It is true that at any given moment in the Teton Valley Idaho Market, there are between 4-600 available building sites for sale. Time and again, I converse with someone about oversupply of land. This can be true, but it is really a statement about one sector of the real estate land market in Teton Valley – that is of course subdivision lots. Even those, however, have their own sectors that have very limited supply. How can this be, you ask? Let’s run through some of the popular categories or subcategories of land that people frequently look for, that isn’t necessarily in high supply:
No CCRs: This is the most common and obvious area of lack of supply. I received a fair share of monthly inquiries from someone looking to build something that doesn’t conform to subdivision requirements. Tiny houses, yurts, places for an RV, the list goes on. With respect to what is available, in a way, it’s an unintentional bait-and-switch. Many people are drawn to the area because of affordable land prices. They see building sites starting at very reasonable prices, but don’t yet understand what they can or cannot do with those building sites. When they discover that they must build a 2500 square foot home on that building site, they begin to explore options that better suit their needs, oftentimes something without subdivision restrictions, and they aren’t alone. Sometime just after the turn of the century, Teton Valley recognized that if they did not create some sort of requirement to properly subdivide larger pieces of land, they are going to end up with unorganized blocks of land in farm fields without any infrastructure or control for chaos and madness. Therefore, they enacted new requirements for proper subdivision of land, and authorized what is referred to locally as a one-time-only land split. Basically, each larger tract, usually more than 20 acres, can be split one time. Otherwise, the proper subdivision process must be followed. While this process does require that each subdivision shall install road and infrastructure, it does not require strict CCRs. However, since the bulk of the development in Teton Valley occurred between 2003 and 2008, these subdivisions followed trends at the time which included home sizes between 1600 and 2500 square feet, or larger. The inventory of un-restricted land today is either a product of land splits prior to this County enactment, or the remaining one-time-only divisions that have not yet been performed. Also, old downtown building sites within the city limits of Driggs, Victor, or even Tetonia also house a number of these lots, but the inventory reduces as time goes on. Because of the relatively high demand, and the low supply, these types of building sites are amongst the most expensive in Teton Valley, a contrast between very affordable subdivided parcels.
Trees: Because we live in a wide-open, flat, valley floor that has been converted over many decades to mostly agriculture land, areas with trees are generally limited to creeks, streams, and the surrounding foothills of Teton Valley.
Surrounding Foothills: This is an easy one, there’s only a narrow strip of land between the valley floor and the National Forest, what I refer to as the “foothills”. While lots can be affordable as you reach the North End of Teton Valley, the Southern end is quite different. At any given time, there aren’t more than a handful of accessible, desirable listings in the surrounding foothills.
River or Creek Frontage: Nothing creates a romantic atmosphere and a desirable place to live like being on one of Teton Valley’s Creeks, or the Holy Grail, the Teton River. Supply is obviously limited to the banks of one of these creeks flowing from the canyons of the surrounding foothills of the Big Hole or Teton mountain range, but it is almost impossible to locate available land along the banks of the Teton River. The Teton River is formed by a culmination of creeks and springs on the South end of the Teton Valley and gradually becomes a river about 6 miles South of Driggs. It gains creeks and momentum along the way, ultimately exiting Teton Valley at the North end of the valley below River Rim Ranch, becoming class 5 white-water rapids before flowing into the Snake River. Much of this land is protected in conservation, and the few available parcels that remain are held tightly and traded infrequently.
As I mentioned at the beginning of this writing, even subdivided lots can have their own specific sectors or Categories in the marketplace that naturally limit availability. I would consider one such category to be Teton “View Corridor” building sites East of Highway 33, and between the 2.5 Mile and 6 Mile mark North of Driggs that creates the full, Four Peak Teton view. As you begin to narrow these lots down into areas where view corridor seekers prefer, the inventory reduces to only a handful available building sites depending on the price range.
I believe land today, and likely in the future, will be a viable investment for these reasons. The prices are low because of the perceived supply, therefore the value, in my opinion, is high. There are only very short periods of time which I believe land sells at unsustainable price points, 2007 and 2008 was an example of this. These land bubbles are typically very short, and do not happen frequently. In addition, holding costs for land are usually very affordable with relatively low property taxes and homeowners dues in most of developments. For these reasons, land is becoming one of my preferred recommendations for affordable long-term investments in Teton Valley.