Bozeman Montana Real Estate Information Archive


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9.3% Raise in New-Home Construction!

by Tim Hart

New Home Construction

Indicators used to gauge the incline or decline of construction, new-homes and building permits, surged last month. Builders started more home projects in November increasing above October 9.3%.  The last time levels were this high was in April of 2010.

While home construction rates are seasonally adjusted at an annual rate of 685,000 homes, this rate is still below the 1.2 million home pace economists consider being ‘healthy’ for the new-home sector.

Multi-family homes carried the bulk of the increase with a jump of 25.3%, single family homes rose 2.3%, and building permits 5.7%.

“While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. "However, the difficulties that both builders and buyers continue to experience in accessing credit for new homes are holding back potential sales even in areas where economic conditions are improving." 


Source: “Apartment Construction Spurs 9.3% Jump in Housing Starts, But Level Remains Low,” Associated Press (Dec. 20, 2011); “U.S. Nov. Housing Starts +9.3% to 685K; Consensus +0.3%,” Dow Jones International News (Dec. 20, 2011); and National Association of Home Builders

Appraisals Derailing Real Estate Contracts

by Tim Hart

Appraisals Center Stage: 

Appraisals are notorious for hampering real estate deals. 1/3 of real estate professionals have dealt with a delay or cancellation of contracts, a statistic that is up 29% from last year. (National Association of REALTORS)

Causes of this increased termination of contract rate:

Lenders are requiring more thorough appraisals which raise an issue for appraisers. They are required to reference comparable sales—many of which are foreclosures and short sales which are being sold at their discount prices.  

Appraisers have always tried to site three recently sold homes, but lenders are requiring two-three times more than that now.

When appraisals come in lower than the accepted offer the seller must either lower the price OR the buyer has to pay the difference. Statistics from earlier this year show that 13% of contracts are renegotiated at a lower price because of the appraisal rate. 


Source: How Appraisals are Derailing Home Sales “SmartMoney” (Nov. 4, 2011)

Trends of High Affordability Continue!

by Tim Hart

High Housing Affordability


Here’s a closer look at mortgage rates for the week ending Dec. 8.

30-year fixed-rate mortgages: averaged 3.99 percent, with an average 0.7 point, down from last week’s 4 percent average. A year ago, 30-year rates averaged 4.61 percent. 

15-year fixed-rate mortgages: averaged 3.27 percent, with an average 0.8 point, just slightly above the all-time low of 3.26 percent it reached on Oct. 6. Last year at this time, 15-year rates averaged 3.96 percent. 

5-year adjustable-rate mortgages: averaged 2.93 percent this week, with an average 0.5 point, ticking up slightly from last week’s 2.90 percent average. Last year at this time, the 5-year ARM averaged 3.60 percent.

1-year ARMs: averaged 2.80 percent this week, with an average 0.6 point, edging up slightly from 2.78 percent last week. A year ago, 1-year ARMs averaged 3.27 percent.  

Source: Freddie Mac

Housing is being kept affordable through this holiday season as the mortgage rates continue to dip down into record lows. 12.6% of a median family’s income is spent on monthly principal and mortgage interest payments. The National Housing Affordability Index reached its 6th all time high according to the National Association of REALTORS.  

The Housing Market is Still a Great Investment

by Tim Hart

Still a Great Investment:

62% of Americans believe purchasing a home is a good investment and they think that trend will continue at least for the next ten years. Affordability is the primary factor for the 1,104 consumers polled by the Mortgage Index Study conducted on behalf of Bank of America. Of these, 62% percent are considering a home purchasing having visited a lender or using online tools to determine their affordable monthly mortgage payments. 74% said they will be using personal savings for their down payments.

Good news on the horizon this holiday season from the consumer’s point of view! 

Source: “Bank of America Survey: Consumers Cautious About Home Affordability,” Inman News (Dec. 8, 2011)

One-Year Cap of Foreclosures Deficiencies

by Tim Hart

One-Year Cap of Foreclosures Deficiencies

The House of Representatives introduced a new bill on Tuesday that seeks to limit and standardize the timeline in which a mortgage company can go after a home owner following a foreclosure for a deficiency judgment.

Dubbed the Fairness in Foreclosure Act of 2011 (H.R. 3566) wants to place a one-year cap on deficiency judgment (with the exception of states that already have shorter time limits in place). In addition, the bill proposes that mortgage lenders will not be allowed to go after “low-income” borrowers for a deficiency judgment.

"A deficiency judgment after foreclosure seems to be one of the greatest injustices that occur to home owners after they have gone through the arduous foreclosure process," Rep. Edolphus “Ed” Towns, D-N.Y., who introduced the bill, said in a release. "Not only are they behind by thousands of dollars on their mortgage payments and facing public auction of their houses, the ordeal may continue indefinitely."

Source: “House Bill Proposes 1-Year Limit on Foreclosure Deficiencies,” HousingWire (Dec. 7, 2011) and “Rep. Town Introduces the Fairness in Foreclosure Act,” Congressman Ed Towns (Dec. 6, 2011)

Distressed Sales: A Little Explaination

by Tim Hart

Many people call me to inquire about bank owned properties. . . 

Their belief is that a bank owned property is the best deal.  In many cases, this is true.  But this article will help to better educate you on distressed properties.  In my opinion, a distressed property is any property that is selling below current market value (often significantly below market) due to a number of factors:

1. Distressed properties may come from a number of sources including bank owned foreclosures, short sales or a traditional listing (meaning no third party, such as a bank, yet involved) with an extremely motivated seller. 

2. Seller motivation may include trying to compete with the bank owned and short sales, wanting to sell quickly to purchase another property or contending with the early stages of distress and being unable to keep up with mortgage payments.  

3. If a homeowner can’t prove hardship, these motivated sellers may be coming out of pocket with cash to keep a deal together.   I have seen this plenty in the last 3 years!   In addition to giving my clients tools to do their own research – I follow the distressed market closely for matching up properties with buyers. 

To keep my buyers in the running for excellent priced listings, an agent needs to scan all new listings including new to market and price reductions.  In addition, an agent needs to follow all bank owned listings for new listings and price reductions.  Once a property matches a buyer’s parameters, it can be a real dog fight.  Well priced distressed properties can go under contract in less than 2 – 3 days for more than their asking price.  An agent needs to move quickly on the good ones.  For more information on properties in Bozeman, Big Sky, and the entire Gallatin Valley, follow this link or call me at 406.570.5730 to answer your questions.

Cautions in Applying for A Mortgage: Tips for Buyers

by Tim Hart

 RED FLAGS! Applying for a Mortgage

 Three things to watch when you are applying for a mortgage: 

  • Large Deposits of Money: Lenders have the responsibility of accounting for any cash gifts for down payments (ie from relatives). If a borrower earns $5,000/month and deposits an extra $15,000 beyond that, lenders may become wary of where that money came from when applying for a loan.
  • The Home’s New Address: If a buyer purchases a home 3+ hours from their workplace they may draw more scrutiny from lenders. This presents a possibility of renting or flipping a property, both of which must be disclosed.
  • Signing up for New Credit Cards: Taking on extra debt when applying for a loan (may want to hold off on buying furnishing for that new home!) because extra debt is a red flag for lenders that the borrower may push past their lender-accepted limits.

Lenders are being more thorough in reviewing mortgage applications ever since the financial crisis. This economic environment has triggered fears that borrowers may default or walk-away from their mortgage or mortgage fraud. Be the best consumer you can by being aware of what you are getting into!


source: Nov 07 2011


by Tim Hart

Leave the lights of the city for peace and quiet just a short drive away at this 3580-SF home in Three Forks. This custom floor plan delivers 6 bedrooms, 3.5 bathrooms, master suite with jetted tub, dual sinks, separate shower, and a massive walk-in closet. The spacious living room with carpeting, gas fireplace, charming family room with built-in bookcases, and a wet bar are all features to entice you home. The tongue and groove ponderosa pine ceilings add extra class throughout your home.  This is an OUTSTANDING home that is deserving of a second look.  We have a home inspection completed and are ready to go, please come take a closer look with us!



Displaying blog entries 1-8 of 8