Teton Realty Blog

Teton Region Real Estate Market Stats, Articles & News

Summer 2024 Market Update

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Since this is technically a blog article and my market updates live in a separate section over at TetonValleyRealty.com, I’m going to treat this market update more like a blog post, just to convey my general feelings and sentiment of the market.

Residential

The residential sector of the market in Teton Valley and surrounding counties (Teton County, Wyoming and Lincoln County, Wyoming) all share similar attributes and challenges, though at different price points.

Dare I call any sector of the residential market “starter homes” (considering the average residential sales price in the Teton regional MLS is well over a million bucks) this sector of the market seems to be accumulating the most days on market and is faced with the greatest challenges. Why? Back to that average sales price. While the average sales price in communities like Teton Valley and Alpine are under 1m, they are still big numbers. Combined with interest rates which remain stubbornly high, we are beginning to see Summer price reductions. In other words, residential listings priced under 1.2m in the bedroom communities or maybe 2m in the Jackson area (which generally excludes the luxury/second home market), are faced with the most difficult sector of the market today. Despite this seemingly grim data for Sellers, inventory is still extremely limited, and opportunities that fit the bill for most consumers are still few and far between.

The luxury market in all sectors (once again, at different price points depending on the micro market) seems to still be churning along, if impacted by nothing other than increasing inventory, primarily due to more builders jumping into the game, or at least focusing on projects of this caliber. Many similar models I have sold for builders have crept up ever so slightly in terms of price, but the market seems to be fairly stable. Summer inventory does seem to be further increasing, which could have a slight impact as the market stabilizes from the short-term yet jarring effects of the Teton pass closing, and the speculation of long-term closure, now behind us. 

Condos and townhouses are certainly plentiful, but inventory is slowly being absorbed. While I felt we were at a high point in terms of supply towards the end of last year and into the Spring, it does seem that that market is stabilizing. 

Predictions; to summarize, it’s obviously still difficult to see where the general economy takes us with inflation seeming to cool but interest rates remaining stubborn. For those that have been waiting to jump in, the message from many of the lenders in the marketplace has been to jump in now while Sellers in the “starter home” price point are vulnerable, taking advantage of lower interest rates when a refinance is realistic. That sentiment may have been a little premature a year ago, but it does seem that inflation is cooling and rates are likely to soon decrease. The “covid craze” seems to be subsiding, and some sellers appear to be faced with, and accepting reality in that regard. I know that many Buyers are waiting for a correction, but from my perspective, I hear fewer that believe this is soon to happen than those that think it won’t happen anytime soon.

Land

I have long said that the land market seemed to have stabilized towards the end of 2021, with the tremendous gains capped by new inventory and market stabilization. I still see small spikes and valleys in those trends in specific areas, the Teton view corridor is a good example. Ample supply (though unusual in these areas) can reduce overall prices, while limited availability can have the opposite effect, but in an even more dramatic way. Other parcels with some form of unusual feature can also benefit from limited supply, such as industrial zoned land, land without covenants and restrictions, land with interesting terrain, water features, trees or otherwise have all seen greater increases. Some areas, however, have seen greater instances of stabilization or even a slowdown, particularly those that lack any unique aspects or reside in communities with strict guidelines that require more expensive builds. 

Construction

As an aside and in line with the last sentence above, construction costs have remained surprisingly resilient to cooling and inflation. While some materials have reduced in cost, others have increased. Subcontractors are showing no signs of slowing down in terms of cost increases, which tells me that there is still plenty of work on the horizon. Many local governments have been inundated with new custom and speculative bills and just like the huge cost increases in terms of construction costs keeping new projects at bay, the difficulty in obtaining building permits, combined with stubborn construction costs has kept new inventory from exploding. It’s frustrating for builders and investors, but it’s probably keeping the market under control at the same time.

Guest Article: Lessons learned buying real estate in Idaho

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Author: Joe Mena – Victor, ID

As someone who moved to Teton Valley from a state where disclosing everything to buyers and home inspectors is mandatory, buying in Idaho was a big change. After a lot of discussions with TVR’s Tayson Rockefeller, I realized I needed to get serious about doing my due diligence, and I’m very glad I did. Eight years later, and countless conversations helping others make the move like I did, I hope that sharing my experiences here can help others for with everything from choosing the right land to the right builder and enjoying life to the fullest here in this wonderful place we call home.

Get to know Teton Valley

Home isn’t just the house you live in. It’s the community surrounding you, the history of those who lived here for generations, the culture they built, and the unique mix of people and personalities that makes every place so unique.

Before I started looking for land, my wife and I immersed ourselves in learning about Teton Valley. We vacationed here, rented homes for longer stretches of time, read about the history, subscribed to newspapers and magazines, and soaked up everything we could about life here. We developed a respect for the history and culture of this valley and moved here with a determination to become a part of it – not change it.

Choose the right Realtor

You don’t have to work with the first realtor you meet. Experience, personality, enthusiasm, honesty, and taking the time to understand what I really wanted were the factors that helped me decide who to work with. If you’re out of state, don’t be afraid to ask your Realtor to do boots-on-the-ground footwork for you. When I worked with Tayson and couldn’t be here in person, he walked different land/lots, shot video, and talked through the pros and cons to help me really “see” the land, even though I wasn’t there. It took a while to find exactly what I was looking for but having patience and persistence on the part of my Realtor won in the end, as we found exactly what I wanted.

Buying land

Land isn’t just about the acreage or the views. Before you buy anything in the valley, here’s the best advice I have: Make lots of calls. Research, research, research and don’t be afraid to do the work and ask lots of questions. Call county agencies, public health offices, and even local insurance agents for insights into the area. Talk to builders, well diggers, and excavators. Learn about water – yes, water – and how it affects the land. It’s like learning a new language: riparian wetlands, water tables, aquifers, irrigation channels, snowmelt, water rights, engineered septic, perc tests, etc.

In a valley that’s experiencing tremendous growth, realize that open space is gold and HOAs aren’t always a bad thing. If you’re looking at a subdivision with CC&Rs, ask for copies and read them thoroughly to understand what you’re getting into. Other things on our list that were important to us were high-speed fiber optic and paved or chipseal roads.  

Building a home

Take your time choosing a builder. Finding the right one might take a bit, but it’s worth it. Making sure you are working with someone who understands your vision, respects your budget, and has the experience and expertise to get the job done is non-negotiable.

Teton Valley is holding strong as one of the most stable and high value real estate markets in the country. This doesn’t mean you have to blow your budget or get into serious debt to build your dream home. I might get in trouble for saying this, but in my case I feel like you don’t always need the most expensive architect or surveyor for your project either. We found plans online and worked with a local architectural draft and design firm to customize those plans and get what we wanted. Much less expensive that way!

Another tip when building your home is to listen to the experts. Yes, your builder knows what he’s talking about, but so do the subcontractors who each have their own expertise. One sentence I found myself repeating over and over was “If this was your home, what would you do?” I’m smart enough to admit that I don’t know everything and was happy to listen to their advice and ideas. In the end, pick what’s right for you, of course. A few times we actually had to talk our GC into doing something more expensive, but in the end we had the house we loved and had incorporated ideas we were so glad we did.

Speaking of subcontractors, treat everyone who works on your house well. While our house was under construction, we traveled to Teton Valley once a month to check on the build and make purchases and decisions. Every time we made an on-site visit we made it a habit to treat whoever was working that day with pizza, donuts, coffee, cupcakes, etc. Those times sitting around enjoying food together were filled with invaluable local insights that helped us be more involved with the building of our home, and feel more at home here in Teton Valley.

The last lesson I will share from my own experience is don’t skimp and think to yourself “I’ll do that later.” Most builders will tell you that adding features during the initial construction of the home will end up being much less expensive, easier, and less invasive than putting it off down the line. Pay extra to have things done right at the beginning: get the whole-house generator, add on the bonus room, add A/C now. You won’t regret it.   I’m not an expert, but I am someone who successfully purchased the perfect land in an area I love, built the home of my dreams, and created a life that my family and I love more each day. When Tayson asked me to share what I learned during that process, I was happy to do, and I hope some of these tips help others like me.

But… That Lot is Smaller!

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I know I have written about this before, and I’m sure there is an article buried in the archives harping on the same issues here, but I think it’s an important topic.

Whether you are a Seller looking to value your own land, or a Buyer looking to acquire land of your own in the Tetons, understanding what impacts value is extremely important. This comes up time and again, particularly when it comes to the size of a parcel when compared with another. While the size of a parcel can obviously have an impact on value, it may not always be as much as you think. As an example, the difference in value of a 2.5 acre parcel compared with a 3.2 acre parcel (despite a 20%+ difference) will often be negligible. To further elaborate the example, the value of a 1 acre parcel adjacent to a 2.5 acre parcel in the same development may not only be negligible, but in many cases the smaller parcel could carry significantly more value. With that being said, let’s go through my list of value considerations when comparing parcels or lots that are otherwise “like in kind”, such as those in the same development, or in nearby developments.

In particular order, and of most significance to least in terms of my opinion of value, take a look, below.

1: View. While I wouldn’t necessarily always put this attribute on top, it is often of great consideration, particularly in subdivisions comprising 1-5 acre parcels, which is a typical size throughout the county. A parcel with view protection by way of building envelopes, terrain, roadways or otherwise can have significantly more value than one with some type of obstruction, or potential for obstruction. This can become even more important when it comes to Teton views.

2: Location. I’m not necessarily talking about location inside of a particular area, but location compared with another property sale or listing. A parcel adjacent to a main county or state roadway would often be considered of lesser value when compared with one nearby that might have more privacy. Location considerations can also come in the form of nearby features, which leads me to the next point.

3: Features. As indicated above, features and location often correspond with one another. A row of trees, a fire suppression pond, a berm, canal or any number of property features (which don’t necessarily need to be on the properties themselves) can impact value or bring added value.

4: Subdivision Attributes. While the property that one might be investigating may not even be in a subdivision, the chances are likely that one in the market for a building site is going to be looking at properties that are. However, not all subdivisions are created equally. Some offer advantages such as paved roads or favorable covenants and restrictions. In many cases, properties with minimal restrictions or no restrictions at all can bring more value than one with firm design criteria or subdivision restrictions. On the flip side, a development with great quality as a result of a well-organized homeowner’s association with robust design guidelines can also create an advantage compared with another nearby development that does not. These considerations can come in many different shapes and sizes. Another great example is rental restrictions.

5: Environmental or Adjacent Property Considerations. Examples can be wide-ranging, but might include high ground water which could prohibit certain construction types or add cost to construction methods, nearby factors such as farm equipment or older homes, and so on. The list can go on from here, but like many of the other considerations above, can also dovetail with some of these other listed items.

6: Size. Last, but not necessarily always least as I prefaced in the beginning of this article, size. I hope this article has made it easier to understand why acreage and its impact on value can be deceiving. Remember that a larger parcel often carries the same benefits with respect to flexibility and rights that a smaller property may have. If you’ve read many of my other articles, you’ll know that typically when it comes to subdivision parcels, most properties can accommodate a single family home and guest quarters, whether it’s 1 acre or 100 acres. Further, splitting land can challenging and oftentimes impossible. Teton County’s land development code does not provide opportunities for additional dwelling units without specific and rare zoning considerations. While size can definitely have an impact on value, it needs to be significant enough to the point that it may no longer be comparable with another property. These limitations on smaller parcels could include room for livestock, limitations on building a barn, or providing ample space for a detached guest house.

Shared Wells, Are They Legal In Idaho?

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I’m going to call this a “read at your own risk” article based on limited knowledge of the subject, but I also feel the need to provide the data as it is so much different than what we have historically understood. The topic? Shared Wells.

Historically, multiple property owners have (or maybe thought they had) the ability to share one well with multiple homes. There is/was always a limit as to the number of homes which the Department of Environmental Quality would be involved for water monitoring. A separate entity that controls water in the State of Idaho, The Idaho Department of Water Resources (IDWR) position on shared wells was that most of the water would be returned to the aquifer, and a shared well between multiple homes was really no different than each home having an individual well as long as the usage did not exceed the state’s limitation for water usage for domestic water for each parcel without water rights, 13,000 gallons per day including up to 1/2 acre of landscaping.

Recently, however, an amended Snake River Basin moratorium for issuance of new water rights has created some challenges when it comes to shared well systems. A byproduct was (I assume inadvertently) prohibiting new water rights for shared wells. Since one parcel would be sharing a well with other unrelated parcels, legally, that apparently requires an additional water right with minimum CFS (Cubic Feet per Second) or diversion rate requirement to provide sufficient water to the additional homes. Since new water rights are not being issued, technically, in order to legally have a shared well, these owners would need to find an additional groundwater right that meets the CFS requirements or find a way to mitigate water from other areas, essentially by drying up other acreage.

Historically, many communities and municipalities have been able to share wells, but that would require municipal or domestic water rights. Since water rights are so valuable in Idaho, new developments with shared well systems that are not a part of an existing system or municipal system may become challenging, and that unfortunately trickles down to small systems including one to three homes sharing wells for the purpose of efficiency.

Stay tuned on this topic and (of course) do your own research on this contentious matter.

My data and source for this article was my interpretation of a conversation with an employee at the Idaho Department of Water Resources on September 20th, 2023.

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