Summary: Jackson Hole Real Estate & 2020 Forecast
Real Estate Sales in Jackson Hole – Past 5 years
We all remember 2018 in the Jackson Hole real estate market, right? An explosive year where everything was up, way up! Transactions increased 13%, while overall sales volume jumped a staggering 38%, and the average sale price was up 22%. What a year! Could it continue? Surely this level of appreciation wasn’t sustainable? Many predicted a recession, or a the very least a stabilization after such a wild year. Well, the 2019 market in Jackson Hole did slow down, but just a bit. While not a significant correction like many were hoping / predicting, the numbers show that 2018 was most likely a “peak” year. With a similar level of sales in 2019, dollar volume decreased 6% and the average sale price dropped 4.5%. The median sale price increased, recording its highest mark in the last 5 years but that is more likely an indication of the “Virginian Village effect” (see sales section above) then a result of increasing sale prices. New this year, I analyzed properties that sold at or above their listing prices, which can help us understand overall demand, as these sales are usually a result of multiple and/or quick offers. In each year since 2016, more and more properties have sold at or above the asking price, peaking in 2018 at 114 property sales (nearly 1 in every 4 sales!). In 2019, with a similar level of overall sales, 87 properties sold at or above their listing price (or roughly 1 in every 6 properties). While not a drastic change, this is another indicator of demand slowing down from the highs of 2018.
Inventory Trends – Past 5 years
After peaking in 2015 (739 new listings), the amount of new inventory entering the market constricted in 2016, down 16% percent. New listing levels have been increasing year-over-year since 2017, recently up 10% from 2018 to 2019 (696 new listings) – marking the most significant increase in over 5 years. After seeing what the market did in 2018, sellers may have wanted to take advantage and cash out, listing their property for sale in 2019. When more inventory (supply) enters the market, this can put downward pressure on pricing, perhaps explaining the slight decline in both sales volume and average sales prices in 2019. Obviously this isn’t true for the entire market, as certain pockets (Town under $1.3 million for example) continue to see high demand (and increasing prices). However, even though there were more listings in 2019, we saw the same amount of sales as 2018 (with fewer new listings), perhaps as some potential buyers sat on the sidelines waiting for a larger market correction.
After a exceptionally strong 2018, I predicted that the unprecedented rate of market acceleration could not continue (see my 2019 forecast). After seeing things slow a bit in 2019, what will 2020 bring? Will things continue to slow or plateau like 2019 or will high demand for Jackson Hole properties once again push pricing upward?
Talks of a pending recession still abound, but will it happen in Jackson? It seems unlikely. Jackson Hole remains a highly desirable place to live for year round families and second homeowners alike. As more and more people can work remotely, many want to make living the dream in Jackson Hole a reality. That will probably never change. As people continue to move here, they will continue to compete for properties with the local buyers. Unfortunately, this can lead to the local working people getting squeezed – beaten out by cash offers and buyers willing to pay over market value to get their spot in Jackson Hole. I predict it getting continually harder and harder for local buyers to enter the market, and increasingly difficult to move up in the market (without taking on a higher mortgage in the process).
There is always uncertainty with an election year. Add to that global trade talks and impeachment hearings and many people are holding their breath and watching the market closely. That being said, many investors are cash heavy, waiting for any recession induced opportunities, suggesting that any slight down turn will be immediately buoyed by an increase in demand.
In a unique market like Jackson Hole, where the supply of land is permanently limited due to publicly held land and conservation easements, it’s hard to imagine we will see enough new supply (or a decrease in demand) to result in any significant downtown. Happy 2020!
Advice for Sellers in 2020:
Know how your property’s “micro-market”. Certain segments of the market are seeing different levels of demand. Be familiar with recent comps, but even more importantly, current inventory / competition in your segment.
Be prepared for multiple or quick offers in certain segments. Think about what terms are most important to you. Focus on buyer’s enthusiasm and ability to preform.
Prepare your home for sale: de-clutter, clean up, work on deferred maintenance items, etc. Move in ready and remodeled properties are receiving the most attention. Discuss which (if any) updates will produce a higher return.
Advice for Buyers in 2020:
Know and follow the market. What are the recent comps? How are current inventory levels? What types of properties are selling quickly?
Recognize a good/fair deal and be ready to act quickly as inventory in certain segments remains low. Know that there are many buyers for the same property. How will you position yourself to be the best candidate in a multiple offer situation?
If you need to sell to buy, prepare your home now so that you will be ready to list as soon as you find the right property. Be prepared for things to move quickly when that happens.