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2021 Land Year End Sales Report

December 19, 2021 By Tayson Rockefeller Leave a Comment

It’s that time of year again and it’s always fun to see the data. A friend suggested I prepare this in a graph style format. Naturally, I researched data from 2006 to date. For those of you reading the article as opposed to my blog or newsletter, you can probably already picture the trajectory of that graph from a high point in 2007, a low point in 2009, stagnation from 2010 to 2014, slow but increasing improvement to 2019, followed by a sharp increase in 2020. Here are my takeaways;

2008: There were 102 sales in 2008 compared to only 55 sales in 2009. Interestingly, things fell off later in the year, seeming to lag behind the rest of the Nation’s real estate trends.

2009-2012: The official recession had long been over by 2012, though land hadn’t seen much improvement in terms of the number of sales or the average sales prices during this time. These are the years with opportunities we likely won’t ever see again. I don’t attribute all of 2020’s massive gains to the usual pandemic related craze, I have always believed that land was too cheap for too long in the area.

2013-2018: This was the slow recovery stage I mentioned. It’s almost silly to think that any portion of the real estate market was still recovering this long after economic decline, but still, land prices were far cheaper than large tract land acquisition and development costs. As a result, inventory dwindled despite a huge oversupply that was attributed to the long-lasting “bargain” period.

Q1 2019 vs Q1 2020: In order to get a bit more quantifiable data I actually ran this report December 1st through March 1st (I didn’t want the pandemic in March of ’20 to impact this observation) and found that 2019 saw 37 sales with an average sales price of $188,896. One sale during that time at $3m had a big impact on that average, the median sales price was $72,000. 2020 saw 52 sales with an average of $73,064 and a median sales price of $59,000. I found it interesting that the number of sales for that quarter increased in 2020 but the median sales price decreased. For those of you looking at the graph and seeing the average sales price dip in 2020, this is likely due to the large aforementioned $3 million dollar sale that boosted that average just prior. With both land and residential the opportunity for a bargain post-pandemic before the real estate market took off was extremely short-lived. There were a few deals to be had during that time, but not many.

2021: Most real estate agents with a close ear to the ground will tell you that they feel the land market has peaked and things have stabilized as of the time of this writing, end of 2021. When looking at the data by quarter, the median sales price was Q1: $145,000, Q2: $150,000, Q3: $175,000 and Q4: $173,500. Obviously still some growth in there (until Q4), but nothing Earth shattering like we’ve been seeing.

Final Takeaway: A final interesting point should include sales prices in 2007 versus today. Interestingly, what they were nearly 15 years ago. In addition, we’ve seen 15 years of inflation and one of the hottest real estate markets in recent history. The bottom line? I believe real estate prices are currently where they should be. Bargain? No. Overvalued and otherwise a bad deal? In my view, no.

Fall ’21 Market Update

September 27, 2021 By Tayson Rockefeller Leave a Comment

The Teton Valley real estate keeps humming along. A few sectors of the market seem to be cooling off, but nothing earth-shattering.

LAND

The second quarter of 2021 seem to be a high point in the market with 190 land sales, consistent with the huge increase in sales since the real estate craze began in 2020. Total volume was just over 42m with sales prices exceeding list prices in many cases, but averaging 91% of the asking price. Of the 190 sales, just over 10% of them were financed.

The third quarter in 2021 brought newfound inventory, likely due to our newfound average sales price for land of just under $220k in 2021 (YTD) compared with an average sales price of just over $121k in 2020, though that average increased significantly as the year came to a close. Total volume was a touch over 38m. While the average sales price is up and sales prices are holding fairly firm at just 4% under the ask, inventory is also up and the number of sales are down over the last quarter. These are indicators that the increase of supply seems to be providing a sense of relief for buyers. We’ve seen a fair share of price reductions, but this is mostly attributed towards overzealous sellers beginning to understand that the current trajectory of land prices likely isn’t sustainable. Of the 138 sales, almost 14% were financed, a bit of an increase compared with last quarter.

RESIDENTIAL

The residential market continues to exceed expectations, likely due to the low inventory of just 58 active listings at the time of this writing and a dismal 14 new construction offerings. The third quarter of 2021 saw 93 residential sales at the time of this writing with home selling on average between 1 and 2% under the ask, with many selling above. The average sales price per square foot was $428 per square foot during this time which included land, this number is fairly consistent with the cost of construction not including land – the biggest factor when considering the lack of new inventory. Teton County reported about 38 new building permits for residential properties which included garage apartments and remodels. Builders have been turning away work with schedules booking several years in advance, but if you canceled projects because of unexpectedly high building costs have created just a few openings with custom home builders.

Roofs, Property Value and Peace of Mind

July 29, 2021 By Tayson Rockefeller Leave a Comment

A family friend reached out a few weeks back about the potential impact of a certain roofing system compared with another and how it might impact the value of their property down the line. It resonated with me as I am currently in the process of replacing the original roof on my 35-year-old home. My own experience has been somewhat tempestuous as we struggled with replacing an uncommon roof type and battling some significant damage we uncovered along the way. My home is an old family cabin that my wife and I have renovated over several years, and the old roof was an uncommon stone coated metal cold roof. We don’t have any plans to sell, so resale wasn’t on our minds. We wanted something that would blend in with the forest setting and perform well for a long period of time for the reasons mentioned above. Ultimately, we chose a very thick, shake-like asphalt shingle. We simplified the roof rakes and beefed up the Boston ridge to create a slightly more modern look, which we are happy with. In our case, we probably did increase the value of our home, and we are happy with the look of the new shingles even though we were concerned with it.

Anyway, when comparing the two roofing systems my friend was considering I didn’t feel one would significantly change the property’s value. In their case neither option would have been unusual for the home, but one was clearly more expensive. It was difficult for me to answer whether or not they would see a return on the investment for the more expensive roofing system. To answer the question, this is where I shifted focus to the overall picture. Sometimes certain home improvements, materials used or construction methods do not have a direct impact on a property’s value, but can when viewed in conjunction with the rest of the home and it’s finishes. I distinctly remember an incredible custom home of which the owner spared no change or effort throughout, but installed vinyl floors which was (honestly) just his preference. However, when helping him with the sale, it was a sticking point when comparing the finishes through the rest of the home on such a high dollar listing. Similarly, I remember walking through a property where the owner did some light renovations in anticipation of a sale. The fresh paint was great, but the Viking dishwasher felt odd to me. Yes, it was undoubtedly expensive and was certainly a talking point, but it didn’t fit well with the rest of the finishes and I don’t think that homeowner saw a return on that investment. The moral of the story, underdoing it and overdoing it are both bad, but in different ways.

Okay, if you’re still reading, on to the peace of mind part. I have probably written about this in other articles, but I wanted to touch on a few other considerations, particularly as we see new construction ticking up.

1) Snow slides. In my case, a metal roof was not an option. I have a wraparound deck that the snow would absolutely destroy in the event it were to slide off. My old roof never slid, and I hope my new roof never slides. In other cases, you want the snow to slide. Low roof pitches or shed roofs can be a good example.

2) Ventilate! I can’t think of very many circumstances where I would not recommend installing a ventilated or cold roof to help mitigate ice damming. This will usually include some form of screen or vent along the roof soffit and a vent in the gable ends or along the ridge of the home.

3) Ice Damming. Believe it or not, we get snow and ice up here. I believe code requires ice and water shield along the roof edges and valleys, but I usually suggest putting it everywhere, if you can. There are better ways to prevent ice damming as mentioned above in the ventilation section, but make sure you are protected in the areas mentioned and it never hurts to have the extra protection, particularly on roofs with a lower pitch.

4) Pitch. Speaking of pitch, be careful with this one. The modern, low sloping or flat roof systems are becoming more and more popular, but they can pose significant challenges when it comes to snow accumulation and ice damming. I’ll never forget all of the struggles I’ve had over the years with commercial building management where flat roofs with drain systems are common. The moral of that story, make sure you have heat tape in those drains, and monitor them closely. It doesn’t take long for these to plug up with ice creating a swimming pool on top of your roof.

As a final bit and disclosure, I’m a real estate agent, not a roofer. I have experience with some of these things, but am in no means an expert when it comes to the construction types and methods best for your situation. Always consult with your contractor and local roofer, and keep in mind our unique climate when it comes to architects. People tend to bring their local architect with them from dramatically different climates which can often lead to incompatibility with local contractors and issues with construction methods down the line.

Real Estate themes of 2020

January 4, 2021 By Tayson Rockefeller Leave a Comment

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.

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