Teton Realty Blog

Teton Region Real Estate Market Stats, Articles & News

Election Volatility (2024 Edition)

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Back in 2016, I wrote an article about what the election might mean for your real estate. After reviewing some interesting articles and data points, my conclusion was that real estate is much more impacted by market cycles than it is by election cycles. That being said, I did note some short-term volatility leading up to, and shortly after that election. This was true at that time, and here we are once again. In fact, the article was published at about this same time in 2016.

Having been through multiple election cycles over my years in real estate, I know this to be the case, but I was reminded of my 2016 article and talking points after receiving a market trends article written by Jordan Teicher for Zillow. As Brokers, we receive “market insider” information from the real estate giant. Despite my mixed feelings about Zillow, I still participate in advertising and follow their data points, trends and articles.

Jordan’s article dissected many common claims about reports of market volatility during election seasons and the claim that people are reluctant to move during these times. He was able to crunch some of the numbers using data from the US Census Bureau which confirmed a typical November slowdown following five of the last six presidential election years. The average month over month change during those six election cycles was -3.7% with only 2012 capturing a positive net change in the November following that election.

He went on to note that comparatively, in years without presidential elections, home sales increased an average of 0.6% between October and November. Over the past 20 years, he notes that transactions actually increased by an average of more than double all other years in December following presidential elections, “suggesting there may have been pent-up demand returning from those who were waiting to see how the election would play out.”

While none of this data may be surprising (it certainly is not to me) it does confirm what we think will continue to happen, a stabilizing market and likely an increase in sales as we move into the Winter peak season here in Teton Valley. As mentioned back in 2016, I believe the market will continue to be shaped by market supply and demand (and interest rates). 2020 threw us for a loop with diminishing supply and overwhelming demand, now with National trends pointing towards continued lack of supply with respect to housing starts. This broad dilemma and the theories behind it are further reinforced by micro factors in our own market including building costs and development challenges associated with growing pains and the continued challenges associated with a new Zoning and Land Development Code throughout Teton County.

Interested in a few associated articles? Don’t forget to check out the following links:

Driving Factors behind Interest Rates (2022)

Teton County Land Development Code

Sources:
– https://www.zillow.com/agent-resources/blog/presidential-election-housing-market/
– U.S. Census Bureau

Teton County Idaho’s FEMA Flood Map Updates

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On September 18th, 2024, I attended an open house for a special board with Teton County in conjunction with a FEMA representative for the updated project timeline for new (long-awaited) floodplain maps. Obviously, the information below is my interpretation of that presentation, so always verify information with State, Local and Federal officials.

The purpose of the open house was to review the preliminary floodplain map data released on August 15th. This data was last updated in 1988 with the limited technology at the time. An attempt was made in 2011 to update the mapping with a LIDAR flyover of the county in 2011. However, Teton County GIS coordinator Rob Marin (thanks, Rob) pointed out some deficiencies based on the year and time of year that may have inadvertently resulted in inaccurate and exaggerated flood data. This led to another recent flyover with a greater level of accuracy based on the timing, and newer technology. This new data will lead the way for a 90-day appeal process for those that can provide strong evidence that the new map data is inaccurate. For any objections, it should be noted that a letter of final determination is expected in the Fall of 2025, with final maps taking effect early 2026. The 90 day appeal process is expected to begin in February of 2025 and end in May of 2025. Comments can be provided, and forms are available on site at the Teton County courthouse and online for these appeal processes. This could be something as simple as an incorrect street name, or a more significant appeal such as a formal objection with evidence of inaccuracies. An appeal requires quite a bit of work, and as such, will require some form of significant evidence as to the inaccuracy, usually involving engineering (data based) reports. However, these scenarios will be investigated. These should be provided to Teton County who will pass the comments along to FEMA.

With that out of the way, the meeting was informative as to the new data, how it is mapped, and how it can be beneficial to Teton County. In attendance at the meeting was a representative for FEMA’s Region 10, Marshall Rivers. FEMA’s primary concern is safety, predicting flood risk and preparing for flood events. The last time the flood maps were updated was 1988, and with vast, new technology, FEMA was able to map not only flood information, but ranges of flood risk (as well as a side benefit of 2 foot contour elevations now available from the county). This program for updating the data was in collaboration with local government and the National Flood Insurance Programs (NFIP) in conjunction with FEMA. The federal government is responsible for mapping communities on a continuing basis. The state governments prioritize areas for future mapping studies, and local governments provide local insight and support. They also integrate the data into planning mechanisms and processes.

How are the maps made?

The maps are made using ground survey and LIDAR technology to identify areas of floodplain. The floodplain is generally an area that can be affected by flood or high water. LIDAR is a laser-based aerial tool with extraordinary accuracy that can sense surprisingly small objects. As mentioned above, a byproduct includes two foot contour elevations across almost the entire county. This data can be used by surveyors or land owners for planning and building purposes. There are limitations to these maps which include some uncertainties or uncontrollable circumstances such as log jambs, changing rivers or even land impacted by wildfires. In addition to LIDAR, hydrology and measuring the flow of water is a big consideration in establishing these maps. FEMA worked with Teton County to add study zones with some tasks led by FEMA, and others led by Teton County and other agencies.

Updated Zones and Associated Risks

This new data offers a more granular prediction as to certain areas and their risk levels. Two types of flood hazards were mapped. The moderate flood risk (Yellow, when viewing the map) is intended to show a 0.2% annual chance of flooding (or less impactful areas), and high flood risk which is estimated to be a 1% annual chance of flooding (or more impactful areas). In addition, Floodway (as indicated in these maps in red), indicate areas that could be most impactful, and should be avoided. I was unable to determine the county’s future role in special requirements or restrictions in these areas.

Insurance 

Just because a home is not in one of these identified rest areas, does not mean that there is no risk of flood. Conversely, if your home is removed from these flood areas with the new mapping, it doesn’t necessarily mean that you should cancel your existing flood insurance. According to FEMA, one out of four people who have a claim are not in an area mapped and identified as a high-risk flood area. If your property is added into flood zones in these amended maps, you may be contacted by your lender (and should consider risk insurance, regardless). My understanding is that your flood risk is evaluated by your lender and insurance provider. If homes are built above the base flood elevation of the risk area, this can minimize the added cost, or potentially even the requirement for insurance. You can learn more (and confirm my beliefs) at floodsmart.gov. 

Base Flood Elevation & Development This new data will provide some instant data for what used to require elevation certificates to prove the base flood elevations. Information that may have once required an engineer to evaluate may now be immediately available with the new data. You do need a floodplain development permit whether you are handling infrastructure or building a home, but FEMA does not restrict development in floodplain areas.

OLD DATA (circa 1988)

NEW DATA (as of August 15th, 2024)

Teton County Land Development Code – Wildfire Hazard Areas

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As a continuation of the review of the Teton County Land Development Code, a short, but potentially impactful section of the code may affect a property of potential interest, or perhaps your own. This section is 5-4-3, Wildfire Hazard Overlays. Like many sections of the 2022 Land Development Code (LDC), the code does cross reference a “layer” or map overlay. Below is a high level overview of the areas affected by the Wildfire Hazard Areas. The areas affected by the Wildlife Hazard Areas are mostly limited to the perimeter foothills of the Teton Valley, but do include some areas of the valley floor.

As stated in the LDC, the intent of this area is “to protect the health and safety of structures in high-risk wildfire areas”. The greatest impacts of development is the requirement that principal structures shall be located within 200 feet of the primary public roadway to provide safe and efficient access for wildfire protection. In addition, a plan for management of vegetation and defensible space is required to be submitted with site plans, and fuel breaks are to be implemented along access roads, driveways and subdivision boundaries, as well as defensible space provided around principal structures for the International Wildlife-Urban Interface Code (WUI Code). The website for the WUI code can be found here. As a side note, it is expected that ALL of Teton County may be required to conform to the WUI Code.

As with many aspects of our relatively “young” LDC (first established August 2022) these limitations can create challenges for certain properties. At the time of this writing, a few concerns might include (but may not be limited to);

  • Properties where the designated building envelope is further than 200 feet from the public roadway
  • Properties where the most suitable building site (for reasons other than fire hazard) is further than the public roadway
  • Large acreages within 200 feet of a public roadway
  • New subdivision along public roadways

As a final note, the LDC does specifically state “public roadway” when referencing the 200′ distance requirement. As a result, I do expect further discussion at the county level to better define roadways and mitigation requirements for properties that are further than 200′ from public roadways in and of themselves.

Similar to other overlays and code requirements, it is recommended that potential Buyers and Land Owners review ALL aspects of the local codes and ordinances. In the instance of the Wildfire Hazard Overlays, it is recommended that contact is made to a Teton County, Idaho Planning or Building representative to understand current requirements, interpretations and future amendments.

*Wildfire Hazard Overlays as of September 11th, 2024.

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.

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