I was reminded this week by a long time Jackson Hole real estate pro, with 30+ years experience, that real estate is "local". What this means is that Jackson Hole is effectively an island, which can not be expanded outward into the suburbs. There are no suburbs in Jackson Hole! Certainly there are commuter markets which are located outside the general Jackson Hole valley, which have an abundance of private land. These areas are much more affected by the supply portion of the macroeconomic conditions which are prevalent.

When your comparing Jackson Hole to other resort communities, the neighboring counties are not a true comparison. More realistic comparisons are the top tier mountain resort communities, such as Aspen, Telluride and Park City/Deer Valley. However, getting back to the local phenomenon, what differentiates Jackson Hole from these other top tier mountain resort communities is: lack of state income tax; airport which is conveniently located, wide variety of high quality recreational amenities, unmatched scenery and diverse amenities of town and the Village. Did I forget to mention the new tram at JHMR! Of course this is not an all inclusive list, but some of the big factors which combine to create a highly demanded, exclusive, mountain resort oriented community, with a finite supply of real estate. This is the demand side.

Since real estate is considered a long term investment, it is important to recognize these factors. In the long term, demand will likely increase, due to the retiring baby boomers and desire of many high net worth people to live in such a exclusive area. It does not take more than a few dozen newcomers to have an affect on real estate values in this area. On the supply side, there is limited potential increase, which will be mostly infill. Some large tracts of land exist in this valley, but it is unlikely that they will be developed in such a fashion to have a significant impact on the supply side. Meaning, what you see today will change slowly in Jackson Hole, and real estate should continue to be highly coveted.

In conclusion, the reason most of us live in Jackson Hole is the unmatched quality of life, with world class amenities, amazing scenery and ecosystem, and lack of state income tax. These factors directly relate to the demand for owning real estate in this valley and the intangible associated benefits.

Review of a recent site sale and pending sales in Teton Board of Realtors MLS, this week, indicate buyers have not lost sight of these factors.

Have a great weekend.

Ken Rizzotti

rizzottiappraisal.net

Its hard to ignore the volatility in the stock market recently. The financial crisis recently noted in European nations has been felt nationally & locally. This appears to have an unsettling affect on the real estate market, both nationally and locally. The financial crisis recently noted in European nations has been felt nationally and locally. Along with the stock market, I pay attention daily to market sentiment. I am talking to market participants, brokers and lenders daily. I have not heard a lot of fluffy comments lately, which leads me to believe that the real estate market both nationally and locally have not changed much in the past quarter and since January 1, 2010.

How does all this relate to real estate in Teton County? First, depending whether your a buyer or seller, information is more readily available then in the past. Knowing what to look for will likely give you a clearer picture of the true market conditions, and how to act or react. When buying or selling real estate, gather all the facts regarding number of sales in your market segment in the past 12 months, current inventory, absorption and days on market is step one. Then go look at the recent sales, the more recent the better. Also, look at the active listings and pending sales. What were the most recent listing prices of the pending sales. See if there was a catalyst that triggered someone to make an offer.

Another factor which is huge in this market is the low prevailing interest rates to qualified buyers. Meet with a local lender and find out whether they can back your dreams. Some lender’s have the ability to finance property types others can not. Its important to know that your lender can perform. I like knowing I can make a phone call to a local lender, as opposed to some customer service center in who knows where.

Low prices and low interest rates are currently aligned. For how long they will both be at these levels is anyones guess. Opportunities currently exist for both buyers and sellers.

Happy 4th of July.

Ken Rizzotti

rizzottiappraisal.net

I have been asked by the Editor of The Jackson Hole News and Guide Real Estate Web Site to assist with their real estate blog. I graciously accepted this offer, and hope that my 20 years of full time residential real estate appraisal background, including personal investment in developing a subdivision, constructing a spec home, constructing a commercial building, and buying and selling real estate in the Jackson Hole area, will provide some insight to the inexperienced or experienced, real estate consumer in this area.

Real estate has fascinated my interests since I began my appraisal career in beautiful San Diego, California, in January 1990. Having little knowledge of the field, and being accustomed to the concept that real estate values always rise, I soon discovered that like any market, there are cycles, and the trees do not always grow straight to the sky. My first appraiser mentor shocked me when he said, values peaked sometime in mid 1989 in San Diego, which was immediately prior to starting my apprenticeship. What does this mean, "peaking". Well, I soon found out that values were in a correction phase in 1990 and continued to sometime in the mid 1990’s in San Diego.

Although I was not sure of the exact causes of the market correction, as I had no clue what propelled the market to such heights before the peak, I later discovered that my degree in Business Economics from U.C.S.B. enabled me to understand that real estate

prices are a function of supply and demand. Quite simply, the prices of a commodity are influenced by the relationship of supply and demand. Strong demand and low supply generally results in rising prices. Low demand and high supply generally results in declining prices. Does this mean that all properties in a given market will behave precisely according to this general, simplistic theory. No it does not. Within any given market there are segments of narrowly defined properties, which may perform similar to the general trend, outperform of underperform the general trend.

Real estate is unique in the sense that it is location specific. Like the saying "location, location, location", you can change many aspects of a property, but can not change the location. Location in a community, subdivision, project, street, building are not changeable. You can change buildings, move buildings, enhance sites, but you can not move a site! This is a fundamental real estate principle, which directly relates to its demand within a market. Certain properties, such as river front, or ski slope frontage sites, generally have a very limited supply, and are often held in high demand by buyers within their respective market segments, similar to ocean front properties.

Lastly, for my first blog article, I want to plant the seed that the real estate market is dynamic and constantly changing. Just when we think we have things figured out, we realize that attitudes, preferences, styles and needs have changed, which affect our real estate decisions.

Ken Rizzotti