Teton Realty Blog

Teton Region Real Estate Market Stats, Articles & News

Beware of Unsolicited Offers!

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Generally speaking, it’s no secret that Teton Valley’s real estate market is booming. In times like these, those looking to capitalize or at least get their foot in the door are out in droves doing what they can to get a deal. I have noticed a significant increase in “letters of intent” to purchase real estate, cold calls, and other forms of communication from those I described above.

Some of these are pretty easy to pick out, and most have a general understanding of their property’s value to recognize that these are borderline scam prices. However, in times like this, the market values change very quickly. While I have seen some laughable offers, I have also seen a few that appear pretty enticing on the surface. However, it’s important to remember that these people are contacting you for a reason. The market is strong, and it is almost an assurance that a good agent can help you sell your property, quickly. With that said, there is no advantage to considering a one-off offer in almost any event. Some exceptions might include neighbors offering to buy real estate, knowing that neighbors are usually the most motivated buyers in the marketplace.

I always joke about “scumbag” realtors, but the truth is, our region has some of the most responsible, well intended, and market educated professionals that I have seen in the industry. There’s always an exception, but I suspect that there is concern that trying to communicate with a real estate agent or obtain a fair opinion of value without being pressured to list your property can be challenging, but that’s really not the case. Most agents or local market professionals offer a quick, no frills opinion of value at no cost and with no strings attached. We do these valuations all the time for customers trying to understand tax rates, situations with family members, and so forth. If you’re really looking for a non-biased opinion, even paying an appraiser to give you a market value could save you significantly if you are considering an unsolicited offer from an individual. These offers come in many forms, but they will usually come in the mail. However, phone calls, emails, or even door to door solicitations should be expected.

What You Need to Know About Buying Land!

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Though the market has changed throughout my career, the same questions always seem to come up. Here are a list of common Questions and Answers:

Q: Is there a time frame in which I need to build?

A: The short answer is, not that I’m aware of. I have seen special circumstances, however. For example, in the unlikely chance that a homeowners association might allow someone to build a guest house before a main house, they might require a home to be constructed within a certain time frame. The valley has a pretty poor track record of actually following through with these types of agreements, and most homeowners associations have caught on.

Q: Do I need to do anything with the land such as maintain it?

A: In general, not much. Most subdivisions have an active homeowners association. The HOA will typically take care of the road maintenance, fire pond testing, and other similar maintenance requirements and tasks. The most common exception is with respect to noxious weeds. While many developments have an agreement with a farmer for the open space or unused areas of the development, some do not. If you receive notice from the county, you may be required to hire a company to spray the weeds such as musk thistle. Even if you don’t, they will, and can assess your tax bill. Fortunately, the cost of weed spraying is usually pretty affordable.

Q: What are the holding costs like?

A: Here again, usually, pretty affordable. There are two primary categories of expense including property taxes and homeowners association dues with the occasional special assessment or local improvement district (LID) fee. The first two are fairly common and obviously vary depending on the location and amount of amenities within the subdivision. Fortunately, most websites (including ours) display property taxes and HOA dues on the listing detail page. Some properties take advantage of an agriculture tax rate in the event the property is being used for ag purposes (and is over 5 acres), in which case the taxes can be extremely negligible. Other fees such as the aforementioned special assessment, LID or other fees are rare, but can come about for road maintenance, utility improvements or other projects usually related to infrastructure.

Q: What can I do with the property before I build?

A: This depends, but the biggest determining factor is whether or not the property is in a subdivision with covenants and restrictions. A big one that comes up is whether or not you can camp on your property. While some associations may allow it, I would think it should be generally assumed that they do not. For properties outside of a subdivision there are still some regulations. I have written several articles that can be found on my blog website related to what you can do with your property, what it’s like to be part of a homeowner’s association in the area, and more.

Q: Tiny Homes, Rentals, Campers?

A: Here again, the subdivision layer is the first step to research. Most subdivisions have a home size requirement in the range of 1,800 square feet, but I have seen them as small as 0 to 600 SqFt and is large as 2,600 SqFt. HOAs can also restrict short-term rentals via the covenants and restrictions. Though the county’s position is subject to change, smaller homes are generally allowed so long as they are permitted and built in accordance with the current building codes. RVs and campers are always a contentious subject, so make sure to follow up with the county or city on that one. To summarize, It’s always a good idea to find a real estate professional that understands the local market. I’ve heard a number of stories about Buyers that didn’t have the resources, tools or professional insight to make an informed purchase and later discovered that the property or the rights associated with the property were not what was expected. We’ve been selling real estate for a long time in the area and have great resources available to our customers when it comes to information about developments, requirements and subdivision documents and would love to help!

Real Estate themes of 2020

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As you might imagine, the common real estate theme for 2020 was the craze of city dwellers looking for a rural escape. 2020 was one of the busiest years on record (if not history) when it came to sales volume, velocity and dollar volume. We didn’t quite hit 700 land sales in Teton Valley and Alta, but it was darn close. That’s a far cry from 281 land sales in 2019. Residential sales likely would have been the same had there been the inventory to promote those sales.

Aside from the market itself, I didn’t hear as much in terms of tiny homes, which I would have easily identified as the “theme” for 2019 and the years leading up to 2019. Interestingly, there wasn’t much talk of tiny homes in 2007 either, the last memorable real estate boom. In fact, most people were going big as opposed to building small.

I did hear quite a bit about was vacation rentals. While I believe many of the land sales were simply the usual group that wants to own a piece of Teton Valley, many did ask about the viability of renting in the areas they shopped. This isn’t all that uncommon though. The year started out with what I described, those looking to transition to the area permanently which led to a number of questions related to the school system, hospitals, internet speeds – everyday life in Teton Valley. The last half of the year is where I noticed an influx of second homeowners. Much like those seeing the window close on their opportunity to own a piece of land, it seemed others had a similar feeling when it came to purchasing a home. To justify the increasing costs, and to capitalize on income to offset the cost of ownership, I had quite a few discussions about vacation rentals.

I’ve written articles in the past about short-term rental restriction, mostly a power that only homeowners associations possess. With such a variety of owners and investors in each development, it may become challenging to amend subdivision documents to restrict short-term rentals, but I can foresee that becoming a topic in the years to follow.

2021 will surely be an interesting year in real estate. Most builders are booked out one to two years, and rising construction and material costs haven’t seemed to subside. If the majority of current construction is custom work for individual homeowners, inventory will likely remain low. Property owners that have been waiting in the wings may identify 2021 as the time to sell, if the inventory remains low. I am personally interested to see how National trends and factors impact the market, interest rates and the overall economy can have substantial influence as well. Regardless, I’m looking forward to “normal”, whatever that is.

2020 Real Estate Market Report & Past Predictions

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# 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.

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