In April 2020, during the early days of the COVID-19 pandemic, Park County’s housing market was fairly cool, which wasn’t entirely a surprise. Realtors were having to socially distance and sanitize houses after showings, and there was a lot of economic uncertainty across the world. The expectation was that it could be tough times ahead.
At the time, Eric Paul, broker/owner of Heart Mountain Realty, predicted the summer season, which is normally busier, would see an improvement; John Parsons, co-owner of 307 Real Estate, speculated the strict lockdowns in cities might lead to a growing appreciation for the open spaces of Wyoming.
They turned out to be right. By the summer, the market was heating up — and it never slowed down. Today, the housing inventory in Powell is at lower levels than anyone can remember.
“As realtors, we have to be more creative to find those properties, and buyers have to be more prepared and have all their ducks in a row so they can make the purchase seamless,” Parsons said.
In mid-April, Paul said he was down to about a dozen listed residential properties. That excluded farm and ranch and undeveloped lots, but he’s never seen the residential inventory so low.
Parsons agreed the inventory is unusually low, but he added that it’s the nature of the business to always present something unexpected, whether it’s prices, interest rates or inventory.
“One thing about our business is that I don’t know what’s usual, what’s normal anymore,” Parsons said.
Paul said that as much as a sellers’ market sounds like a nice place to be for a realtor, it has a downside. With 45 to 50 realtors in the Powell market, it creates a lot of competition. Some buyers, unable to find the house they want, are moving on to other locations, he said.
“I had some buyers stick with me six months or a year, and then they can’t find anything in Powell,” Paul said.
The inventory elsewhere in the Big Horn Basin, including Cody, is not any better, so those prospective residents are moving on to other states, which is one less person or family coming to Park County.
“We got buyers for the inventory, but the problem is unless you’re looking to sell your house and move to another locale,” then the inventory isn’t offering an opportunity, Paul said.
Parsons said there was a time in the mid 1970s to the late 1980s, when an oil and gas boom strained Powell’s inventory.
“Things got tight, but not like this,” he said. “This is just unprecedented.”
Moving to Wyoming
A big driver of the sales frenzy for Powell in particular is people moving in from other states — a trend that started with the pandemic. Paul said a lot of the people he serves are not moving from cities, but rather towns of similar sizes. Many of them are coming from northern Colorado and central California.
“They’re trying to get back to a quality of life that they had 15, 20 years ago,” Paul said.
Most are retirees, but he’s seen a few professionals who can work remotely buying homes in the area.
Holly Griffin, broker/owner of The Real Estate Connection, said many of her buyers are coming from California, Colorado and Washington. She’s had a few from Florida. She’s not seeing people coming from the Midwest.
“We do have an excessive amount of buyers right now from people looking to move into Wyoming,” Griffin said. “Finding a property that’s going to work for them is proving to be difficult.”
Parsons is seeing people from all over the West, as well as some from Austin, Texas, who work remotely in the tech industry.
“We have a very safe, desirable community with great schools, great resources, lots of outdoor recreation, and people are putting a greater value on quality of life,” Parsons said.
While there are many benefits to people moving into the area, Paul said it contributes to “gridlock” for what are called “move up buyers.” These are people whose first homes are small. Then, as their salaries and families grow, they look to buy something bigger.
Now, any house in the $350,000 to $400,000 range is going to get a lot of offers from all those well financed people coming from out of state.
Parsons said buyers, acting with a sense of urgency, are overlooking things they normally wouldn’t. They’re sometimes skipping the inspections or appraisals.
“They’re waiving all contingencies and making a clean purchase to make their offer more attractive,” Parsons said.
As a result, growing families of long-time Powell residents are stuck in their smaller homes.
Uncorrected market
Paul did an analysis of home prices where they sat in March, averaged out over 10 years, compared to the same a year before. He found about an 11% increase in home prices.
“It’s a true effect of supply and demand,” Paul said.
Parsons said he’s seeing the increase at 307 Real Estate, too.
“People are having a little bit of sticker shock because our prices have gone up so much this past year,” he said. “More people are looking at existing [rather] than new, because it offers a better value, but there just isn’t much inventory.”
In response to the demand, home builders are getting work. According to the Federal Reserve Economic Data, new home starts hit a 14-year high in December. This has created a huge demand for lumber, and builders are seeing material prices sky rocket.
“I’ve never seen anything like this before,” said Scott Shoopman, co-owner of Smooth Edge Custom Construction. “I don’t think we’ve seen a market correction, and it’s going to take a while to catch up.”
In April, Shoopman bought a bunk of oriented strand board (OSB), which is a type of engineered wood similar to particle board. It’s used for flooring and wall and roof sheathing. It cost Shoopman, he said, the same amount as three bunks did last year.
The National Association of Home Builders estimates that current lumber prices are adding $24,000 to the price tag of a typical new single-family home.
And the prices are changing very fast. Shoopman said he thinks some contractors might be shying away from bidding jobs because they don’t know what their costs will be.
Josh Wiggins, co-owner of Wiggins Construction, said they’re giving their customers estimates that are valid for a few days, whereas they used to be good for a couple weeks,
“We’re really protecting ourselves right now,” Wiggins said.
He said it’s not all materials. Shingle prices, for example, are fairly stable, and their suppliers are doing a good job of telling them what to expect in the way of prices. Yet, business is booming in the housing industry, so until supply catches up to demand, the prices are going to continue to rise.
“As much business as we want, we can have it,” Wiggins said.
There is some new home building going on in Powell, including the Cottonwood Subdivision, which Harvell Construction is building. It’s a three-phase development that is projected to be over 100 homes when it’s complete. However, that could take several years, with a first phase of 15 homes.
Paul said most of the recent building in Powell is custom homes, meaning they’re being built for a buyer and not creating new inventory for prospective buyers.
Parsons concurred that most of the current building isn’t creating new inventory.
A good problem
Besides the Powell office, 307 Real Estate has offices in Cody, Buffalo and Sheridan. Parsons said the strain on housing inventory is across their northern Wyoming markets. While the dollar has lost some value, interest rates remain low and so buying power is high.
Parsons estimates that over the next 12 to 18 months, the bigger builders are going to get in on the action and start catching up to demand. However, he cautioned that there are a lot of unknowns, and it’s hard to say exactly what will happen.
For the time being, Parsons, Paul, Griffin and the other realtors in the area are making the most of a tough but good situation. The competition is hot, but they all reported record years last year.
To match her buyers up with houses, Griffin said she keeps in touch with people who are possibly looking to sell, putting “feelers out” in hopes she can find a house.
The sellers are “not always responsive, because if they sell, they’d have nowhere to move to,” Griffin said. “Sometimes we get lucky and we can make it happen. Right now, everyone is on their toes, watching for a property to come available. And when it does, they’ll get multiple offers on it very quickly.”
Parsons said over at 307, they’re keeping positive.
“It’s been phenomenal for us as a real estate company,” he said. “We have to be creative, and you have to educate your buyers so they have all their tools ready to go when you do find that place.”
And now, as they creep up on their major selling season, they’re preparing for another record year.
“We got a good team. We’re doing well,” Parsons said. “It’s hard, it is. But it’s hard for good reasons.”
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