In a recent blog I addressed the question “Are we there yet?” in terms of real estate making it to the bottom of its decline. In this entry I would like to discuss where we are now. It is a similar question but the answer comes from a different perspective.

To explore the answer I would first like to present something on greater real estate market trends, cycles and phases.

In phase one we see numbers of sales increasing but prices are basically flat.
This occurred in Jackson Hole from approximately ’95 to ’98 and is typical for a market where growing supply meets growing demand and other factors in purchasing are stable.

In phase two we see numbers of sales increasing, but prices increasing too. This occurred in Jackson from ’99 to ’04 and it is typical when growing demand exceeds supply. There were a few bumps in this time period for the dot com bust and the 9/11 attacks.

In phase three sales decrease but prices still increase! We saw this during ‘05 and ’06 when demand was still strong, there was very little inventory available and there was lots of wealth in the marketplace competing for the limited housing.

In phase four we see numbers of sales decreasing and prices falling. Does this sound recent and familiar? It was late ’07 through mid ’09. In its extreme it can mean market collapse and we have certainly seen large equity losses though not the Great Depression of the 1930’s.

So back to the question we started with “Where are we now?” Since spring we have seen a slow, and I mean painfully slow, increase in the number of real estate transactions but prices were still falling in the early part of the year. That was the tail end of phase four. The return to beginning of the cycle at phase one now appears to have arrived. MLS statistics show greater numbers of sales and the prices of properties seem to be stabilizing. The transactions that are closing seem to have set a market bottom. The stabilizing of prices is very important but for those sellers who have never admitted to themselves that this is now a buyers market, there may be a price decrease necessary for their listing to get it sold. The last ‘phase one’ lasted about 3 years.

To get to phase two where prices begin to rebound is normally a function of supply and demand. We have a large supply in inventory but fewer contractors around building new homes and ever tightening restrictions on development, so the high supply may not last a long time. We have certainly reduced the demand side of the equation, but there is still a growing population that needs shelter. Technology such as on line meetings, email and satellite links are allowing people to live in more remote locations like Jackson and still be productive in more traditional urban jobs. It will take time and only time will tell!

John Hanlon

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We have all been on one side or the other of that question during long car trips, remember? It seemed like it would never end! That is how this recession feels to me and many others. And this trip is on a very bumpy road with no fuel stops, rest rooms or scenic turnouts.

So, are we there yet? Let’s look at some real estate statistics for clues:
·        In August new listings out-paced sales by nearly 3.5 to 1.
·        At the current rate of selling property it will take over 55 months to sell what is listed today, but that is better than it has been. Last Feb. that number was 177 months! Property is selling over three times faster now.
·        Total inventory of homes is down 6% from the peak just over a year ago but is still large compared with historic levels. (note: those historic levels were so low that demand could not be met and contributed to the steep climb in prices)
·        Total inventory is now at 4815 units (homes, condos, vacant land, commercial) when Star Valley, Teton Valley and Pinedale area listings are included.
·        In Teton County, WY alone there are 650 listed residences.

You may notice that I focus on inventory statistics. It is simply that the supply side of the market now dictates the conditions. Since the inventory is high but nearing stability it is probable that prices are stabilizing now too. So, “Are we there yet?” If not, we are darned close.

Lending rates will likely have an impact on the market at some point. As the Feds spend huge amounts of money and finance debt selling it to investors, both foreign and domestic, inflation will set in and rates will rise. At first this may trigger a land rush to buy before rates rise too high. Then it will slow demand and we will no longer ask if we are there yet, but instead, ask if we can go back.

If you need a map, give me a call.

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Attitude is the theme for this economy. We keep hearing about consumer confidence, a measure of attitude.  Depression is a really big attitude and that is exactly what the crash in 1929 created. But this time it’s different. Consider this:

There are about 9 Trillion dollars on the sidelines awaiting a safe investment but making no real returns right now.

The government is selling bonds and printing a lot of money with a falling GDP, so inflation seems inevitable. If we have inflation then the future dollars to pay back loans later will be cheap dollars!
A sensible place to move money is hard assets such as real estate (you can’t live in or rent your stock portfolio). The population continues to grow and people have to live someplace whether they own or rent.

Buying a house now is a great deal if you have some money and/or good credit. Inventory is high, prices have fallen and credit is cheap with money at about 5% on a fixed 30 year loan. Americans are used to a much higher standard of living than in the great depression and soon may grow weary of doing more with less. Sure ‘less is the new more’ but people will still want the real more.

So what is stopping us? It is an attitude of uncertainty. We are uncertain that we have hit bottom and we are uncertain about leadership. Polled likely voters recently gave congress an approval rating of under 10 percent! Without faith in leadership we tend to become frugal, cautious and more uncertain. Locally, in Wyoming, we are less influenced by Washington and can move with somewhat more confidence. Our state economy is still strong and we can be more confident. Still, many of our local incomes are generated by outside sources so we are not immune. We need tourists to come, second home buyers to spend money in shops, restaurants, on services and recreation to fuel this economy a major source is consumers buying second homes. When will they feel confident enough to do so again? They are scared and hurt - somewhat like a person who has lost a loved one, though not so emotional. They will go through stages of recovery and some people will go through those stages faster than others. Some will never feel safe again.

As a nation we are saving more than we used to do and this trend will continue for many years. Savings help build a sense of confidence and that helps defeat uncertainty. One of our best traditional savings places is our homes. Not only do they help us save but we can live in them - unlike an account at the bank. A fixed rate home loan is a fabulous hedge against inflation too.
If you need an attitude adjustment and you want to get rid of that feeling of uncertainty, real estate is still a good option you should consider.

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When everything is up in the air, you need to catch something, bring it down to earth and create a goal you need to go for.  It is all part of the “pick yourself up, dust yourself off, and start all over again” school of thought.  Sitting on a fence, or waiting for something good to come your way is not constructive.  You are the one who must make it happen. I don’t know any other way to really get anywhere in life. Don’t wait. Just do it!

This advise works for everything worthwhile in life.  It works for getting a job. It works for finding a mate. It works for building a positive life out of the chaos. Please just try this method. Look toward your future and think about where you’d like to be in five years.  This is your dream, not anyone else’s. It is what you see when you look into your secret heart of hearts and think “This is what will make me happy.” Again, this is not what your friends or parents or teachers have told you are the right paths. It is where your special combination of hopes dreams and aptitudes will lead you. Positive thought, aimed in a healthful direction is more powerful than a laser.

It is an absolute truth that action brings results, and the thought is the engine to the deed. You must dream a little dream, or envision what you desire to set in the proper direction. To some of you, this will sound a little too touchy feely, out there, or like wishful thinking. This is precisely my point. You must have wishful thinking in order to motivate yourself and align your dreams with attainable reality.

Look around you. Evaluate your current situation. If you want to change anything, then you are the one who can affect that change. Give this process a chance, and I promise you, with a little practice and persistence your dream will prevail. You can have a better life, live in a better home, choose the most positive friends, and end negative thinking with this method of looking forward to realize your dreams.

Please keep in mind that these are my opinions and observations, and do not represent the views of Diane Nodell Real Estate, Inc.

Jane Folgeman, Associate Broker
Diane Nodell Real Estate, Inc
240 E. Deloney
Jackson, WY 83002
307 732 0303 ext 11
307 413 5263 Jane’s cell

Popularity: 6% [?]

We are frequently asked in this market if it smarter to rent than to buy. The answer varies for different individuals. Certainly if I could have sold my house 2 years ago, rented until now and buy back into the market it would look pretty good dollar-wise on paper. I would have avoided the big depreciation hit that I and most property owners have absorbed. But at this point in time I would definitely be looking to get out of my lease and back into a deeded property. The reasons are these:
Interest rates - Why rent when money is so cheap to borrow. 30 year mortgages are around 5% and at that payments are only $5.35 a month per one thousand borrowed.

Inventory of homes – We have more choices than this area has ever seen. The choices are not just more numerous either. In the last 10 years a variety of styles of architecture have invaded the valley. It is not all cedar siding and log cabins with shake roofs anymore. As of July 16, 2009 MLS for our region shows 1815 residences available. For Teton County, WY there are 640 homes.  There are plenty of lots too and contractors are bidding much lower than 2 years ago to build for you.
Price – prices are down significantly in all categories and might be nearing the bottom.
Control – you probably don’t like your landlord telling you to get rid of your pets, where to park, where you can put your grille and so on. When you own your home most of that goes away. You are the king or queen of your castle!

Savings – Your home still remains one of your best buys because you have a sort of forced savings account.

Taxes! – The interest on a home loan is a write off. You can gain up to $500,000 of value tax free (for couples or $250,000 for singles). There is also an $8,000 tax credit in place for first time homebuyers this year.

So it is a buyers market like this area has never seen before. Markets are always cyclical and this one will rebound. This is just a deeper cycle than we have had in many years.
If you ask me, this a great time to trade a lease for a deed.

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Timing is everything. We’ve heard that throughout our lives, and this call to action is even more appropriate this month.  The interest rate for first-time home buyers, today, is now back to a very comfortable low of 4.5 percent on a 30-year fixed-rate loan. This means that if you buy a house, condo or townhouse, your monthly mortgage payment today will probably be lower than what you’re paying for rent.

An example, in plain numbers, would make any first-time buyer’s heart sing. You are considered a first-time buyer if you have not owned a primary residence for the past three years or have never owned your own place. Let’s say that with the help of an experienced Realtor (who can come in very handy for skillful negotiations) you find a home to purchase for $300,000. For a conventional loan, you would have to put down 20 percent – in dollars, $60,000. Your amount borrowed would be $240,000. At 4.5 percent, you would pay $1,216.04 per month. Most of you in Teton County pay at least that amount for a two-bedroom rental.

There’s only one problem.  How are you going to find your $60,000 down payment in the first place?  O.K., don’t lose hope so easily. In rides a big tall stranger called the FHA. That is the Federal Housing Authority.  Unlike the banks, the FHA is in the business of guaranteeing loans for home buyers, and it will allow you to make a much smaller down payment than banks require.  For the qualified buyer, the FHA will allow a down payment as low as 3 percent of the total cost of the home.  Using the above example, you would need $9,000, and the FHA will guarantee the rest of the loan amount of $291,000.00.

Does this sound too good to be true? That may be true for some of you, but the first- time buyer who has great credit and two years of tax returns showing a good steady income will stand a very good chance of qualifying for such a loan. The downside is that your payment per month on such a loan would be $1,474.45.  But there is always a silver lining.  You would own your own home, have the chance to build equity, and put money in your own pocket for a change. The interest on your loan is tax-deductible to boot.

Right now, there is even greater news.  The federal government is giving a one-time-only tax incentive of up to $8,000 to first-time home buyers who close on a home purchase before December 1, 2009.  Ask your banker or accountant exactly how this works.  There are many variables, and I want you to get competent financial advice before making any monetary decisions.

Please keep in mind that these are my opinions and observations, and do not represent the views of Diane Nodell Real Estate, Inc.

Jane Folgeman, Associate Broker
Diane Nodell Real Estate, Inc
240 E. Deloney
Jackson, WY 83002
307 732 0303 ext 11
307 413 5263 Jane’s cell

Popularity: 6% [?]

So the question on everyone’s lips these days seems to be what is going on in the market and when will it end? The answer is, of course, a little uncertain. What we do know is that the winter and spring were very slow with few sales, until June, with inventories rising and prices falling. We still have fabulous interest rates and it is very much a buyer’s market.

What we can only project and forecast is what might be in our future. We believe that the interest rates will stay low or very reasonable for at least the short term, perhaps a year or more before inflation might set in, but it will be up to the Fed to control that as best they can while selling bonds at ever higher rates. We have seen a strong turn upward in June sales with properties selling for an average of around 30% less than the peak values of 20 or more months ago. As long as the inventory remains high, values will not climb. At the current pace it will take over a year to reduce the inventory to where prices are impacted upward. If interest rates climb steeply, that will suppress sales and thus prices, though a small rise in interest rates seems to get smart buyers to commit before the rates move higher.

Until recently we were faced with only negative economic market indicators. Now we see at least mixed signals and a slowing of the downward trends. Consumer savings – up; new home sales - down; existing home sales – up (you can buy for less than you can build); unemployment – up, but consumer confidence is up too. So the news is better than it was and our local sales seem to mirror that.

If you have the opportunity or need to move within the community you may have to sell low but also will have the opportunity to buy low – a horizontal move. With high inventory coupled with low demand and low interest rates, there has never been a better time to make the move.

We hear a lot about banks not lending money. There is only some truth to that. Actually the local banks are pretty healthy and will gladly lend to qualified buyers that have good credit, 20% or more down and can show income on tax returns - just like it used to be done!

So don’t be afraid of the market. Call your banker and favorite realtor for more details.

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Listings, listings and more listings. And they just keep coming every time I refresh the Hotsheet in nearly every price range and category from Town of Jackson condos less than $350,000 to your own little 248-acre piece of East Gros Ventre Butte for $35,000,000.

In Teton County, Wyoming, there are currently 845 listings for all types of property, surpassing the previous high set in October 2008. The regional Multiple Listing Service, which serves Realtors from Driggs, Idaho, to Pinedale and Star Valley, Wyoming, includes 4,336 listings. Teton County, Idaho, is buried beneath a staggering 1,659 listings.

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It’s official. The first quarter of 2009 was the worst in more than 20 years for the Teton County real estate market.

More on that below, but first the good news: April, the beginning of the second quarter, was the best month of the year for the Teton County real estate market with eight closings and 16 pending sales.
According to the Hotsheet, April sales volume totaled approximately $12,000,000 (four sale prices were unreported, so total includes 90 percent of list price for those listings), while the 12 properties still pending as of May 1 total approximately $17,000,000 (90 percent of final list prices at time of contract).
Not bad for April. Not great, but not bad. What’s driving the recent uptick in real estate activity?

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Finding some prime real estate at the base of Snow King Ski Area last weekend was a challenge as thousands of race fans filled the base area during the World Championship Snowmobile Hill Climb.

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The ice-cold Jackson real estate market has seen a bit of a thaw in recent days.

In general, the Hotsheet has not been so hot so far this year, with March definitely coming in like a lamb. There has yet to be a “pending” reported this month in all of Teton County. And after just four sales in Teton County in January followed by four sales in February (for a total sales volume for the month of barely $1,000,000!), no closings in the first week of March offered little optimism for a stronger month.

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When the highest-priced listing in Melody Ranch hit the Hotsheet twice last week - once as a “price reduction” and again as an “extension” of the original listing agreement - and the two lowest-priced homes in Melody Ranch recently went under contract, some up-to-date analysis of this normally vibrant market seemed in order.

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With all the news in the past week about government efforts to boost the sagging economy and housing markets, many people are looking for someone to help sort out the details and tell them what it means to them and for Jackson Hole.

Well, I’m reading as much as I can on the subject and gathering a variety of opinions, but that person isn’t me. Like politics, all real estate is local, and I think focusing closely on regional trends and day-to-day information is the best way to prepare for whatever future comes our way.

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Beyond the Hotsheet, one of the best sources of current real estate information is the avalanche of daily e-mails I receive from other Realtors. On any given day, there are as many as two dozen e-mails announcing open houses, new listings not in the Multiple Listing Service, rentals needed or offered, and requests for various professional contacts, among others.

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Real Estate of Jackson Hole's former dowtown office

Local real estate agencies were fielding dozens of calls from former Real Estate of Jackson Hole brokers Monday after the company’s chairman announced that the agency, one of the state’s largest, had closed its doors.

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Teton County has not been immune to the recession, despite the notion that we live in an isolated economy.

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