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.