November 2020 - Teton Realty Blog

# Sales
Earlier this summer I wrote about the sudden market craze and it’s impact on land sales. Then, there were 292 (August 16th) land sales with around 100 more pending sale. I predicted by year end we would hit 600 sales in Teton Valley & Alta. We’ve hit 582 as of this writing with 100 more pending sale. We’ll see how many of those close this year.

While we’re talking sales, residential is also way up in terms of # of sales. 365 YTD with another 75 pending, to be exact. That’s way up from 2019 with “only” 289 sales, but land is what stands out here.

Sales Prices
Sales prices, as you might guess, are also up significantly. Both land and residential averages are slightly skewed as a result of a few seemingly fantastical sales prices, but the average land price is down, likely due to affordable lots being snapped up.

The averages sales price in 2019 was $132,821 while 2020 is down about 20% to an average sales price of $118,775.

The average residential sales price in 2019 was $449,732. The average price based on sales to date is $585,480, up nearly 25%.

New Homes & Construction
Building and building permit (and building costs) numbers are strong, but rising build costs seem to be keeping things at bay. The county is reporting 112 permits (not including city permits) for the Spring & Summer season. Not having historical data, I’ll use sales data to make a point;

2020 YTD has seen 145 sales built in 2019 and 2020.
2019 saw 175 sales built in 2018 and 2019.
2007 saw 302 sales that were built in 2006 and 2007.

Past Predictions
I’ll bet that the market will outpace my 600 land sales prediction by year end, possibly by a significant margin. This is historical. After all, 2007 (my universal point of reference) saw only 626 land sales. While digging through past posts I found an article I wrote in 2016 about the potential impacts of the 2016 Presidential election. The post didn’t have much to do with elections at all (I think the point was that elections don’t usually impact real estate) but more with Real Estate cycles in general. It quoted a Harvard article written by Teo Nicolais talking about market cycles. Using his methodology (barring any major interruption such as global war) we should be in the midst of a Hypersupply phase on the cusp of a slowdown with rents on the verge of dropping. This is clearly not the case, but I would certainly call the Covid-19 pandemic a “major interruption”. No, it hasn’t slowed real estate or refinances with historic rates, but I would argue that it has slowed construction and speculative real estate as a result. If construction costs don’t come down, or worse, continue to rise, will this create (or continue to inflate) a bubble? Possibly. It all depends on how the market reacts to the increasing prices and sales volume such as that data provided above.

On that note… (Sorry, I’ve got to say it) – It is a great time to consider selling NOW. If it’s in the cards, let us provide some data to help. It’s easy, free, and no one in our firm is pushy. Learn More Here.

With the unprecedented number of real estate transactions of late, I seem to be getting the same question quite a bit; what does contingent mean? If it says “Continue to Show”, should we look at it? What is the/a contingency?

First, let’s get “contingency” out of the way. I’m not pulling this out of the dictionary, but in my line of work a contingency usually means that there is an event that needs to take place before the contract can move forward, and provides an opportunity for a Buyer to withdraw from a contract without ramification. Common examples of contingencies include a buyer who has a contingency to obtain financing, or a buyer who has a contingency to complete a home inspection or a due diligence period. Contingencies can also include circumstances where a buyer needs to sell a property before they can close on the subject property, but this is rare in markets that are as busy as ours has been. The reason this is less common is because sellers in hot markets are less inclined to accept major contingencies beyond the common ones I mentioned above.

Moving on…

At the time of this article, there are 3 classifications of properties that are under contract, or in other words, have an accepted offer with another party. These classifications are for the Teton MLS, note that other areas and real estate associations label contingencies or classify properties with an accepted contract differently.

1) Pending

If a property is labeled as “Pending” it usually means that the seller has accepted an offer that has no contingencies. It might be referred to as “Pending”, “Accepted Offer” or “Under Contract” when speaking with an agent. Certain Real Estate websites may also label listings this way.

2) Pending, Contingent

A listing that is labeled as “Pending, Contingent” normally means that there is an accepted offer, but there is some sort of contingency in place. Usually these are common contingencies such as an inspection period or financing as mentioned above. Similar to “Pending” listings, these types of listings are often referred to as “Pending”, “Accepted Offer” or “Under Contract”.

3) Pending, Continue to Show

Properties that are labeled “Pending, Continue to Show” usually indicate that there is a more substantial contingency like an extended inspection period, the Buyer needs to sell a home before closing, or another form of unusual contingency. There’s a caveat to this, it’s common in Jackson for agents to use this label more generally, even if there is not a significant or unusual contingency. Some websites May identify these types of listings as “Continue to Show, but they’re usually just classified as “Pending Contingent” or “Contingent” like other listings that have an accepted offer.

As a final note, agents often don’t change the status of a listing as contingencies are removed. Listings that are under contract and identified as contingent or mention that the property should continue to be shown may not have contingencies at all and the listing classification simply hasn’t been updated. In addition, it may or may not be fruitful to inquire about a listing that is under contract, but it never hurts to ask. It’s easy to follow up with your agent to obtain the status of the contract to see if it’s something that might be coming back to the market or have a contract that is on shaky ground.

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