All roads lead to positive trends in the Single family real estate market. Yellowstone County has now has had year over year increase in number of sales since February 2012, 13 months in a row. Every category of measurement shows improvement. So what drives the positive trends, employment growth, population growth, and the Federal Reserve’s unwavering commitment to push and keep mortgage rates low. A quick comparison on the power of that policy, at current interest rates (3.57%) the approximate monthly payment with taxes and insurance at the average sales price home is just $1,286 per month, use the average interest rate for the last five years (4.57%) and that payment jumps to $1,435 per month and now for the shocker use the average interest rate since 1971, 42 years of history, (8.64%... 04/13/2013

Does history indicate the future and can we project past norms to discern future trends? Lots of different ways to look at the both the residential sales price market and the price of rentals and their relationship to each other The 1st graph shows the price differential between purchasing a home at the then current interest rate and price and renting an apartment in the Billings area The 2nd graph shows the payment trend at the sales price and interest rate at each year The 3rd graph shows average and median sales prices for each year The 4th graph shows the rent trends each year Using the average interest rate for the last five years (4.57%) at this average sales price this year so far a house payment would be $1435 as opposed to $1286 with current interest rate (3.57%) if you use the... 04/08/2013

  Thought to ponder from peak ownership rate, to today the ownership rate has dropped 3%, based on the time before the explosion in housing it was holding about another 2% lower than it is today. Based sales and on the information below is the glass half empty or half full or is it as full as it most probably going to get nationwide?   30 year pi median sales price 1985  $932---30 year pi median sales price 2013  $1094 median earnings 1985 $17,88 44.79% of the income to  qualify for the payment median earnings 2013 $39,936 85.18% of the income to  qualify for the payment         03/20/2013

Market at a Glance February 2013   We are now two months into the year and the good numbers continue to roll through the housing market here in Yellowstone Count, Inventory lower by 18%, pending sales up by 16%, closed sales up by 24%, new home permits up 61% all outstanding performance for the residential market. The driver for most of this outstanding performance comes from three things interest rate and jobs and population growth.   First let’s talk about interest rates, the Federal Reserve through  buying mortgages and not selling any of previous mortgages has managed to drive and keep interest rates to historical lows, 9.3% below 2012 and 43.52% below where they were in 2006,which was the peak year in sales for Yellowstone County. From to December 2011 to December 2012 the Billing... 03/10/2013

What does recovery in single family new construction look like? When you listen to press you would think that single family new construction Nationally had recovered and is humming along. So I thought it might be useful to see visual as well as number wise where single family new home has been, where it is, then look at the Billings market and compare. 1st the graph below shows Nationally single family permits since January 1st 2005, was the peak year in single family permits nationally. #1 the peak was September of 2005, the single family permits were issued at the rate of 1,798,000 homes per year #2 the bottom was January 2009 at the single family permits were issued at the rate of 337,000 homes per year #3 the average number of permits for the fifty years before the peak, single fami... 02/28/2013

New construction for January Nationally The box below is basically comparing January of 2012 to January of 2013. The new construction market shows improvements straight across the board which is a positive, as always when you are comparing smaller numbers the percentage increase show as huge move. Permits issued show a more positive outlook than the actually starts.   actual total for year permit issued   start of construction     multi single   multi single single sales    2013: Year to Date 65.5 40.5   58.5 39.6 31   2012: Year to Date 46.3 29.9   47.2 33.1 23   year over year + or  - 41.47% 35.45%   23.94% 19.64% 34.78%     The numbers and comparisons below show how well the “recovery’ is actually performing you still see a 62% to 74% drop from the peak and 30% to 46% percent drop fr... 02/28/2013

Market update at glance January 2013 As I sit and review the performance of the market for January and all of 2012, the increase in in unit sales is outstanding, the decrease in market time is phenomenal, the increase in pending sales is a positive trend, yet then I get to price movement and scratch my head. The normal expectation would be with the type of increase in demand indicated by unit sales, the market should experience pretty dynamitic pricing pressure, yet when you look at the pricing data, that does come through the market. So the question becomes, will the market experience a marked pricing movement as we get further into the year and both sellers and buyers gain confidence in the economy of Yellowstone County?  In December of 2012 there were 2060 more people working in Yell... 02/06/2013

01/28/2013

In the child’s fairy tale, in order to save  their lives the tailor’s convinced the King they were weaving his clothes from Gold, of course they could not do that, yet none of the Kings advisors dare mention he had no clothes. When the king went out through  the kingdom in his woven gold clothes that did not exist, it was a child that did have the blinded eyes of bending down to power, that he exclaimed “the king has no clothes”.  So it with housing, the peak was in 2005 we are now in the eight year from the peak.  Single family permits, starts and sales are between  67 to 69% below the peak  and 42 to 49% below the fifty year average. Since I would take the child’s view, I believe the king has no clothes any industry that is running that far below the fifty year average is not recoveri... 01/27/2013

The power of interest rates on purchasing When looking at today’s market concerning interest rates the best perspective is look at the economy in the recent past. Since the economic events of 2008 the Federal Reserve has committed to driving interest rates down to spur sales in the housing sector and the economy in general. In 2007 the interest rate average for the year was 6.34% for a thirty year mortgage, fast forward to 2012 the average for the year was 3.66% or a drop of 42.27%. comparing the median sales over that same period of time the median sales price in Yellowstone county in 2007 was $180,00 fast forward to 2012 and it rose to $197,950 or a 9.97% increase. When you look at the monthly payment including 25% for taxes and insurance, the payment went from $1,397 in 2007 to $1,13... 01/27/2013

Open House Sunday, Jan. 27th form 2-4pm 6610 Cove Creek Dr. Billings MT   $369,900. Incredible 7 bedrooms and 4 full baths with a main floor laundry. Master bathroom features jetted tub, double sinks, double closets, and a large tile shower. Two gas fireplaces, theater room, home is loaded with custom details, crown moldings, tray ceilings, granite & tile   Come on in and see for yourself. Beautiful home with 4067 Square Feet. Well maintained inside and out.  Copper Ridge offers residents increased green space while maximizing privacy.  Winding pathways, far from passing traffic, lead to a multitude of neighborhood parks and playgrounds.        Copper Ridge Homes in Billings MT are located on Rimrock Rd. just past Yellowstone Country Club.  It is only 20 minutes to downtown and the med... 01/23/2013

The IRS today announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes. In tax year 2010, the most recent year for which figures are available, nearly 3.4 million taxpayers claimed deductions for business use of a home (commonly referred to as the home office deduction). The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually. ...       Link to IRS regulation of home office deduction http://www.irs.gov/pub/irs-drop/rp-13-13.pdf 01/22/2013

Year end rental market report this INFORMATION is a composite of over 15,400 SEPARATE ads in 2012 and over 87,000 in the last five years. #1 about 13% fewer units advertised for rent 2012 COMPARED to 2011 #2 about 5% increase in pricing in APARTMENTS for rent 2012 COMPARED to 2011 #3 about 3% increase in pricing in HOMES FOR rent 2012 COMPARED to 2011 #4 the home rental market FOR a three bedroom with GARAGE INDICATES it is cheaper to own than rent. THE AVERAGE RENTAL CHARGE is $1,257 for a three BEDROOM home with a garage.  the AVERAGE MONTHLY PAYMENT for a three BEDROOM with a garage based sales price, 3.35% 30 year MORTGAGE, 25% for taxes and insurance, the monthly PAYMENT is APPROXIMATELY $1,141. i do not BELIEVE THIS will last throughout 2013. the FEDERAL RESERVES policy to buy abo... 01/20/2013

Thought it might be fun to do the ten year comparison for Yellowstone county home sales Soooooooo I thought let’s compare today to ten years ago to today and see what we shall see #1 Population               2002        132,165         vs.     2012     51,814               an increase of  14.86% #2 employment            2002        71,690           vs.     2012     78,672              An increase of  9.73% #3 interest rates           2002       6.54%            vs.     2012      3.66%               a decrease of  44% #4 Average Wage         2002       $28,535        vs.     2012       $41,532           an increase of  45.54% #5 Consumer  CPI         2002       177.7             vs.     2012      231.325            an increase of  30% #6 Sales Price                2002       $138,540    ... 01/08/2013

  RECENTLY WAS READING AN ANALYSIS OF WHAT IS TRANSPIRING IN THE LABOR FORCE ON ONE OF THE GREAT TENANTS THE REASON THE NUMBER OF “NOT IN THE LABOR FORCE IS GROWING IS BABY BOOMERS ARE RETIRING AND LEAVING THE WORK FORCE NOT THAT PEOPLE ARE GIVING UP LOOKING FOR WORK. IF PEOPLE WERE GIVING UP LOOKING FOR WORK THAT WOULD MEAN THE UNEMPLOYMENT RATE IS MUCH HIGHER . Not that I am doubting Thomas, yet I wanted to look the information up myself to make sure that i was not passing along :”bad “ information .   so lets look from 2002 to 2012 to see how it looks       not in labor force 2002 72,279,000 vs. 2012 89,455,000 an increase of 16 million   employed 55 years or older 2002 19,980,000 vs. 2012 29,474,000 an increase of 10 million   population 55 years or older 2002 59,422,000 vs. 2012 81... 01/08/2013

I always marvel at the lack depth of the questions main stream media. For 2012 all the talk about the “recovery” of the new construction single family sales market. Soooooooo I thought let’s compare today to ten years ago to today and see what we shall see #1 employment   2002     130,341,000     vs.     2012           133,238,000        an increase of  2.29% #2 interest rates  2002     6.54%                   vs.     2012           3.66%                   a decrease of  44% #3 Average income    2002      $31,899      vs.     2012           $42,503            an increase of  13.62% #4 Consumer  CPI       2002    177.7             vs.     2012           231.325                an increase of  30% #5 Sales Price new SF    2002    $185,025    vs.     2012           $239,636        an increa... 01/07/2013

Market Update at a glance December 2012 We are now through the year and the good numbers continue to roll through the housing market here in Yellowstone Count, Inventory lower by 23%, pending sales up by 24%, closed sales up by 18%, new home permits up 80% all outstanding performance for the residential market. The driver for most of this outstanding performance comes from three things interest rate and jobs and population growth. First let's talk about interest rates, the Federal Reserve through buying mortgages, has managed to drive interest rates to historical lows, 15.4% below last December and 36.67% below where they were in 2008. From to November 2011 to this November we added 1260 payroll jobs and population has increased approximately 1450 people. Lots of positives in the econom... 01/06/2013

New home contuction continues to show improvement as the genral housing market does. the question is what happens whne the fedral reserve takes away the sugar high of low interst rates. whith rates where they are basically the federal resrve has lowered the interst cost by about 47% since 2007. With that type of boost sales are still 40% below the fity year average which indicates some underlying problems yet to solve .h       actual total for year permit issued   start of construction     multi single   multi single single sales   2012: Year to Date 746.4 478.0   719.9 496.9 338   2011: Year to Date 562.0 384.9   566.2 399.6 282   year over year + or - 32.81% 24.19%   27.15% 24.35% 19.86%     seasonally adjusted             permits issued       permits issued total   one unit structure... 01/05/2013

01/02/2013

Market up date at Glance through November 2012 Noise, Noise, Noise……. As I sat down to review this months & year to date information, the election ads got me to thinking about all the misleading information you need to sort through to understand the underlying direction of housing within our market place. So first, just a brief diversion into the noise. Of course I mentioned the election, then we have the “fiscal cliff”,  the  “national debt”, taxing the “rich”, the stock market gyrations, the European union and  Greece, Spain, Portugal or Italy’s mess, China’s exports and buying our debt, last but not least global warming. The point is not that any of the above may not be important, the questions to ask is whether they are important to what happens to the local housing market. When boi... 12/07/2012