At Bootpack, one of the services we offer is guiding clients through the complexities of purchasing homes in Jackson and other competitive markets. While the usual factors—income, mortgage rates, taxes —play essential roles, one consideration often takes center stage: potential home price appreciation (HPA).

Many clients wrestle with the decision to tap into their stock portfolios to fund a home purchase. They seek our advice on the trade-offs between stock market returns and the growth potential of Jackson’s real estate. It’s a compelling comparison, given the wealth built through real estate in this area.

We all know someone who struck gold—whether by buying in Teton Village back in the early 2000s or flipping a property during the COVID boom. It’s only natural to wonder: Should I stretch for that larger home in a prime location to potentially capture a slice of the action?

For our clients, we run detailed cost-benefit analyses, tailored to their specific circumstances. For those outside our client base, I thought it would be insightful to share some of the high-level historical data we track, along with some insights on the impact of carrying costs, leverage and timing for added context.

For Jackson HPA, we use historical data from the Teton County Assessor’s office, starting in 2003. This data includes private sales and excludes condos, townhomes and affordable/workforce housing. For market comparisons, we use the annual return of the S&P 500.

In 2003, the median sale in Teton County was $450,000. By 2023, 20 years later, that number had risen to $3,325,000, representing a staggering cumulative increase of 639%, or an average annual growth rate of 10.5%.

In comparison, the S&P 500 grew by 536% over the same period, with an average annual return of 9.7%, closely aligning with its historical performance since 1923.

Below is the year-over-year growth data alongside the S&P500. I also added National (median) home sale data for perspective.

Observations:

• Viewed through a data lens, Jackson residential real estate has seen remarkable growth over the past 20+ years, outperforming national home price averages by a factor of six and even surpassing one of the best-performing asset classes of the last century: U.S. equities.

• Of the 638% cumulative return (10.5% annualized), 2/3rds of the total price appreciation occurred during the pandemic years of 2020–2023, with a 224% cumulative gain (34% annually). A home priced at $1.025 million in 2020 surged to $3.325 million by the end of 2023.

• From 2003 to 2019, the annual appreciation rate was 5.3%— almost double the national average of 3.2% - but far less dramatic than the explosive COVID-era growth.

• Jackson real estate wasn't immune to the 2008 financial crisis. In the four years following the GFC, the median home price dropped from a pre-crisis high of $952,000 to a low of $601,500 in 2012, marking a 36% cumulative decline, or an annualized loss of 11%.

However, home price appreciation alone only tells part of the story, as it doesn't account for two critical factors in owning residential real estate: the cost of ownership and the impact of leverage through a mortgage. Both of these elements are unique to each individual, making broad, macro-level analysis challenging.

Nevertheless, we’ll give it a shot.