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.

Building Envelopes: How Protected is Your View?

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I had previously written an article about different ways one can achieve view preservation when it comes to a home site, particularly when adjacent properties have yet to be constructed. You can reference that article here, but I wanted to take a deeper dive into the nuance of building envelopes in this article.

Unfortunately, there are very few things in real estate that are absolute. As an example, one might build with an expectation that the Teton County is height limitation is 30 ft. While this is unlikely to change, there are provisions in the land development code that provide for agricultural buildings up to 60 ft. To be fair, however, it’s extremely unlikely that a subdivision might allow an agricultural building to be erected, and I haven’t seen a new grain elevator in Teton Valley in many decades. My point is that each of these different aspects of consideration have unlikely scenarios where they may be subject to change. Obviously, the best way to preserve a view is on your own property, but that’s not always attainable or realistic.

So, what is a building envelope? Building envelopes are areas on subdivision plat maps or even written into deeds (typically in the form of a deed restriction) designating an area where a home is designed to be built. These envelopes are typically strategically placed within the confines of subdivision boundaries so that everyone in that particular community is able to maintain a view. This makes perfect sense, has very few downsides, and provided original developers a way to add value to all of their lots without taking away from others based on the view corridor.

Over the years, I have considered building envelopes to be one of the gold standards in preserving views, right up there with platted community open space or even elbow room on your own building site. However, a few instances over the years have caused me to “downgrade” my outlook on building envelopes as a near ironclad way of preserving views. Before I move into a few examples, I would like to admit that these circumstances have been incredibly rare, but they have raised my level of concern as to how they were handled by both local government and their respective homeowners associations. Interestingly, I discovered that in almost all of these circumstances, the local government’s outlook on insignificant plat map changes (in this case moving internal building envelopes as opposed to shifting actual boundary lines) was that only a representative of the homeowners association was required to sign off as opposed to others in the community, and particularly, those impacted by the change from a view perspective. I have brought this to the attention of our local planning departments, so who knows, maybe we’ll see some consideration on the topic in the future. Back to those examples where I have seen building envelopes moved…

1) Wetland: I have seen two circumstances where a building envelope was moved as it was originally placed in a problematic wetland area. Essentially the developer identified a building envelope that was conducive to view preservation, but not necessarily taking wetland or terrain features into consideration. Additionally, it is possible that regulations around setbacks from wetland or other terrain features could (or have) change(d). When purchasing property in an area with significant slope, wetland, topographical features that might prevent construction, floodplain, waterways or otherwise, it might be a good idea not only to look at your own property in terms of the viability of constructing in a desired area or building envelope, but the adjacent properties in your view shed. 

2) Ignorance: Another circumstance included a landowner that either did not understand the building envelopes, or deliberately chose to build outside of their designated building envelope. While this did involve a fine, a slap on the wrist, and the requirement to retroactively move the building permit, the workaround to move the building envelope did not take into consideration the neighbor’s view. In subdivisions where associations aren’t established, activity is not monitored, or very few homes (or no homes) have been constructed, it might be worth considering staying involved with your association to protect your own interests, or at least keeping a close eye on activity.

3) HOA: Other circumstances I have witnessed over the years included homeowners associations removing, or modifying building envelopes at the discretion of some, but without consideration for others. While these decisions may have had reasonable intentions, they also had implications, whether those were considered or not. Here again, homeowners associations currently only require administrative authorization, and the local planning departments often do not require public notice for these “insignificant” changes. Once again, community involvement (as challenging as volunteer HOA work can be) can go a long ways, particularly in circumstances where these types of changes could have a significant impact on you, or your neighbor’s values.  To conclude, I’ll reiterate that these instances are rare, and obviously, there could be other examples that could have an impact on the need, or desire to move these envelopes. They could be unforeseen soil conditions, land development code changes with respect to setbacks which may have originally had more liberal requirements, or other unforeseen situations. While it’s unlikely to impact more than a handful of sites throughout the entire valley with these types of building envelope changes, it’s at least worth considering how it might affect you if things were to change.

View Protection, What Are My Options?

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If you have spent any time looking at or shopping for real estate in the Teton Valley, one phrase you will frequently come across will likely have something to do with protected views. Just like any claim in a real estate listing, information may be reliable, but is not guaranteed. In our increasingly litigious world, I have become increasingly reluctant to say anything is guaranteed, or even make similar claims. With that said, how are views best protected?

For the purpose of the article, I’m going to focus on the Tetons. This is obviously the most sought after (but in my humble opinion is not always the best) view opportunity that Teton Valley has to offer. Almost all real estate agents in the area reference the Teton view corridor, and we even have a filter on our website for properties that might feature a Teton view. I wrote an article in the last few months referenced here that also sheds some light on view corridors with respect to lot sizes. The gist was, bigger is not always better. Here are some things to look into when it comes to that protected view:

1) Roads
Roads in many cases can offer the best view protection available. Trees don’t grow in roads, homes aren’t built in roads, and they are usually owned by an entity that is difficult to modify such as a State or County jurisdiction or even a homeowners association. Orienting a home site with a road running laterally towards the Tetons is an excellent way to protect your investment. This opportunity is often overlooked and can be used to your advantage with only slight adjustments to site planning.

2) CC&Rs
A subdivision’s covenants, conditions and restrictions often spell out view preservation either vaguely, or expressly. There are a few subdivisions that even explicitly state that homes or landscaping simply cannot block the view of another. This sets the stage for a first come, first served method of building out a subdivision, and it seems to work well. It is important to understand that CC&Rs can be modified, but usually it requires at least a majority of the subdivision to agree, which in many cases can be nearly impossible to achieve – even if it’s a topic that everyone agrees with.

3) Lot Lines
Lot lines are also a great way to protect views. Teton County and the cities therein almost always have some form of building setback requirements. Here again, while it may not be a guarantee that a plat map cannot or will not change, it is a difficult process. Aligning a home with a view corridor down a lot line with a trajectory towards the Tetons is a great way to build in additional insurances of view preservation. In fact, you will often notice developments that are designed accordingly. Keep in mind that setbacks don’t always prevent one from planting trees in that setback.

4) Building Envelopes
Building envelopes are areas designated within property boundaries, usually for the sole purpose of view preservation. In years past, this is something I would have given close to a guarantee for view preservation. While I know and understand that building envelopes can change, I recently experienced a situation in Teton County where a building envelope was moved at the County’s authority based on wetland encroaching on the original envelope. The move was done unilaterally by the association (only requiring signature of the HOA President) as a result of the County’s concern with respect to the wetland, but it did not appear that views (particularly for the adjacent parcels) were any part of that consideration. Understanding County overlays such as wildlife, wetland or floodplain can help one understand the likelihood of this being changed for any purpose other than views.

5) Topography and Height Limitations
If a site is staged on a rolling hill, one can generally benefit from the added view preservation especially considering County height limitations. Most of the designated height limitations within the County are limited to 30 ft, and in some events lower based on association rules and County overlays such as scenic corridor overlays along State Highways and Ski Hill Road. In that same thread, it’s important to look into specific height limitations for those reasons, but also look at nearby agricultural or industrial property. While unusual, there are circumstances where variances can be granted for agricultural or industrial purposes which can be 60 ft or even higher. A grain elevator is a good example of this.

6) Existing Homes
Planning your project around existing structures is a great way to preserve views. We don’t often see significant changes to structures, and in-line with my last point, height limitations are also unlikely to change. It is however important to remember that auxiliary structures can be built in a later date, trees can be planted, and trees (albeit slowly in our high desert climate) grow.

6) Trust?
My question mark wasn’t a type error, because it’s hard to buy something in a view corridor without any guarantee. However, there are many circumstances with building sites where homeowners naturally stagger their homes and associated outbuildings or landscaping for the purpose of preserving views for those sharing the same view corridor. While it’s difficult to rely entirely on someone being reasonable, one must also understand that the Tetons are not the only mountain peaks worth looking at in the Teton Valley. The Big Hole Range, opposite the Tetons, are known for extraordinary sunsets and offer some of the best mountain views Teton Valley has to offer. As builders, investors and locals navigate site planning, it’s hard to ignore the fact that blocking someone’s view to the East, inherently blocks their own view back to the West. After all, who wants to look directly in somebody’s living room instead of the foothills of the Big Hole Range? We oftentimes worry too much about view preservation with this consideration in mind, but with today’s real estate prices, it’s also easy to understand why.

Even though we don’t make guarantees, our experience and understanding of these markets and our valley can be instrumental when it comes to site planning and understanding what you’re buying. Use the resource of our local agents. I have said it before, and I’ll repeat it here again now, Teton Valley is home to some of the most professional group of advocates for your investment that I have met in all of my dealings in real estate across the country. Use that knowledge to your advantage!

Wetlands, Simplified

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In a previous post, I provided an overview based on my experience working with a local wetland consultant when it came to wetland. Recently, when clarifying some county regulations directly with the Army Corps of Engineers, I was able to get some additional generalized data that may help provide a simplified overview of wetlands; when a delineation is required, and restrictions to consider. The long version of this article is probably better for those looking for an understanding as to what wetland is and how it is identified. The purpose of this article is to provide a guideline for those looking to understand regulations. As always, this information is subject to change, particularly with the changing landscape at the local government level. In addition, this is my own interpretation of my discussion with the Army Corps office, an obviously there are likely some third party communication statements in here. In short, verifying information across all fronts is always advised.

As mentioned in my prior article, wetland is generally identified by soil composition, vegetation, and the presence of water. In the absence of indicative vegetation or soils, a basic guideline is the presence (or lack thereof) wetland can be indicated by water within 18 in of the surface for at least two consecutive weeks out of the growing season. According to the Army Corps representative I spoke to, the growing season can depend on the year, but usually runs from April through mid-July.

Currently, Teton County’s position with respect to wetland is that one can obtain a building permit without specific wetland research such as a wetland delineation if they are at least 100 ft from the current hydrography boundary as provided by the county. Keep in mind that this boundary does not necessarily indicate wetland, but rather the county’s interpretation of wetland based on the data they are using.

If one desires to build closer than 100 ft estimated boundary, this is usually when the Army Corps takes a role. Historically the Army Corps has provided consultation as to whether or not a delineation (a study to determine the actual boundary of wetlands), however, both the county and the Army Corps has begun to move towards requiring delineations as opposed to providing findings based only on consultation.

Once a delineation is completed, and a boundary of wetland has been defined, Teton County shifts their 100 ft required buffer from the estimated boundary to 50 ft from the actual boundary of wetland. Whether or not this remains the regulation for years to come at the county level is yet to be determined, but for all intents and purposes, this is the current guideline.

Not all properties will have a wetland boundary and in other words, may be entirely consisting of wetland. Alternatively, an area of upland may be entirely surrounded by wetland. In these events, the Army Corp’s position would likely prefer crossing wetland to reach the area of upland. In the event of no upland, a general rule is that up to 1/10 of an acre may be set aside without mitigation.

In the event that 1/10 of an acre on any given property entirely identified as wetland is not conducive for a project, mitigation can often be required. This usually consists of designing a project to replace the wetland implicated by the project. This might occur on the subject property, or on another property.

For those interested in purchasing properties with indicated wetlands, providing ample time to gather appropriate information can be important, as well as making sure to set aside the time needed to perform the research including the possible delineation work prior to commencing with any project. Special circumstances may apply. As an example, a property impacted by flood irrigation that may not otherwise be considered wetland could take one, or even 2 years to dry the property to its natural state and prove that it is not in fact upland but rather indicators of wetland were present as a result of irrigation water, as opposed to wetland habitat. These specific timelines including research during a growing season or a multi-season review can make negotiating on real estate challenging. It is often unrealistic to ask for inspection timeframes with ample time to complete these studies. As a result, many consumers need to take a calculated risk approach based on the information available.

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