Jackson Hole had 22% fewer closings year over year in 2023, and a 24% decrease in the dollar volume of real estate sales, but it would be a mistake to see in those numbers any real cooling off for the popular tourist destination’s real estate market.
In fact, Jackson set a new record for average list prices on single-family homes last year, hitting $8.625 million, which is up 13% year over year. Median prices, meanwhile, were down 2% year over year at $3.43 million.
“It’s not due to a lack of buyers wanting to buy,” said associate broker Devon Viehman, with The Viehman Group. “It’s due to the lack of sellers wanting to sell. Our inventory is just so low right now, and that’s what’s really driving it.”
The Viehman Group regularly tracks real estate sales in Jackson Hole, issuing quarterly and year-end reports. Its latest shows Jackson Hole had just 58 single-family homes for sale as of Dec. 31.
Only two of those were listed for less than $2 million, while half of the homes were listed for more than $5 million.
“The market has leveled off,” Viehman told Cowboy State Daily. “But the (lack of) closings is not because the market’s necessarily slowing down. There’s just fewer things for sale.”
Prices Remained High Despite Interest Rates
While many had predicted a price drop at the end of 2023, that never materialized, Viehman told Cowboy State Daily.
The year closed with a total of 335 sales in Teton County, according to the Viehman Group’s annual report and, despite a lack of sellers and inventory right now, the dollar volume still managed to top $1.35 billion.
Luxury homes also reported 22% fewer closings. The luxury market includes homes selling for $10 million-plus and condo/townhomes or single-family lots that exceed $5 million.
The hottest spot in this supernova-hot market were for sales between $1 million to $3 million, where 139 sales were recorded — about one-third of the overall total number of sales.
As of this week, though, only 15 homes are listed in that price range.
That, combined with a drop in interest rates expected for 2024, is bound to continue pushing prices up in the nation’s wealthiest county.
The Lock-In Effect
Part of what’s contributed to this unusual inversion in the Jackson market, where demand is as high as ever, but sales and dollar volumes are down, is what analysts refer to as the interest rate “lock-in” effect.
Many homeowners were fortunate enough to refinance their homes during the pandemic at record low interest rates — as low as 1.9% at the bottom.
But right now, with interest rates approaching 8% at their peak, many homeowners have put off any plans to relocate, regardless of whether they were looking to upgrade or downsize.
In a recent Fannie Mae study, about 29% of homeowners reported that they are hanging onto their homes longer than planned.
Not all of them cited interest rate lock-in as the reason. Some said they liked their home and location, while others said they planned to stay because it was convenient to their workplace or family.
Retirees, meanwhile, often prefer to live in their homes as they age.
But, undoubtedly, the high interest rates are helping some to like their homes longer than they might have.
Viehman, meanwhile, said she’s seen far fewer trade-ups than usual in the Jackson market.
“They just don’t want to leave those 2% interest rates they have,” she said.
The Bottom Of The Jackson Market Is Probably Now
As interest rates drop and the weather warms, Viehman is expecting the trade-up segment of the market to start moving again. That’s going to happen alongside all the additional demand that spring and summer always brings to Jackson Hole.
Viehman believes that people who have been thinking about wanting to live in Jackson throughout all this uncertainty are probably going to go ahead and pull the trigger this summer as interest rates drop.
That could mean that right now is the bottom of the market, such as it is, even though supply remains scanty.
“Buyers have a unique opportunity right now, because there’s not a lot of competition going on,” she said. “If you put in an offer, you might have more negotiating power.”
Well-priced homes are still getting multiple offers, but Viehman is seeing that some sellers are open right now to buying down interest rates, making repairs, and things like that.
“Buyers have the ability to negotiate right now,” she said. “And I don’t know if, when summer rolls around, they’re still going to have the opportunity they have now, with that kind of power.”
Meanwhile, the long-term prospects for anything like affordable housing in Jackson don’t appear to be improving, Viehman told Cowboy State Daily.
There are just two state-owned sections in Teton County with potential for development, according to The Viehman Group report.
There is one on Moose-Wilson Road, and another near Kelly. Both parcels are 640 acres, but traffic and infrastructure are issues for any dense development there.
Developments like North South Park, meanwhile, continue to face hurdles with local governments.
Renée Jean can be reached at renee@cowboystatedaily.com.
