Spurred by a strengthening economy and the rising popularity of Jackson Hole as a destination, the number of homes available for sale in Teton County has decreased significantly during the past three years. While overall inventory in Jackson Hole was 6 percent lower at the end of 2015 compared to the same point in 2014, the number of vacant land transactions rose by about 14 percent last year. As real estate buyers increasingly consider land for sale in Jackson Hole amid historic lows in home inventory, our new three-part series will explore the essential considerations of buying land and building a house near the Tetons.
Aside from being a timely solution for the limited number of homes for sale in Jackson Hole, building on vacant land has many benefits. Buyers who build have much more freedom in customizing their home’s style, layout, special features and landscaping. While the building process is longer, more complicated and typically more costly than purchasing an existing home, the long-term savings can be far greater. Tax credits can offset some of the extra costs if you install renewable-energy systems, and the greater efficiency of modern homes can help you further recoup costs with energy savings for years to come.
Land for Sale in Jackson Hole: Not Your Typical Lots
As you weigh the pros and cons of building vs. buying a home, it is important to understand that land ownership in Jackson Hole brings unique benefits and responsibilities. The amount of available property is finite: More than 97 percent of Teton County has been set aside as public land in the form of two national parks, national forest, the National Elk Refuge and other entities, and large portions of the remaining 3 percent have been preserved by easements created by the Jackson Hole Land Trust. This presents buyers with an opportunity to own a truly rare piece of land that will gain value in good times and retain value during downturns. On the flip side, you must understand and be prepared for the unique building and ownership practices that complement the conservationist spirit of Jackson Hole.
When envisioning your dream home, keep in mind that all residential construction in Teton County must adhere to updates in the 2012 International Business Code, International Residential Code and International Energy Conservation Code, which call for significantly improved energy efficiency in new homes. Adopted in 2014, the latest Teton County building code ensures that new homes are about 10 percent more energy efficient than prior home builds. The county has estimated that the updated codes add about $1 per square foot to home building costs, however, homeowners are expected to save energy and money in the long run. Regardless of the specific regulations, most local architects agree that building a home that is energy efficient and well insulated is a wise investment that will buoy your property’s value if it is ever sold.
As a popular vacation destination with rising property values, Jackson Hole must also find ways to create housing opportunities for lower income residents who provide vital work in the local service, hospitality, leisure and healthcare sectors. Part of Teton County’s solution is to subsidize affordable housing with a fee that home builders must pay as part of their building permit for a single-family dwelling. Builders on vacant sites should plan to pay affordable housing fees for every square foot beyond 2,500 square feet of habitable space in their homes, whether it is $5.07 per square foot for plots established before 1995 (usually the case) or $26.37 per square foot for plots established during or after 1995.
Don’t Overlook the Geological and Climatic Factors
Before you purchase a building site, you should also consider the unique geology of Jackson Hole and its effect on the particular land for sale. While most of the valley floor is river bottom that sits soundly on rock, some Jackson Hole properties are located on hillsides made up of a softer silt-and-clay substance called “loess,” which can be unstable if its moisture content is too high. To prevent settling or irreparable damage caused by a geological event, it may be necessary to install helical piers below the foundation of hillside homes, adding major costs to the construction. In fact, some vacant sites listed on the market may not even be developable at all if the land is too steep to build upon in the first place.
Though typically small in magnitude, earthquakes can occur in Jackson Hole as well, and a significant event is not out of the question given the elevated seismic activity in the Greater Yellowstone region. To address this possibility, Teton County follows stringent building regulations pulled from California and the International Building Code to ensure that newly built homes are optimized to better withstand earthquakes. Many of the construction techniques used to meet these regulations can also help to reduce the impact of heavy snow loads on Jackson Hole homes in the winter – a much more prevalent risk than earthquakes.
While this range of environmental factors can be intimidating to land buyers, planning a home from scratch ultimately gives you an opportunity to limit your risk related to these issues. By tapping the intricate local knowledge of engineers, architects and contractors in Jackson Hole, buyers can mitigate the vulnerabilities associated with some older homes that were not subject to stricter building codes. Once a building site has been identified, we typically recommend that our clients start their due diligence by having the property’s soil and slope stability analyzed (if not already done) by a qualified geotechnical engineer at local firms like Nelson Engineering, Summit Consulting Group and Y2 Consultants.
Should You Buy and Build on Land in a Subdivision?
Jackson Hole has a number of appealing subdivisions that offer desirable building sites and a range of conveniences that apply to both the building process and the subsequent home ownership. That said, those conveniences come with varying limitations that are typically outlined in the subdivision’s Conventions, Conditions & Restrictions (CC&Rs) and homeowner association (HOA) rules. To determine whether it is better to build on developed land in a subdivision or on less developed land in an independent location, it helps to outline the ultimate end use of your home and how it meshes with the pros and cons of each option.
In a subdivision, buyers typically don’t have to worry about hooking up to community water, electricity and sewage. For buyers who wish to be part of a community, ownership in a subdivision provides the chance to interact with neighbors and take advantage of well maintained roads and other shared resources like on-site trails and tennis courts. In general, the home values in a subdivision are more stable and predictable because of this interconnectivity.
On the other hand, a subdivision’s CC&Rs will often place restrictions on the size, style and building materials of your home. Many Jackson Hole subdivisions dictate an overall look that is consistent with its other homes and the Western styling of the area, and some even require the use of certain architects and home layouts. While you may be in love with the view on a building site in a subdivision, it may be for naught if the CC&Rs say you can’t park your beloved trailer in front of your home. A subdivision’s CC&Rs can range from three pages to book-size, so it is important to understand their full scope before you purchase land.
Buying undeveloped land in Jackson Hole outside of a subdivision will usually give you the most freedom in designing your new home. Aside from the building codes enforced by Teton County, there are no limits to the styling and layout of your home on these sites. Generally, a home built on previously undeveloped land will grant you greater privacy and more pristine surroundings, and you can also avoid CC&Rs and HOA fees for services that you deem unnecessary or inadequate.
Conversely, there will almost always be greater upfront costs and risks associated with building on independent land instead of within a subdivision, so the key is identifying a site where these factors can be limited to fit your budget. Smart due diligence should include the hiring of an engineer to identify the feasibility and related costs of grading the land and hooking up water, electricity and sewage. In some cases, you may need to finance a road, large driveway or bridge to access the property, and if not, you may still need to pay for the maintenance and plowing of that access.
When it comes down to it, the decision of whether to buy vacant land in Jackson Hole is about weighing your freedom of design and long-term cost savings against the convenience and lower initial investment of buying an existing home. Regardless of your final choice, you should always consider how you can maximize the enjoyment of your Jackson Hole home while helping to preserve the same opportunity for future generations.
View Part 2 of our Jackson Hole Land Sales Series, which details the process of choosing an architect, builder and interior designer once a home site has been chosen.