With the COVID-19 pandemic predicted to peak in Teton County in early May and few if any hospitalizations anticipated after early June, a number of friends and clients have asked us what impact we believe the pandemic will have on real estate in Jackson Hole. In answer to these questions, we see two conflicting trends.
On the downside, many homeowners and potential buyers will have suffered severe economic hardship, which logically will drive down both demand and prices. As a marker for what could happen, we looked at annual sales after the last recession in Melody Ranch, a neighborhood of several hundred single family homes south of town, along with the 80 or so Teton Pines Cluster homes. While each home is certainly different…some have been remodeled, some have better views, and so on….looked at in the aggregate, on a sales price per square foot basis, we believe the data is revealing:
As indicated in the first chart, prices in both Melody and the Pines peaked in 2008, then declined precipitously to a low in 2011, with a 37% drop in Melody and a 41% drop in the Pines clusters, though it should be pointed out that the sample size in the Pines was very small. It subsequently took an additional six years for prices to regain their 2008 levels in Melody and five years in the Pines. Will that pattern be replicated post-pandemic? The answer will, of course, depend largely on how quickly the economy recovers, but we think it’s safe to say there will be some bargains in the marketplace for anyone in a position to move forward. Interestingly, the number of sales in each of these neighborhoods was not greatly affected during the recession, as shown in the second chart.
On the upside, at The Clear Creek Group we have been approached by a number of clients, primarily at the high end of the market, who are now focused on purchasing a property in Jackson Hole sooner rather than later, accelerating a trend that began after 9/11. A client whose opinion we respect calls this a “flight from density”, where individuals in urban areas who have the economic wherewithal and the ability to work remotely are reconsidering their lifestyle and thinking seriously about leaving the crime, traffic, disease, and just plain too many people in our cities for a better life in places like Jackson Hole. How many of these conversations translate into actual sales remains to be seen, but already, we are seeing a shortage of properties that would be attractive to this demographic, and with Jackson Hole’s unique attributes…only 3% of the land mass developable, #1 ski mountain in the country, natural beauty and unlimited outdoor recreation, most tax-friendly state in the country….we have always been more resilient to economic swings than most other resort communities.
If you’d like to talk further about these trends and how they could affect your personal objectives, please give me a call. I’d enjoy speaking with you.