Real estate pros say Jackson Hole’s housing struggles are seemingly peaking, and they point to the same trends that have pushed the market in recent years: more social problems and high taxes in California and Texas and on the East Coast, the lure of mountain living in a pretty little town and the ability to work a big city job from northwest Wyoming.
But, as the final straw, the recent crisis has been fueled by people fleeing COVID-19.
“Jackson has been ramping up to this for three, four, five years now,” said Kurt Harland, a Berkshire Hathaway Home Services owner. “Corona definitely, definitely ramped things up more. What the virus did, is people who have second or third homes here came out and realized they really enjoyed being here and that they could spend two or three more times here … and it ramped up the remote work environment by 10 years … coronavirus may have been the straw that broke the camel’s back.”
“It’s a continuation,” said Katie Brady of Compass. “But it’s also a dramatic and unprecedented spike in that continuation … we were on an upward trend and then the pandemic exacerbated the trend.”
David Viehman of Engel&Volkers emphasized just how tight housing for local working people was even before COVID-19, but said it was a big factor.
He said he’s seen “dozens” of properties selling for 30% to 100% higher than just a year before the pandemic: “It took off and it’s left locals behind,” he said of the cost of housing. “It was already hard, but it’s impossible now.”
The demand for Jackson Hole real estate and the prices people have been willing to pay have soared in just the past year of COVID-19. People bid on houses; houses and townhouses sell before they hit the market.
“I don’t have enough adjectives,” Brady said. “Unprecedented, staggering, never seen before.”
Some shoppers are new to the idea of living in Jackson, but others are people who’ve considered buying for years and finally jumped when COVID-19 gave them a shove: “What I saw was people who had been looking at Jackson for years and hadn’t pulled the trigger, they rallied whatever resources they had and pulled,” Harland said.
The spike is from bottom to top, and while people might think sales of multi-million-dollar houses on buttes don’t affect them, they do — every 1970s apartment that becomes more expensive drags rental and sales prices up on the property next door, in other neighborhoods and the whole market. Brady said property not previously seen as second-home material has been sucked into that category.
“There’s always been second-home owners, but the second homes have always been south of town and in John Dodge, places like that,” she said. “Now the second-home owners are buying up the housing stock traditionally used by working people, Cottonwood, Rafter J, townhomes in town.”
There are now Rafter J and Cottonwood houses priced in the $2 million range. Another project that was supposed to be part of the solution is the old Virginian Apartments, which became the Virginian Village Condominiums in 2017 after a sale and refurbishing.
The units were promoted as the newest entry-level places to buy and live in town. The 56 condos were half one-bedroom and half two-bedroom, with a one-bed all of 475 square feet and with prices starting at $279,000. In recent weeks they’ve been seen priced at about $512,000. A 758-square-foot two-bedroom unit was advertised recently at $759,000.
On top of sales to people who need a place to live and to vacation homeowners has been added a new factor, Brady said: big institutional investors who have seen the profit trend and which are “in town buying whatever they can.”
A big part of the move for many — slow in recent years and rising sharply with COVID-19 — was the maturing of the internet connections that cut people from desks in downtown offices and let them work from anywhere.
Donna Clinton, CEO and responsible broker at Sotheby’s International Realty, said it was a shift just waiting to happen.
“Now people know they can work from home, they can pick and choose where they want to live,” Clinton said, “and we’re the place.”
Viehman noted the dent the virus put in inventory, which was already only in the 300s before COVID-19, the lowest in 25 years. He said that in March listings fell as low as 65. That’s rebounded, he said, but not enough to make a difference. With little being built for working people, he said, it’s likely inventory will recover some “but I don’t see our prices going down” even with what looks to be some overpricing.
And many working residents who were waiting for the right time to sell, eyeing the traditional move up in the local market, now find that if they do sell “they can’t trade up,” Viehman said. For a big part of the working and middle class selling means “they have to move away,” he said.
Harland said people from outside will marvel at the higher prices but have so far shown no sign they won’t pay. People who were shopping a few years back and finally were convinced to make a move by the virus “paid significantly more,” and though not happy with that “were willing to do so.”
Prices have seen “a huge leap since last year,” Brady said, “and people are paying it … everyone wants to live here.”
Harland saw it the same way, that people compare the Jackson they find today to where they’re coming from, not to the Jackson of years past: “People are not going to stop coming here just because there an hour wait to get an ice cream cone,” he said. “People are going to wait an hour.”
Even a reporter at the Jackson’s Hole Courier, writing about the 1945 housing crisis, knew the problem was likely to resist easy solution, and for the same reason we see today.
“From all indications,” he wrote, “Jackson will be a rapidly expanding town in the next few years.”