“You pay for the house, but the land is free.”

That’s one way of looking at the current market conditions in Driggs & Victor.  The purchase price of many of these homes is equal to the cost of the materials used in the construction, but absent are any consideration for the the land itself, and of course the profit for the builder!

Imagine buying a 4-bedroom, 4-bathroom house made of pine and stone for less than the price of your crummy 1-bedroom condo in Toronto…

On my very first day at the golf course, I asked my local real estate contact, Natalie, how much the house pictured above was selling for.

She said, “Well it’s under contract right now.”

I nodded my head, “Right,” and then paused for a moment while I tried to understand what the heck that meant.

I said, “You mean you have it listed for sale?”

She replied, “No, it’s under contract; there’s a deposit and everything.” In actual fact, she used a different term for “deposit” that currently eludes me, but that’s not the point.

I asked, “You mean it’s sold?”  And she replied, “No, it’s not gonna close till October.”

Eventually, a light-bulb went off over my head, and I realized what she was talking about.

In our Toronto real estate market, we consider a property “sold” as soon as both buyer and seller put pen to paper.  Even when a property is sold conditionally we still assume 99 times out of 100 that it’s as good as gone.  Financing, Home Inspection, Status Certificate – it doesn’t matter, since we know the deal will firm up, and eventually close.

When a deal does firm up, we never give it another thought.

Natalie asked me, “Don’t you have any deals fall apart in Toronto?”  I told her, “Not a single one in my six years in the business.”

You see, in the rough-and-tumble markets of Victor and Driggs, you’re lucky to even have an offer.  When you receive a $4,000 “deposit” on a house listed at $599,000, that’s enough to tie up the property until you’re scheduled to close in October.

When Natalie said, “It’s under contract,” she meant that it was sold or contracted to be purchased.  But to get from offer to sale, you have to get financing first, which is the real tricky part in the United States right now.  There is more than a 60% chance that this deal will not close in October.  That’s why nobody really takes these “sales” seriously until the monies have changed hands, and the moving trucks are pulling into the driveways.

How desperate are the owners of these gorgeous new houses that line the side-streets of Victor, Idaho?  Well how many times in Toronto have you seen a banner with the price like the property pictured below:

This vacant house sits just off the par-four, 7th hole at Teton Reserve Golf Course in Victor.

It’s absolutely spectacular, and once-upon-a-time, it might have fetched a million-bucks.

But that was then, and this is now.

And Victor, Idaho is in serious trouble.

Look at the photo below:

Here is a century-old brick building on Main Street right in the heart of town that is available for lease.

But look closer and see where it says, “Summer 2008.”  That means that this sign has probably been up since late 2007 (and it also means that the owner has no clue how to market this property, since keeping this two-year-old sign up is like shouting, “I couldn’t lease this property to save my life!).

All of Main Street in Victor, Idaho is lined with “For Lease” signs in the windows of stores, retail/commercial outlets, or even the vacant land that is available like the one below:

I took a drive the other night down 500 South in Victor and up into the mountain-side.  I noticed probably 20-30 “For Sale” signs next to houses or vacant land, and I saw a few of these as well:

Here is a half-built house that sits in its current condition and will likely do so for quite some time. 

I heard through the rumor mill that the number-one crime in Victor and Driggs is arson, since many builders or speculators are torching their developments in search of insurance settlements.

I really feel bad for these people!

Both vacant land and beautiful, never-lived-in houses are readily available for purchase in unfathomable quantities.

So who would be purchasing these properties?

Well, in my post on Thursday I described just a few activities that I’m partaking in during my week down in Idaho and Wyoming.  Everybody vacations, and some people own vacation homes.

Despite the low-low prices of properties in Driggs, I’m not advocating that everybody I know back home should go out and spend $300,000 on a home they’ll use for three weeks per year.

But I am surmising that the properties in Driggs and Victor will NEVER be more affordable, and there are investments worth looking into.

If you’ve got a “nest egg” tucked away, and you’re willing to lock into a so-called “twenty-year-plan,” then perhaps vacant land is up your alley.  The kind old man at the knife store in Jackson was telling me that he paid $50,000 for 12-acres in Driggs in 1995 and he was recently offered $800,000 for it.  Not a bad little return, eh?

The only downside to owning vacant land is the lack of satisfaction that comes from owning essentially nothing.

I trekked up the mountain-side in search of the land that my father owns, and after an hour of driving up and down windy roads where there is no rhyme or reason to the numbering, I found it, and took this photo:

Yes, there is Lot 24 and Lot 25 in Shooting Star Ranch on Canyon Creek Road.  It’s a beauty!

So what are current prices like?  Well how about this plot of land pictured below:

This is 9-acres in Tetonia just north of Sky View Ranch for a paltry $70,000.  Taxes are a whopping $100 per year.

So if purchasing vacant land is a tedious “long-term” play, then what is available for immediate gratification?

Here is a recent photo of a few houses in the Teton Springs neighborhood:

47 Scott Drive is a brand-new 3-bedroom, 4-bathroom house of 2,742 square feet located just steps from the Teton Springs Golf Course.  The house has never been lived in, has every interior upgrade imaginable, and is constructed of gorgeous timber and has a cedar-shake roof to boot.

The price?

How about $305,000.

Or, if you want to play hardball with the owner (undoubtedly a bank), perhaps you could pick it up for $290,000?

I just sold a 620 square foot, 1-bedroom condo on Lower Simcoe Street in Toronto last week for $315,000.

The price comparison astounds me!

How about this house below:

110 Moulton Lane is listed for $335,000 and is a 4-bedroom, 4-bathroom house of 3,307 square feet.

The home features granite-slab countertops (3-inch thick granite, not like what we see in Toronto condos), oak hardwood flooring, travertine tile, Alder wood cabinetry, stainless-steel kitchen appliances, jetted-tubs, cathedral ceilings, cedar-shake shingles, landscaped yard with sprinkler-system, surround-sound speakers, wooden-back-deck, and a dramatic two-sided floor-to-ceiling stone fireplace that separates the kitchen and living room.

And that’s just what’s included in the listing!

There is a two-car garage that measures 581 square feet (roughly the size of my condo!), but unfortunately, no horses are permitted in the backyards as per local rules.

I know what some of you are thinking: “How or why are you comparing real estate in Toronto to that of Driggs, Idaho?”

Some of my astute readers will probably send me listings for 4-bedroom houses in Detroit that are $100 plus back taxes.

Well, it is my contention that Victor and Driggs, Idaho are as close to paradise as you can possibly come.  Detroit is a bankrupt ghetto that has seen its share of busts and booms in the last hundred years and whose success or failure is critically linked to the automobile industry.  We all know how that turned out!  On the other hand, Driggs is a relatively unknown western mountain town where the sun shines every single day in the summer, and where Grand Targhee Ski Resort is home to the best snow in ALL of North America in the winter.

Driggs and Victor have seen their real estate “boom,” but the crash hit twice as hard.

Now as the towns are trying to pick up the pieces, insolvent investors are losing 70-80% of their money while new investors reap the rewards.

I’ll be back in Toronto on Saturday afternoon, and I’ll be back in the rat-race with the week I spent in Driggs, Victor, and Jackson all but a distant memory.  I played golf six times, took three hikes, jogged into the mountains, went horseback riding twice, took in a rodeo, saw live folk music in the town square in Driggs, watched a small production of “Grease” in Jackson, and played with the neighbor’s dog every single day while drinking coffee and sitting on my porch just staring into the mountains.

I didn’t even have time to go fly-fishing, rafting, or travel up to Yellowstone National Park.

Mark my words: ten years from now, Driggs will be on the map, and the millionaires will all vacation here.

Those “woulda, coulda, shoulda’s” are always apparent, but who has the money, and who has the foresight and risk tolerance?

Those that do will thank their lucky stars.

And every night in Driggs, with not a cloud in the sky, there are hundreds upon hundreds of stars to thank…

Special thanks to my golfing-buddy, Natalie Marlowe, who spent several hours showing me real estate here in Idaho and giving me access to hundreds of online listings.

Natalie Marlowe
Sage Realty Group
189 N. Main Street, Ste 100
Driggs, Idaho 83422
nm******@****rg.com