2016 STAR VALLEY ECONOMIC AND DEMOGRAPHIC REVIEW 2016 Authors Summary Star Valley has recovered from the sharp market downturn in 2009 when the hard reality of the Great Recession swept though the local economy like a grim reaper. The local economy realized a very slow and marginal recovery until early 2014 when hints of improved economic growth began to emerge. The Star Valley economic recovery continues through today: area population is growing again, unemployment is reaching historic lows at 4.5%, liquidity appears to be increasing, local inflation is tolerable, jobs are available, and real estate prices are increasing. Overall, these indicate a fairly robust and bright local economy. However, there are significant headwinds developing. The clouds are generally macro issues originating outside the Star Valley economy. The State of Wyoming is now feeling the real impacts of the low energy prices and the “war on coal” causing reduced state income and reduced employment as mining activity and rig counts have fallen. The Wyoming state income from mineral activity is directly correlated to local and county governmental jobs and activity given that the state is a primary funding source. Government, which has been a growing sector, is now realizing a reduction as revenues decline. The Federal Reserve continues to communicate a desire to raise interest rates even though European and Asian central banks are now experimenting with negative interest rates. Today, the U.S. economy is showing very marginal growth, with what the Wall Street Journal (WSJ) recently called the “Weakest Recovery Since ’49.” U.S. gross domestic product grew at a seasonally and inflation-adjusted annual rate of only 1.2% in the second quarter, 2016. The WSJ article stated, “Economic growth is now tracking at a 1% rate in 2016 – the weakest start to a year since 2011. That makes for an annual average rate of 2.1% growth since the end of the recession, the weakest pace of any expansion since at least 1949” (Morath 2016). With weakening economic growth comes the increased potential for a future recession. The probability of a national recession within the next one to two years is now very real. The larger commercial construction projects that began in 2015 are now winding down with the final openings of two new motels in Afton and the pending completion of a Latter-day Saint temple this fall. The residential housing market continues to be hot as measured by both the number of new starts and housing prices. With increasing real estate prices as high as 23% in 2016 the authors are increasingly concerned that the residential market may be moving into the "excessive exuberance" stage and overheating. While housing prices are increasing and listing periods are shortening, the residential market, to date, has not experienced the speculative aspect seen in the 2000 to 2007 period. Most homes are being built or sold for owner-occupied purposes, not for rental or flipping objectives. This observation, if true, may indicate that Star Valley has developed a housing inventory issue mainly due to years with little new-home construction where affordable housing for a population of moderate income is becoming harder to find. Star Valley continues to see changes in its population demographics and economic base - with an economic progression that began with agriculture moved toward mining/manufacturing, and now is based on tourism and retirement services. At the same time, the Star Valley economy is growing closer and closer to the Jackson economy with an ever larger part of the work force employed in Teton County. Due to the cost of living in Teton County, the merging of the two areas will continue as more of the area labor force lives in Star Valley. This progression will bring increased income inequality - an issue Star Valley has been relatively free from. Change is inevitable, and our beautiful valley is not immune. The beauty, good people, favorable economic conditions, and small-town American feel of Star Valley almost guarantee future opportunity and a bright future, albeit a little more crowded each year. Whitney Webb Marcus Weber en Special Projects Assistant Vice President President Co-Author Co-Author Co-Author SPECIAL THANKS In order to gain a more complete picture of the economic condition of Star Valley, the Bank of Star Valley relies on many individuals, businesses, and government entities to provide information and data. The Bank wants to express gratitude to those who helped provide the information and data and thank them for their time, assistance, and patience. Lincoln County School District #2 Thayne Senior Center Salt River Senior Center 1st Bank Aviat Aircraft Freedom Arms J.R. Simplot Lincoln County Government Lower Valley Energy Silver Star Communications Polyguard & RMP Mobile Wells Fargo PC Industries Star Valley Medical Center Star Valley Independent Lincoln County Assessor Lincoln County Planning and Zoning Town of Afton Town of Alpine Town of Thayne Town of Alpine Town of Star Valley Ranch Jackson Hole Real Estate Associates Alliance Title Local Landlords Big Country Realty This analysis was a collaborative effort by Whitney Webb, Special Projects Assistant, Marcus Weber, Bank of Star Valley Vice President, and Rod Jensen, Bank of Star Valley President INDEX Demographics ............................................................................................................................................... 1 Population ........................................................................................................................................ 1 Population Composition .................................................................................................................. 8 Education ....................................................................................................................................... 12 55 Year and Older Population ........................................................................................................ 14 Domicile Location........................................................................................................................... 16 Employment/Wages ................................................................................................................................... 17 Earnings by Industry....................................................................................................................... 19 Personal Compensation by Industry .............................................................................................. 21 Per Capita Income .......................................................................................................................... 22 Poverty Level .................................................................................................................................. 25 Average Wage Per Job ................................................................................................................... 26 Unemployment .............................................................................................................................. 27 Area Employers .............................................................................................................................. 30 Employment Advertising ................................................................................................................ 31 Market Liquidity ......................................................................................................................................... 32 Cost of Living .............................................................................................................................................. 35 Inflation ...................................................................................................................................................... 39 State and Local Tax ..................................................................................................................................... 41 Misery Index ............................................................................................................................................... 43 Wyoming Economy .................................................................................................................................... 44 Coal Impacts ................................................................................................................................... 44 Consensus Revenue Estimating Group (CREG) Summary ......................................................................... 46 Real Estate .................................................................................................................................................. 49 Property Taxes for Select Properties ............................................................................................. 49 New Home Construction ................................................................................................................ 50 Utility Connections ......................................................................................................................... 51 Real Estate Transaction Summary ................................................................................................. 52 Residential Home Transactions ..................................................................................................... 53 Building Lot Transactions