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Nationally and At Home In Bozeman: Building Rates Accelerate

by Tim Hart

At Home In BozemanBuilders breaking ground so far in 2013 are moving at a pace not seen since 2008! Experts are predicting a promising year ahead on the wave of late 2012 & first month solid numbers for 2013. Housing starts soared at 12.1% for December. The majority of the jump was attributed to a 20.3% increase in multi-family construction but even looking at single-family home starts, they rose 8.1% in that same month.

"With inventories of new homes at razor thin levels, builders are moving prudently to break ground on new construction ahead of the spring buying season to meet increasing demand," says Barry Rutenberg, chairman of the National Association of Home Builders. (http://realtormag.realtor.org/daily)

The best indicator for future markets, permits for future home building, rose in December as well proving this trend is set to continue for at least the foreseeable future!

Here at Bozeman Montana Real Estate, we have, in January alone, written five contracts on new construction pre-solds! Call us today (406.570.5730) to find out how we do business and if right now it is the time for you to explore getting into the possibility of buying a newly constructed and customized home!

 ATHOMEINBOZEMAN
 

Year to Year Outlook for the Gallatin Valley

by Tim Hart

The Year in Review:

Year to Year Outlook for the Gallatin Valley (Big Sky, Bozeman, Belgrade, Three Forks and Manhattan)

Stats for Improved Properties:

  

* Data is for period Jan 1 – Dec 31 – includes all improved categories except for mobile/manufactured.

Summary of Data for Improved Properties:

  • Bozeman is a shining star without a doubt up 222 units over 2011 with days on market down almost 20 days and median price rising by $10,000.00 plus.
  • Belgrade also picked up some steam up 8 units and median price up by $10,000.00  - this trend has continued into the new year
  • Big Sky is still stabilizing – units sold are down but median price improved by $20,000.00 and days on market shrinking
  • Manhattan is stable in units sold and $27,000.00 increase in median price
  • Three Forks has also gained ground after stagnating  – units up by 13 – but median price is down and days on market up

Stats for Vacant Land:

* Data is for period Jan 1 – Dec 31  – includes all land categories.

Summary of Data for Vacant Land:

  • More of the same for Bozeman in land with net increase of 234 units year to year
  • Belgrade is down about 5 lots
  • Big Sky is more positive than negative – up 20 lots – median is down but I see this as positive – sellers are getting more realistic about their land values and deals are closing successfully.
  • Manhattan improved in lot sales – prices are down
  • Three Forks is a negative trend  BUT both lot and house sales are now trending up in the first quarter of 2013 as Three Forks is being seen by many first time buyers as an affordable alternative.  I am bullish on Three Forks for 2013!  Our office, alone, will be representing developers in three large sub-divisions – activity is brisk!

Overall, the Gallatin Valley is seeing great growth with Bozeman being the shining star and booming.  I am fairly confident that this report at the end of 2013 will likely see all indicators turning to positive.

 

 ATHOMEINBOZEMAN

 

Unpredictable Predictions

by Tim Hart
The Wall Street Journal had a headline that did its job and grabbed my attention this morning: (http://blogs.wsj.com/developments/2013/01/22/the-year-everyone-was-wrong-again-about-home-prices/?mod=WSJ_3Up_RealEstate) The Year Everyone Was Wrong (Again) About Home Prices. This statement makes everything I have ever written in a blog is all of a sudden being challenged. Accepting the challenge I read on…

Predictions are vague estimations of what people who study a specific area think may happen. Looking back retro-actively at the predictions made is sometimes an event of true comedy. For several years now experts who have studied trends, analyzed data, and put their own intuition into predictions have said the housing market will reach its bottom. Instead, what has happened is a great recovery in 2012 and rising, record breaking numbers to kick of 2013. After their predictions being so wrong for 2012, what are these same experts saying about 2013?

Home prices are estimated to rise this year with the median forecast of a 3% gain. Joel Naroff, president of Naroff Economic Advisors, is so optimistic to say that he predicts a 7.2% gain and that prices could rise 39% above the current market value by 2017.

What do all these predictions mean to people who are looking to buy/sell. The reality is that although I will always encourage clients to read the news and stay up-to-date on the national economy, real estate is a hyper-local venture. Talk to a Realtor and see what the stats are in your area and get a feel for the reality behind the predictions.

 ATHOMEINBOZEMAN

 

Decreasing rates of foreclosures is a positive trend for home owners at large, but shifting trends result in a shifting reaction within the real estate market. The first result from the decreasing inventory was a beneficial growth in home prices across the board. The tighter inventory of a post REO flooded market has nearly run its course in controlling the market economists predict. In fact, CoreLogic goes so far as to say that home prices are stabilized enough to be back ‘on track’ in a way it has not been since 2006.

The stats are as follows:

  • Foreclosures have fallen 20% from a year ago.
  • From January to November of 2012, REOs dropped from 19.6%-11.5%.

Delinquencies are becoming rarer as banks opt for short sales/mortgage  modifications over foreclosures. One big national trend within this larger narrative is that of the stark difference between judicial and non-judicial states. The only difference, judicial states must have their foreclosures go through the state’s court extending the timeline for a home to foreclose. Non-judicial states have clear their foreclosure pipeline whereas the judicial states are still trucking along. 

“The foreclosure crisis has shifted east, to the judicial states, where the pipeline is slow,” says Khater. “The big driver in 2012 in prices increases [sic] was the decline in REOs, but I think the big move-down has already happened. The driving prices in 2013 will be the tighter inventory.”

Source: “Inventory Takes Center Stage as Foreclosures Fade,” The Wall Street Journal (Jan. 4, 2012)

 

 ATHOMEINBOZEMAN

 

Displaying blog entries 1-4 of 4

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