Median Existing Single-Family saw their largest annual gain in more than seven years in the first quarter of 2013. The median home price rose from $158,600 to $176,600, a gain of 11.3%!

“The supply/demand balance is clearly tilted toward sellers in a good portion of the country,” said NAR Chief Economist Lawrence Yun. “Inventory conditions are expected to remain fairly constrained this year, so overall price increases should be well above the historic gain of one-to-two percentage points above the rate of inflation.  If home builders can continue to ramp up production, then home price growth is expected to moderate in 2014.” - See more at: http://www.inman.com/2013/05/09/home-prices-post-highest-gain-in-over-7-years/#sthash.KboECc0L.dpuf

Great news right! Not so fast…

Some dark shadows are brewing on the real estate horizon. Looking at who is leading the recovery, the rate at which the market is recovering, and the future governmental programs all paint a picture a little different than the major headlines.

This market boom is being spearheaded by investors. Seeing the low interest rates in conjunction with the depressed home prices, investors are able to move with more assurance and speed then the average home buyer. Once prices rise, many of these investors will pull back—leaving a hole in the market again.

"These days, I worry more about the economy hurting housing than housing hurting the economy," said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, a Washington D.C.-based think tank. Employment is intimately integrated with the housing market and hiring has slowed since March—the weakest growth since last June. Discouraged workers are increasingly leaving the workforce hinting that the housing market recovery will being slowing more and more. Once the jobs market improves, there will be a direct surge in the housing market once more.

Governmental cuts, $85 billion, will be hitting their peak this summer. The cuts will hit the gut of the American workforce since workers comp, military spending, the expiration of payroll tax breaks, and other pieces will all contribute to overall loss of income—impacting the spending capabilities of many families.

http://money.cnn.com/2013/04/18/real_estate/housing-recovery/index.html

Related: 5 best markets to buy a home

 Related: Was your home a good investment?

We are a community, joined together by schools, jobs, our love of the outdoors and the sharing of the services and amenities our great town has to offer.  However, we are separated in groups as we choose to live in subdivisions and neighborhoods.  I frequently find myself in a similar conversation with people new to the area.  From these conversations, I have found that the average buyer has several parameters they look at in choosing location.  Generally, the factors are price, convenience, and individual amenities of a particular home and neighborhood.   So, I thought it would be helpful to peer into some of our wonderful neighborhoods. 

I chose to evaluate Valley West first because we recently moved and call this neighborhood home.  We were drawn to the neighborhood early in its development because of the park, lake and architectural interest and diversity.  Since moving here, I realize just how convenient it is.   My third grader walks or rides his bike to school.  My teenagers drive to the high school in 6 minutes (so I am told).  Four groceries, a fish market, banks, gas stations and the mall are all within a short bike ride or up to a four minute drive.  I am also 4 minutes from my office, which comes in handy when I’m late for dinner.

Valley West offers traditional and contemporary architecture, condos and single family residences with or without attached dwelling units.  Small lots encourage neighbors to congregate in the park to get to know one another, play with their kids and walk their dogs.  Kids meet at the park to play tag and tube on the creek.  Common walk areas were designed to “flow” through the neighborhood, providing a safe and natural connection to the community.  Groups frequent the pavilion in the summer and gather for ice skating at the pond in the winter.

The neighborhood’s residents’ life stages are diverse, ranging from the college student renting an ADU to retired individuals investing their lives in the community.  Therefore, several property choices are available.  Currently on the market are 5 condos ranging in price from $143,000-$239,000 and an average price per square foot of $132.00.  There are 7 single family homes on the market, including 4 existing homes and 3 new constructions.  The prices range from $234,900 - $499,500, with an average price per square foot of $150.00.

In the last 6 months, 7 single family homes have sold, ranging in price from $184,000-$485,000.  The average sold price per square foot was $142.00.  Ten condos have sold, ranging in price from $144,750-$261,250.  Of the sold condos, the average price per square foot was $111.00. 

This is a series that will continue with blogs and newsletters.  The next article in the series will feature Harvest Creek.    If you would like to share your perspectives, I would love to include them in future articles.   If you would like to hear about a particular neighborhood, email me and I will be happy to include it.

 ATHOMEINBOZEMAN

The American Dream has at its core the idea of home ownership.  The dream, according to CNBC-All-American Economic Survey, is being acknowledged more and more. 79% of Americans believe home ownership is the essential piece of the American dream. 69% of Americans think owning is more advantageous to renting. Home ownership is regaining the confidence it had in re-recession times.

“The housing numbers are all heading in the right direction,” reports Diana Olick for CNBC. “Home prices up, foreclosures down and, perhaps the most important, consumer confidence in housing is swelling.” 

The one demographic that still seems to be the unknown element within the market is that of the first-time home buyers. There is a surge in first-timers looking for their first home, but they are highly dependent on their low down payment financing, and that may cause a plateau of actual home purchases. What are your predictions?

READ ON:

Parents as Kids’ Mortgage Lender

More Reasons to Buy v. Rent

People Are Becoming More and More Confident in Housing Market

Home Ownership and the American Dream

 ATHOMEINBOZEMAN

Companies from Bozeman to Billings have seen an uptick in investing in working ranches. Cattle prices are good and the prospect of the global world developing a stronger middle class only speaks of the demand for cattle to increase in the future. Grey Fay, a Bozeman-based real estate businessman, “sees the interest in ranch purchases as a play by American billionaires to add a tangible, low-return investment to their portfolios with the idea that land values have bottomed out and could appreciate considerably in the future.” (http://billingsgazette.com/news/state-and-regional/montana/ranch-sales-rise-as-wealthy-investors-put-cash-in-land/article_c0b70ee3-2e86-5a23-83f3-81e1eb281b5a.html)

Seeing the investment: 

In 1972, a ranch could sell for $36/acre. In 2011, that same land sold for $500/acre. Even accounting for the inflation of the dollar through history, the land has doubled in value. Amenities on ranches extend beyond the utilitarian use of the land. Wildlife habitat, fishing, scenic views, and other nontangibles are spiking in value on top of the solid financial endeavor of running a ranch. Few investments are as secure as property and few property investments are as secure as one with the multiplicity of profitable uses as a ranch.

How does this inform Montanan values?

Places to hunt, fish, spend quality and semi-isolated time with family and friends are all strong central values of Montanans at large. With the city centers of Montana growing rapidly, the return to where Montana started speaks of how deep these important land and family ethics run. Time on a ranch is hard work and togetherness.

Future….

Trusting this strong market entirely is a bit naïve so those monitoring the market ought to remain skeptical. Fay sees ranch prices as bottomed out, but not yet appreciably rising making this moment in time as a good time to buy. Tomorrow, who knows… All that can be said is that there are “excellent opportunities everywhere right now.” (http://billingsgazette.com/news/state-and-regional/montana/ranch-sales-rise-as-wealthy-investors-put-cash-in-land/article_c0b70ee3-2e86-5a23-83f3-81e1eb281b5a.html)

 ATHOMEINBOZEMAN

People, especially those who are thinking of selling, are eying the market with calculated hesitancy.  They are waiting to see by how much home prices will appreciate before they commit to the decision and plunging into the market for themselves.

Oddly enough, the time to decide may be based on when they purchased their home rather than watching the current market like a hawk. If your home was purchased during the sluggish market in the last few years, moving up in 2013 is their prime opportunity.

"Because they bought near the bottom, these home owners should have built up some good equity that can go toward the purchase of a new home, and waiting longer to build more equity likely won’t provide much advantage given that other homes that they might want to move up to will also be appreciating at roughly the same pace," Blomquist, vice president of RealtyTrac, told HousingWire.

Home owners who wait much longer may miss their chance by being overly cautious. If you are looking to sell and then buy, waiting for prices to rise because there is no ultimate benefit. They will get more out of their home, but turn around and spend more too. In addition, the costs of financing your next home may increase in the months to come since mortgage rates are anticipated to rise from their current 3.5% to 4.4%... The time to sell may be now or else you may miss the boat...

Read more:http://realtormag.realtor.org/daily-news/2013/03/25/home-owners-who-are-delaying-selling-may-miss-out?om_rid=AACuz5&om_mid=_BRUHT7B8xiPzNw&om_ntype=RMODaily

 “The Time to Sell Is a Waiting Game for Some,” HousingWire (March 21, 2013)

Home Owners Reluctant to Sell; Inventories Fall
 

 ATHOMEINBOZEMAN

Home inventory is reaching its lowest point since 1999. This is stabilizing home prices in many markets, and since buyer traffic is continuing to pick up, multiple offers and bidding wars are going to become the common state of things. Many sellers still remain underwater while buyers are ready to buy, causing the housing inventory to continuously shrink. Currently, there is a 4.2-month supply of existing homes for sale, down from January’s 4.5-month supply, according to data from NAR.

“Buyer traffic is continuing to pick up, while seller traffic is holding steady," Lawrence Yun, the National Association of REALTORS®’ chief economist says. "In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We've transitioned into a seller's market in much of the country."

Buyers and sellers alike are finding themselves in better positions then they found themselves at last year at this time. Price gains are being counter-balanced by low mortgage rates, and it is shifting to a seller’s market…. But it is not all good news.

Read More

Seller's Market Developing in Much of the U.S.
25 Quick, Cheap, and Easy Home Sale Tips

 Will housing market's revival last?

Housing heats up, but far from normal

 ATHOMEINBOZEMAN