Another project that we have had a lot of interest in lately is our Daisy Bush development in East Jackson. Today there are two lots going under contract. This is an exciting development with contemporary three bedroom, three bath, single family homes that are designed by local award-winning architect Steve Dynia. I believe that Daisy Bush lots are the best value you can find for any lot in town.

A short sale in a NE 40 in Rafter J just closed for $375K, probably a good deal as the prices are almost 50% off their peak.

I have said it before, I think that just as we were in an anomaly: financing for everyone, boom times and 20% annual appreciation, we are now in a time where there is little financing, investors are just willing to get out with a small loss to simplify, and prices for the first time in 30 years have suffered a massive reduction. This next year will be about shoring up balance sheets, creating value and increasing cash flow—inventory will drop, prices will hit a point where the numbers are substantially less than replacement value, banks will begin lending money to qualified buyers, and prices will increase again to return to basic fundamentals.

Bernanke delivered a speech last week in Jackson Hole. He says that the economy is starting to improve. Foreclosures are driving prices down. Banks are making it difficult for buyers to get their first mortgages, ironically when there is an $8000 credit out there, appraisers have no comps—-prices are coming down and many of the buyers who have been sitting on the sidelines are jumping back into the market. Even buyers of affordable units are jumping into the free market.

I will believe it when the job market improves. Many of the efficiencies are by cutting costs. Many of the profits are eked out by layoffs and savings, not job creation. When this changes the market will improve.

When buildings like the one above are filled with employees with job security, that is when the market improves.

1. Buy what you love. Don’t buy what you like.

2. Plan on keeping the property for 10 years. Don’t think you might sell next year.

3. Buy what you need. If you need 2,000 sqft, don’t buy 4,000 sqft.

4. Buy what you can afford both in time and money.

5. Buy A+. Make sure the property has some kind of amenity, whether stream, close to downtown, roofdeck, etc.

6. Buy on fundamentals.

Sotheby’s just listed a 2,900 sqft home on 3.8 acres south of Jackson for $800K. That sounds interesting, although historically Hoback Junction is the slowest part of the market.

We are listing a home on Broadway for $575K, 1300 sqft, small lot, but possibility of development in the future comp plan. I don’t think I have seen east jackson in the mid-500s for over 3 years.

Aspens units—a friend just sold her home and is investing in a unit in the low 300s. Not a bad deal as the prices of these units have dropped almost 50 percent. The least I have seen someone pay is $285K as a short sale.

Prices seem to be all over the place but starting to settle down. Our market is returning to healthy fundamentals, cap rates, sustainable rents, and better long-term business plans.

We are seeing a thaw in the market–however this will only continue if the wheels of finance continue to turn, appraisers get actual comps (at AR zoned lot just appraised for $525K????), sellers decide to sell and take the loss, and buyers decide to step away from the sidelines. But first we need jobs and confidence and I think we are starting to see both return.

Large homes in John Dodge and Fairway Estates are under contract and are listed for $5M. This movement is not based on financing but owners ready to move on and savvy buyers looking for good deals on newer properties.

For more information, search our Jackson Hole MLS at Prugh Real Estate ’s website prughrealestate.com.