots of actively searching buyers, but it will depend on what comes to market and at what price points. With the elections and concerns both domestically and abroad, there’s some conservatism out there.
Q.TALK ABOUT THE AFFORDABLE HOUSING ISSUES IN THIS COUNTY AND HOW PEOPLE ARE
RESPONDING TO IT.
BS: The Airbnb trend grew out of the recession when a lot of homeowners rented in order to keep their homes because it allowed them to generate extra income to pay their mortgages and not go into foreclosure. After moving out of the recession, homeowners continued to rent, which their neighbors were not too happy about having transient people. It took away from the neighborhood feel.KH: The interesting thing about Airbnb is that it’s not necessarily a stand-alone, short-term rental property, it could be someone’s empty room and that’s something we have not really seen. It’s not a traditional rental, which is prevalent now.
BS: Most of the county is zoned long-term. In long-term zoning, you are not allowed to rent short-term or on a nightly basis. We have very few resort-zoned areas, only Teton Village, the Aspens, Spring Creek Ranch, parts of JH Golf & Tennis, and Snow King Resort.
“WE CONTINUE TO LOSE AVAILABLE LAND, SO WE ARE GOING TO SEE EITHER MAJOR REMODELS OR TEARDOWNS.”
—BRANDON SPACKMAN OF JACKSON HOLE
KT: It has to be a collaboration between the public and private sector to solve the affordable housing problems. There are solutions if the government could up-zone various locations so affordable housing would be possible. There are different kinds of housing needs such as a winter mountain liftie needing only four months as opposed to the year-round needs of an educator. These are different situations that need to be addressed.
JS: I was on the board of the housing authority for ten years, and I chaired it for five years. Everyone understands this is a problem, but that there are different ideas of what the solution should be. Some people believe the solution is in the outlying communities. I tend not to believe that because you disenfranchise people in two communities. It’s a critical problem because of the health of the community. You need to have different income and different interests. It’s an extremely complex problem.
KH: A huge point in this issue is that when you have teachers and emergency service personnel living outside the community there is a disconnect. When teachers are living in a community that is an hour away, they don’t participate in the community in the same way as a person who does live in the community. It’s a huge issue as our schools grow; we need more schools and the infrastructure of this area has not kept pace with the number of people who want to live here full time. People want to vacation and those numbers are growing, but also people who want to live here as opposed to second and third homeowners. I think that number will get bigger as they look to this as a retirement community.
BS: We’re all concerned about the change in our community. Today, it’s still an amazing community. There is a turnover right now with older ski patrollers, teachers, and others who may have bought housing in the ‘80s when it was more affordable. They’re now retiring and selling their properties at a number that is not affordable to the same industry employee.