Teton Realty Blog

Teton Region Real Estate Market Stats, Articles & News

Where are we relative to 2007?

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Being a real estate agent and a small-time real estate investor, not only do I closely watch localized trends, but also pay attention to National trends. I pay attention to articles about things that can impact the housing market, and I try to interpret how they will trickle down to my local market. Lately I have began seeing comparisons of home prices at the peak of our last boom compared to now, as an analytical point to understand where we are in our “expansion” cycle.

The general consensus of these articles is that we are on par with home prices in 2007. However, there are a couple of sticking points with this train of thought in my opinion.

First, this does not take inflation into account. While it has only been 10 years; with an average inflation rate of about 2.25% over the past 10 years, current prices are (arguably) about 21.75% higher than prices in 2007 according to the Bureau of Labor Statistics Consumer Price Index. I would interpret that to mean that a $100,000 home in 2007 would be $122,000 today not considering other Market factors, which these other analyses are also not considering. All things being equal, this should mean that prices are about 22% less today than they were in 2007, (assuming actual dollar amounts are similar) and that’s a big number.

Second, it does not consider difference in interest rates. Speaking in generalities, 30 year rates are about a full point less today than they were in 2007. While 1% doesn’t seem like much, if you take an average sales price of around $350,000, that can equate to $3,500 is a year in interest at the beginning stages of a loan. That’s almost $300 a month.

Third, if history repeats itself, that would indicate that we are about halfway through our expansion cycle, not at the end of the supply cycle. Based on local indicators, this would seemed accurate. Supply is still low, construction is underway. Usually the phase that follows expansion is high supply or oversupply. While construction costs seem to be keeping construction rates at bay, it wouldn’t be far-fetched to believe that things could pick up substantially and create an oversupply in two years’ time. if we aren’t careful.

In short, I truly believe that while we will experience a housing adjustment in the future, (not necessarily the near future) but also that it will not be as deep or have as much impact as the historic, most recent recession. I also believe that a recession will be followed by a period of expansion, and the thought process will repeat itself time and again as it has in the past. Until then, I’ll continue to read articles about National trends and take them with a grain of salt, then come to my own conclusions based on facts, data, historic data and my own experience despite how accurate or inaccurate they may be.

Teton County Zoning, what you need to know

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Oftentimes I receive questions from prospective buyers, (sometimes sellers) as to what they can do with their property, or perhaps how they can advertise their property. When it comes to the city municipalities, they have their own set of zoning regulations and Zoning Maps such as the cities of Driggs and Victor. Each Zone has its own set of code requirements, and you can navigate this information relatively easy on each city’s respective website. The cities, however, take up a very small portion of the usable land in Teton County. The vast majority of private land is in the county itself.

At first glance, the county has only a few zones when compared with Driggs or Victor. In a nutshell, these are agriculture, commercial, manufacturing, public lands and the city areas of impact. Of this acreage, only a very small amount of the county contains commercial or manufacturing zoning, the vast majority is agriculture, with 2.5 to 20 acre density requirements. As long as there isn’t anything abnormal going on, you can subdivide acreage through the formal subdivision process in these areas as long as the finished product meets the density requirement in that zone. Each parcel can then have a house and a guest house, as well as a well and septic system, assuming it meets Department of Health requirements. Each parcel can water up to 1/2 acre per Idaho’s water regulations.
So, the question is, and the point of this article, can you do anything on your agricultural zoned property other than a single family residence with guest house (or of course agriculture)?
The answer is yes, as long as you conform to the land use requirements in the county. In a sense, the name of the zoning is a bit deceiving. It leads most to believe that only agriculture is allowed, and some even question the ability to have a home. Since we talked about that above, let’s talk about some of the other allowed, or allowable uses.
The County’s existing land use regulations are split into three categories. They are:
  • Permitted by Right
  • Permitted with Conditions
  • Permitted with Conditional Use
In a nutshell, if you are trying to do something that is permitted by right, you don’t have to ask in most cases. If it is permitted with conditions, obviously you need to make sure that the conditions are met, and the same rules apply. If it is permitted with a conditional-use permit, there are special requirements that vary based on the nature of whatever it is you are trying to do. Some interesting ones; a home daycare is permitted for up to 6 children, and 7 to 10 children is permitted with conditions. An aviation field is permitted in agricultural zones with a conditional-use permit. A church, or place of worship can be permitted with a conditional-use permit. The list goes on.
Many sectors of retail, manufacturing, and even some residential types are still limited to commercially zoned areas such as convenience stores, bakeries, bars, beauty shops, golf courses, grocery stores, hotels, restaurants – you get the idea. In a way this makes sense, and most of these services would make more sense located within city limits anyway.
You can find the County’s land use Matrix table beginning on page 29 of title 8 of the Teton Valley code, zoning regulations. That link is below.
Teton Valley Code (see Chapter 8)

Fire Ponds and subdivision compliance

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While it may not seem like a big topic to someone in the community not involved with real estate, fire suppression compliance, (or the lack thereof) has recently been a big topic for those in the real estate community.
If you’re familiar with many of the communities in Teton County, you might have noticed that most of the newer communities have beautiful ponds. While these ponds are aesthetically pleasing to most, it wasn’t because the developer was looking to improve the quality of the subdivision, it was usually a result of the requirement for a fire water storage system. Most developers installed these systems, sold out the lots in the community, and moved on. These communities formed homeowners associations for road maintenance and other aspects of neighborhood duties, but many were not privy on the requirement to have these systems tested annually.
The fact that they systems weren’t tested went largely unnoticed for several years due to the slow period of construction. Now that construction is picking up, those filing for building permits are in some cases being told that these systems must be tested for compliance prior to issuance of a permit. Overzealous real estate agents also have a tend to research issues on behalf of customers which sheds some light on these issues now that we are seeing more and more building sites selling per year.
I communicated with Teton County Fire Chief Earle Giles who reports that about 20% of Teton Valley’s subdivisions are out of compliance. Fortunately, it’s a relatively easy process for most homeowners associations to have their systems tested. These ponds are usually accompanied by a nearby hydrant which an engineer or a pump technician can connect to and test the flow which is measured in gallons per minute, or GPM. Earle was also kind enough to provide a couple of contacts for testing, and most of these contractors will be happy to put you on an annual test program to keep things in accordance. It’s affordable, and helps retain values when it’s time to sell!

-Grant Durtstchi – 208-705-7200

-AW Engineering – 208-787-2952

-Wilder System Solutions – 208-456-2287

December ’17 & Year-End Market Stats

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 Residential Summary:

If you’ve been keeping an eye on market reports and property sales throughout Teton Valley in 2017 when compared with the year prior, you’ll notice that sale prices are on the upswing, the median home price has increased, and the total volume has also increased. This is all great news for our local real estate market, but what are the driving factors?

One statistic that is hard to attain is: How many of these sales are resales that occurred over the last 10 years, or prior to the last market boom? Unfortunately the only way to obtain this information is to look at the history of each listing provided by the Teton Board of Realtors. Most of this is accurate, and a quick run through every residential sale in 2017 shows that approximately 40% of all sales that occurred had also sold within the last decade. That means that all of these sales, likely, were for a profit.
This information would indicate that our market inventory might be less than what we think. If the majority of the resale inventory is behind us, and spec home construction remains slow, we should anticipate much lower supply in the coming year unless something changes. As I’ve mentioned in previous articles, spec home supply is directly tied to construction costs which we know are currently high.
If the supply of residential inventory remains low, the residential market must climb to meet the rising cost of construction. If this occurs, we should anticipate list prices, and presumably sales prices to continue to rise over the coming year.
Building Site Summary:

Building site sale volume has steadily increase since 2012. Total volume for 2012 including Alta Wyoming totaled 89 sales. 2013 increased to 114 sales, 2015 again increased to 206 sales, 2016 increased to 222 sales, and 214 sales occurred in 2017.

2017 saw an average sale price increase from $82,692 in 2016 to $92,980.
The median sales price in 2016 was $66,292 and the median sales price in 2017 was $65,417.

The statistics over the last 2 years would indicate that buyers tend to be opening their wallets for more expensive parcels with an 11% increase in the average sales price. The median sales price along with the number of lots sold over the past two years would indicate that parcels seem to be selling at the same rate, and approximately the same price.

As with 2017, we have determined that the number of sales was 214. If we divide that by 12 months in a year, we come up with 17.83 sales per month. If we divide this by the number of current listings which is 518, we have 29 months worth of listings currently on the market. This is far fewer than projected numbers provided by professionals throughout the market recession. It is, however, anticipated that the number of new listings will meet the approximate number of parcels currently being absorbed into the marketplace as the number of active listings has been similar over the past several years.

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