INTERVIEW WITH DAVID E. VIEHMAN: Jackson Hole Real Estate
On February 27, 2003, Luxury Vacation Home spoke with Mr. David E. Viehman, owner and broker of Jackson Hole Real Estate & Appraisal L.L.C, about the local real estate market. In addition to overseeing one of the most successful and knowledgeable real estate companies in the Teton Valley, Viehman is chief editor of The Hole Report and creator of some of Jackson Hole's most informative websites. Viehman has lived in Jackson Hole for over a decade and worked in the resort real estate industry for 21 years.
LVHN: Why is Jackson Hole such a unique vacation destination?
VIEHMAN: Jackson Hole is an outdoorsmen's paradise. Over 97% of the county is publicly owned, creating an abundance of access to land for fly fishing, kayaking, rafting, hiking, or whatever outdoor activity you like. Our open space and public access to the land is something that set us apart from most Rocky Mountain communities.
Overall, Jackson Hole is a "small town with big town amenities." We have a great regional airport, over 110 restaurants, 11 movie theaters, excellent shopping, and recognition as the third largest art mecca in the West, not to mention Yellowstone and Grand Teton national parks.
LVHN: We know that Teton County has a population just over 15,000. About how many visitors come to Jackson Hole each year? And what times of the year are most popular among tourists?
VIEHMAN: Unlike the ski resorts of Aspen, Vail or Park City, who really draw upon winter travelers and skiers, Jackson Hole sees much more activity in the summer, with about four million visitors compared to only half-a-million visitors in the winter. We are more of a year-round resort, attracting a lot of golfers, hunters, fisherman and sightseers in the summer. Our winter season starts around November 1, when people come for alpine skiing, backcountry, snowmobiling, and of course, Yellowstone for its wonders in the wintertime.
LVHN: From what cities or states do most visitors arrive?
VIEHMAN: Because of Yellowstone's reputation, people arrive from all over the world or even from somewhere as close as Salt Lake City. It's really hard to pinpoint one specific location, but Texas is one of the biggest for second homebuyers. There are also a lot of buyers from the Northeast, like New York, New Hampshire and Maine. Many visitors come from our direct flight cities: Houston, Atlanta, Newark, Minneapolis, Denver and Salt Lake.
LVHN: Jackson Hole draws from many markets for second homeowners. What would you say is the ratio between full-time residents and second homeowners?
VIEHMAN: For the town of Jackson, there are just over 5,000 residents and the county accounts for another 10,000. If you exclude the two bedroom communities of Victor, Idaho and Alpine, Wyoming, which are both over 20 miles away, then I'd say two-thirds or maybe 60% of the homes and condominiums are second homes or vacation properties.
LVHN: Why are people buying second homes in Jackson Hole?
VIEHMAN: Mainly, just to enjoy life. Since 9/11, we're finding that a lot of people are buying into existing condos and homes. The vacant land market is declining simply because people aren't thinking 10-15 years down the road for retirement, they're thinking today, this week. Basically, I think people have come to the realization that life is short and that they should enjoy it.
LVHN: What are some common characteristics you see in second homebuyers?
VIEHMAN: Most buyers enjoy the outdoors more than anything else. They discover that Jackson Hole is unique compared to most communities in the Rocky Mountains and fall in love with all it has to offer. Throughout the valley, second homeowners have a convenient escape where they can fly in, fly out and just relax.
Many buyers also choose Jackson Hole to escape crowds and the city. This is especially valuable to celebrities - Harrison Ford, for example - who want to go on vacation and not be made a fuss over.
LVHN: How often do second homeowners visit their second homes?
VIEHMAN: It depends. Many bring the kids for the entire summer while mom or dad commutes to work. Others, most often condominium owners, visit a couple weeks in the summer and a few more weeks during the holidays, then put their properties into the rental pool for the rest of the year. I'd say there are upwards of 2,500 condominiums in the valley that are owned and used this way. If they decide they want to be in Jackson Hole full time, then they may sell their condo and roll the returns into a home.
LVHN: In your Jackson Hole Report, it states that over $1 billion of real estate is for sale. Why is there so much inventory on the market?
VIEHMAN: Just a couple of years ago, we were hurting for inventory, which really drove our prices going back to the basics of supply and demand. The effects of NASDAQ, 9/11, Enron and other occurrences that nearly cut people's wealth in half has reduced the confidence of consumers. Also, many properties through out the valley are fourth, fifth and sixth homes. In that case, many of the owners are scaling back, realizing they don't need six homes.
Many people have invested into the local market as speculators, buying property and trying to sell it for a return. In the last couple of years, properties just haven't moved.
There are also a lot of new developments on the market. For example, Four Seasons has 15 luxury condos on the market ranging from $4 to $7 million, which there in itself accounts for $100 million in inventory.
LVHN: Your report states that Teton County will see over $1 billion in new real estate values in the next five years. Is there enough demand to sustain this rapid growth?
VIEHMAN: Most of the growth is geared towards second homeowners, where many of the developers, like Four Seasons, will implement marketing campaigns both nationally and internationally. These campaigns will draw more buyers to the valley and even if they don't buy the product that brought them here, they may look at buying other properties. It's tough to say whether there will be enough demand, but the marketing exposure will bode well for the entire market.
LVHN: How will this new growth affect existing properties?
VIEHMAN: I don't think it's going to hurt them. Most upper-end properties have a lot of open space, including golf courses. Many are on the Snake River, resting on 35 or 50 acres tracks or isolated by parks. For example, one developer is working on a deal to build only 27 homes on 640 acres. Because private land is such a commodity, I don't see high-end real estate values dropping with the introduction of new inventory.
LVHN: Jackson Hole is also becoming a popular spot for private residence club development. What are your thoughts on these real estate products as second home alternatives?
VIEHMAN: I think residence clubs fill a niche for people that don't want the full time exposure of owning a second home, whether it's for maintenance or for cost and there are definitely buyers out there that the product appeals to.
LVHN: In some markets like Aspen, local realtors feel that residence club ownership has deteriorated the market for condominium sales. Do you think this is possible in Jackson Hole?
VIEHMAN: That's a good question, but it certainly hasn't happened yet. Teton Club has been selling for a while, Teton Pines just went to the market and Four Seasons is preparing to, so it will be interesting to see. Again, these clubs fill a niche in the valley. Especially the Four Seasons name, with access to their amenities and properties worldwide, it is good product.
LVHN: Overall, what do you anticipate for the local real estate market in the next 2-3 years?
VIEHMAN: We've seen our bottom. We hit bottom in 2001 and 2002 and we're now predicting a slow, but steady increase. A lot of the new products and new advertising is going to help the entire county. We may accumulate a lot more inventory than we currently have, but I think we've turned the corner. The rest is up to the economy and consumers' confidence to buy anything, whether it's Jackson, Aspen or New York City.
For more information, please contact:
David E. Viehman
Jackson Hole Real Estate & Appraisal
307-733-3436
david@jhre.net
www.jhre.net
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