Looking at trends in pricing over the past few years it got me to wondering about why with a 16% drop in interest rates from 2011 and a 47.1% drop from 2007, what was the makeup of the factors causing  a 3% rise in price from 2011 and a 3% rise from 2007 when size is factored in, or said another way based on size,  prices in 2007 and 2011 were identical even though interest rate environment was radically different from 2012 and in theory that differential should produce more pronounced changes in price movement. So that leads to the question how have the  price ranges performed in terms of sales. In looking at the information below my interpretation is,  credit standards  have greatly affected the lower portion of the market and somewhat in the higher end, in buyers ability to obtain mo... 12/06/2012

Thoughts to ponder for Real estate in Yellowstone County 2011 to 2012 Residential sales, number of units up 20% Inventory, number of units,  down by 21% Price, considering size, up solid 3% Interest rates are down 16% Number of employed in Yellowstone county is up 2.4% Number of three bedroom homes w/garage for rent down 12.22%   2008 to 2012 Residential sales, number of units up 1.5% Inventory, number of units, down by 34.73% Price, considering size, up solid 1.5% Interest rates are down 44.9% Number of employed in Yellowstone county is down .09% Number of three bedroom homes w/garage for rent down 12.59%   Given the facts above and the graph below which will be the future of sales and pricing in residential sales for 2013 Do the number of sales of homes rise or fall? Does the sales pr... 12/02/2012

Just want to  wish everyone a happy thanks giving day 11/21/2012

Market up date at Glance through October 2012 Solid gains in price movement, closed sales, pending sales and reduction in inventory. So as I look at the numbers below the question comes to mind has the mix of sales affected the sales price and if so why. The short answer is yes it becomes most self-evident if you look at the size of selling this year 1st going back to 2008 houses sold are  7.89% bigger yet you are only paying  4.79% more in grossing selling price . If you look at payment with interest rate in 2008 the average sales price would have cost principal and interest $1251.46 a month where today your monthly is only $968.28. The magic of interest rate means you are buying a bigger more expensive home yet it cost you 22.62% less than in 2008. My perdiction would be as long as th... 11/07/2012

AS THE ECONOMIC CYCLE CHANGES, THE QUESTION COMES TO MIND, HOW  ARE WE DOING AS COMPARED TO PAST YEARS PERFORMANCE , HOW FAR CAN  HOME SALES AND RESIDENTIAL BUILDING RUN Since 2006 which was the peak in residential sales and 2003 was the peak in permits for new construction we have been in a wild ride, first a market driven by first time buyers tax credits 2009, then a market driven by a tax credit to anyone that bought a home 2010 and now a market driven by historically unheard of interest rates the low 3’s for 30 year and the mid 2’s for 15 year mortgage money, yet with that low cost money have come much tighter requirements to qualify for a loan and a financial collapse. So I guess the question becomes is there such a thing as a “normal” market? My belief is that we have a market dri... 11/01/2012

Lending institutions are require to report activity under “HMDA” this does not of course cover all activity within the market place, yet produces some interesting information to ponder 2005  you had 11,672,852 loan applications  versus 7,382,012 loans received or a  63% success rate for completing a loan 2011 you had 3,816,222 loan applications  versus 2,416,874 loans received or a  63% success rate for completing a loan From 2005 to 2011 you have a drop of 67.3% in loan applications and a 67.25% drop in loans received Using the information from Data Quick that shows home sales in 2012 up 14.6% from a year ago would mean 2,769,737 loan received  and still showing a drop of 62.48% from the peak in 2005 So the thought to ponder ………….. the “HMDA” is not produced by a cheer leading group an... 10/29/2012

  I asked myself since the year 2000, twelve years ago, does it cost more to buy a home now in Yellowstone County. Several things influence the answer to that question, the absolute price of the home, the taxes and insurance, the interest rate, and inflation since that time and wages.  I went back and took the median sales price of each year, assumed 100% financing at the Freddie mac rate for that year, and then used 30% of the payment to approximate the yearly taxes and insurance. Below are the graphic results and the main numbers. Consumer price index                     2000      172.2                   2012      231.4                   prices up              38.9%   Freddie mac interest rate             2000      8.05%                  2012      3.6%                    interest down... 10/27/2012

intersting information from the labor bueara comparing the spending patterns of owenrs and renters 10/26/2012

  Always in the year of first upward movement from a decline you see what appears to outsized gains in a percentages rise, and that is what you see in permits, in sales, and the total of single family combined with multifamily permits, yet to give a little perspective, on a national basis it is estimated that we destroy about 200,000 housing units a year, so the net effect is an increase of 694,000 housing units added to supply. When you think about the drop still between 70 to 60% from the peak  and  35 to 43% from the fifty year average total performance of the new housing construction is still less than sterling. Another perspective would be to compare it to  your income, if in your peak your before the recession/economic event  your earned $100,000 a year and now seven years later y... 10/24/2012

  Market at a glance September 2012   We are now three quarters through the year and the good numbers continue to roll through the housing market here in Yellowstone Count, Inventory lower by 26%, pending sales up by 26%, closed sales up by 19%, new home permits up 81% 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 their “operation twist”, selling short term bonds and buying mortgages and a new commitment to buy 40 billion of mortgages a month and is now buying about two thirds of all new mortgages in the United States, has managed to drive interest rates to historical lows, 15.6% below 201... 10/09/2012

Market at a glance august 2012 We are now two thirds through the year and the good numbers continue to roll through the housing market here in Yellowstone Count, Inventory lower by 34%, pending sales up by 48%, closed sales up by 21%, new home permits up 77% 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 their “operation twist”, selling short term bonds and buying mortgages, has managed to drive interest rates to historical lows, 15.7% below 2011 and 44.5% below where they were in 2008. From to July 2011 to this July we added 500 private payroll jobs and population has increased approximate... 09/10/2012

GOOD NEWS IS GREAT, UNDERSTANDING IS BETTER, HERE WE ARE THROUGH JULY AND THE NUMBERS YEAR OVER  REMAIN  IMPRESSIVE ON RESIDENTIAL BUILDING. THAT IS, IF YOU DID NOT LOOK AT THE HISTORICAL PERSPECTIVE. IN ANY INDUSTRY, THAT SIX YEARS FROM THE LAST PEAK, WAS STILL RUNNING 63 TO 71% LESS THAN THE PEAK AND 41 TO 52% OFF THE FIFTY YEAR AVERAGES, NO ONE WOULD EVER BE DESCRIBING THAT INDUSTRY AS RECOVERING. JUST ASK YOU SELF WHAT WOULD OTHER INDUSTRIES LOOK LIKE IF THEY WERE STILL OPERATING AT THOSE LEVELS? THE STOCK MARKET IN THOSE TERM,  THE DOW WOULD RANGE  5204,THE S&P WOULD RANGE 576, THE NASDAQ WOULD RANGE 1691, GOLD WOULD RANGE 701, OIL WOULD RANGE $52 A BARREL, TOTAL EMPLOYMENT WOULD RANGE AT 51,000,000, UNEMPLOYMENT WOULD RANGE AT 22%, SO THE QUESTION TO PONDER WHO IS TRYING TO FOOL W... 08/23/2012

  Market update at glance July 31st 2012   Dichotomy of the market place ----- my best description for our market so far this year.   The positive numbers in all categories at the end of July can only be described in superlatives,  closed sales up 18%, pending sales up 43%, inventory down 34%, time on market down 14%, single family permits issued by the City of Billings up 77%, number of rental available down 17%,  interest rate on a 30 year fixed rate 3.55% down 21.9% from a year ago, monthly payment to purchase the average priced home in Yellowstone  County down 22% from five years ago, the payment to purchase a home less than renting a home. Now for the dichotomy, price movement. While positive, up about 2.5% from a year ago, considering demand from an economic stand point, with the ... 08/11/2012

MARKET UPDATE AT GLANCE JUNE 30TH 2012 A YEAR HALF OVER, SO THE QUESTION BECOMES, IS THE GLASS HALF FULL OR HALF EMPTY IN YELLOWSTONE COUNTY? FIRST LETS START BY LOOKING AT THE POSITIVES--- CLOSED SALES UP 19%-- POSITIVE, PENDING SALES UP 37%-- POSITIVE, INVENTORY DOWN 34%-- POSITIVE, PRICING UP 2% Y O Y WHEN COMPARING SIZE AND PRICE-- POSITIVE, TIME IT TAKES TO RECEIVE AN OFFER ON PROPERTIES THAT SELL DOWN BY 15%-- POSITIVE, ABSORPTION RATE OF ALL THE INVENTORY 141 DAYS (DOWN FROM 259 LAST JULY)-- POSITIVE, NUMBER OF SINGLE FAMILY PERMITS ISSUED UP 72%-- POSITIVE, NUMBER RENTALS AVAILABLE DOWN 11%-- POSITIVE, FREDDIE MAC 30 YEAR MORTGAGE RATES  3.68% (DOWN FROM 4.74%) POSITIVE I WOULD  VENTURE THE GLASS IS MORE THAN HALF FULL AND THE RESIDENTIAL REAL ESTATE MARKET IN YELLOWSTONE COUNTY... 07/08/2012

actual total for year permit issued   start of construction     multi single   multi single single sales  2012: Year to Date 305.2 201.0   289.8 202.6 154 2011: Year to Date 232.2 167.3   228.6 168.3 130 year over year + or  - 31.44% 20.14%   26.77% 20.38% 18.46% seasonally adjusted             permits issued       permits issued total   one unit structure       includes multi family permits issued   494     780                 peak year   1682     2219   permits % drop from peak   71%     65% 50 year average   911     1383   permits % drop from 50 year   46%     44%               movement up from Bottom 353 40%   522 49%                 housing started       starts total     one unit structure       includes multi family starts    516     708                 peak year   1611     2357 ... 07/01/2012

End of May, another month through 2012. The market is moving substantially faster than what I expected, I truly believed that it would take till late summer to have the real positive improvement in numbers and then nothing like we have seen to date.  All the numbers are stand outs, so I will comment first on price movement. When you look at the  both the average and median selling price it appears the market is really making a movement and it has, yet not quite as big as it appears on the surface the “REAL APPRECIATION” YEAR OVER YEAR BASED BOTH ON PRICE AND SIZE IS A GOOD SOLID 2%. Reviewing the numbers below you can see the market has turned in all categories. This does not mean all the sudden that sellers have the upper hand in negotiations, but it does mean we have left the “buyers”... 06/14/2012

Thoughts to ponder Looking at the information from Gallup on consumer spending comparing before the great recession and financial collapse in the fall of 2008, the 14 day rolling  average of consumer spending to 2012,  consumers report that they were spending 15.9%  and 21.64% less than in January and May respectively in 2012 as compared to 2008. Looking at the bottom in 2010 consumers report that they spending 5.7%  and 11.76% more respectively  in January and May 2012 as compared to 2010. According to the  bureau of labor statistics from  consumers prices have risen 4.46%  and 5.53% January and May respectively comparing 2010 to 2012. Sooooooooooooo the question becomes are consumers spending more and buying less? Or are we recovering less and enjoying it less?   Gallup Daily: U.S. Co... 05/27/2012

The April new construction numbers are in, for the national construction business, and on a year over year some positive trends no doubt, also the trends movement from the bottom are positive, but you have a nagging feeling that all is not well in the construction business. When permits, starts and sales are off between 45 to 52% from the 50 year average, the industry as a whole still has some pretty serious challenges. Since the peak year was back in 2005 and the time span is now seven years, as business picks up there will be challenges in finding knowledgeable capable works in all phases of the business, similar to what happened in the oil business when the price plummeted and stayed down so long. The major difference in the building business will be whether it can produce wages high... 05/26/2012

Another month and a third of the way through 2012. The market is moving faster than what I expected, I truly believed that it would take till late summer to have the improvement in numbers that we are seeing.  All the numbers are stand outs, so I will comment first on price movement. When you look at the  both the average and median selling price it appears the market is really making a movement and it has, yet not quite as big as it appears on the surface the “REAL APPRECIATION” YEAR OVER YEAR BASED BOTH ON PRICE AND SIZE IS A GOOD SOLID 2%. Reviewing the numbers below you can see the market has turned in all categories. This does not mean all the sudden that sellers have the upper hand in negotiations, but it does mean we have left the “buyers” market where the buyer had the upper han... 05/05/2012

  Here we are at the end of the March, ending the first quarter. Time flies when you are having fun, the first two months behaved like I expected, pretty much a slog, then March came. It behaved like someone turned on the faucet. The market has gone from where buyers definitely had the upper hand in negotiations to a balance in the market place, where neither buyer nor sellers have more power. The first thing that happens as this change takes place, buyers resist, and continue along the same path of low offers and asking for the world, only with the change, sellers with properties in decent condition and reasonable location don’t have to accept and can respond in a reasonable fashion and get their property sold.  The positive from the buyer’s side they can feel more comfortable that the... 04/10/2012