Star Valley Market Conditions - August 2007

The National real estate report just released shows declines in the total existing home sales and the median price for April, May and June. According to the National Association of REALTORS®, 97 of 149 metropolitan areas showed a year-over-year increase in the median existing-family home price.

In comparing Jan 1, 2007 thru August 15, 2007 to the same period in 2006 for Star Valley, the Teton MLS Data reports the total number of active single-family homes in Lincoln County increased by 7% (453 to 486). New listings are up 2% (335 to 344). The number Under Contract changed slightly (164 to 166 or 1%).

The number of homes that have sold is down by 7% (142 to 132). The Average Sales Price us up from $275,823.00 to $309,942.00 or 12%. In 2006, Sellers received 97% of the Listing Price. This year it is running at 96%!

Vacant Land Building Sites is another area we monitor closely. With the moratorium on subdividing land in Lincoln County lifted a year ago, we have seen an explosion in new lots listed! The number of building sites jumped from 524 in 2006 to 720 (37%) in 2007. New Listings are up 19% (379 to 453) and the Average Sales price is up 58% ($102,994.00 to $163,422.00).

The bad news is that the number of lots Under Contract is down 32% (204 to 138) and the number Sold down 20% (165 to 131). Typically, vacant lots are purchased for New Home Construction by a builder for a spec home or the homeowner for a custom home build job.
There is an old saying that real estate is local. While many markets have declined, Star Valley real estate continues to hold its own in spite of all the problems in the mortgage industry and the housing industry.

That does not mean that national events will not affect our market! Unlike real estate, the mortgage industry operates on a national if not global scale. This will result in some unpredictability in our market over the next 12 to 18 months.

When we look at the Vacant Building Site data, we believe that we are already seeing the first signs of a shift in the market place! If any area of the country can survive the "Perfect Real Estate Storm" we believe it is Star Valley!

Low Ball Offers - Is the Gamble Worth It?

Aces & Eights is known around the world as the Dead Man's Hand. So ... what does that have to do with Real Estate? Lately I have read several articles on how to make a low ball offer and get the Seller(s) to accept it.

Most readers (including real estate agents) forget that all real estate is local! In Detroit or L.A. or New York there may be more Sellers than Buyers, a large inventory of unsold, new construction homes, etc. You "might" be able to make a low offer and buy the home. That does not apply to all real estate markets.

Star Valley is a prime example. We are a resort community steeped in the shadows of Jackson Hole's World Class Resort and Yellowstone Park. Rarely do we see situations where a job transfer forces a sale, or there is a large workforce layoff. Our "large" builders build three or four (that is 3 or 4!) homes a year ... not several hundred! A high percentage of homes are second homes, vacation and/or investment properties.

In our present market, presenting a low ball offer is a very big gamble that will usually offend the Seller. Usually, once the Seller is offended no matter what the Buyer does next, the Seller does not want to work with them or there agent.

The big question for the Buyer is to determine what to offer? How much you can spend is no concern to the Seller. The Sellers want top dollar for their product and will overprice!

I encourage Buyers (and their Agents) to research the local market conditions. Create a Comparable Market Analysis (CMA) the same as if you were going to list that property For Sale. While knowing what similar properties are being Listed for, the most important number is what are they "Selling" for.

Other factors to consider are how many days has the home has been on the market (DOM), any offers, price reductions (or increases), etc. Here again I urge caution! I have seen numerous articles that you should never list a home for more than 30-60-90 days!

Depending on the price range, properties in Star Valley will average from 100+ days to over 400-days! A low ball offer based on DOM is, in all probability considering our present market conditions, Aces & Eights ... a Dead Hand!

Mortgage Fraud

If all the articles I read are even close to being accurate, mortgage fraud is BIG with a capital "B" business, it is a criminal offense and yes, it does happen in Wyoming!

The warning signs of abusive lending, along with a borrower's Bill of Rights and links to reporting abusive lending can be viewed at http://www.stopmortgagefraud.com.

Why should you care? Mortgage Fraud hurts lending institutions and real estate professionals as well as the overall health of the U.S. economy, it also cons a large number of homeowners every year. If you're buying property, refinancing a mortgage, or looking for creative ways to eliminate home loans and other debts, you are a potential target.