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All Cash Home Sales Trending Down

by Tim Hart

All Cash transactions on existing home sales accounted for 24% of sales in March. That number fell by 33% in comparison to March 2014 numbers. In general, smaller amounts of all cash deals suggest that investors are not as active and that the slack has been picked up by long-term homeowners.

The drop in all cash sales relates to the drop in investor activity. As distressed properties for sale have decreased and home prices have gone up, investors have been seeing thinner profit margins of late. Distressed sales took a 10% share of home sales in March, which was down from 14% in 2014. As an investor, it’s harder to get a screaming home deal when sellers are not backed into a financial corner and forced to sell.

Seventy percent of investor purchases in March were made in all cash.

Having lower all cash sales suggests that distressed property sales may also be going down. Sellers have seen improvement in their financial standing since 2008, but particularly of late. Most sellers’ finances now afford them the ability to sell their home when they want to, not when they have to—creating a more balanced housing market with less crazy deals.


Even as cash deals have gone down, the housing market continues to improve, suggesting that the market’s recovery is due in large part to increased activity among long term homebuyers. More people have been willing to get financing on a home, particularly with current low mortgage rates. Cash sales may be decreasing but their smaller market share may also be from traditional financed sales grabbing a larger share of the market in 2015.

 

Source: http://realtormag.realtor.org/daily-news/2015/05/11/cash-sales-are-weakening

 

Gallatin County Market Update May 2015

by Tim Hart

This month, we will compare condo and townhome sales for Quarter 1 in the Gallatin County between 2014 and 2015. Here are a few stats for all Gallatin County condos and townhomes:

  • Unit Sales decreased in the first quarter by 1.7% (121 sold in 2014, 119 sold in 2015)
  • Dollar volume increased in the first quarter by 0.26% ($33,006,258 in 2014, $33,095,180 in 2015)
  • Median sale price decreased in the first quarter by 2.5% ($200,000 in 2014, $195,000 in 2015)

Summary – Condo and townhome sale numbers for Quarter 1 of 2015 compare very similarly to numbers seen in 2014. It should be noted that although almost all numbers are on par with 2014 numbers, the average days townhomes spent on the market were nearly half in 2015 (124 DOM in 2014, 65 DOM in 2015). Assuming the year follows a similar pattern as last year, we are on our way to a healthy year in real estate.

Housing Start-Ups Up, Permits Down in March

by Tim Hart

March gave some mixed results regarding the health of newly constructed homes in 2015. New permits shrank by 5.7% from February to March, yet housing start-ups rose by 2.9 percent.  Both directly affect the number of homes available on the market. How home inventory will be affected is yet to be seen.

Building permits and housing start ups are the leading indicator for the health of the new construction industry. On the positive side, single-family start-ups increased by 4.4% in March. Another positive note, the lack of building permits in March may be just a small dip because housing permits have increased by 8% since last year and increased by 10% in the Western Region.

However, costs for lots, materials and labor for builders is still a bit high, preventing builders from building more houses to raise home inventory. According to realtor.com, to return to normal markets, builders would need to construct around 1.5 million homes. Currently they are on track for around 1.2 million.

How these numbers will relate to home inventory and therefore the housing market overall are yet to be seen. Ideally, home inventory will achieve a good balance to prevent price volatility that we have seen in the past.

 

Sources: http://www.realtor.com/news/data-report-new-construction-permits-from-commerce-department/

http://eyeonhousing.org/2015/04/modest-increase-in-housing-production/

Builders across the nation were surveyed by the National Association of Homebuilders regarding obstacles that may cause problems to their personal business and the overall housing market recovery. Here is a list of their top 5 concerns.

  1. Cost/Availability of Labor – 68%
  2. Cost of Building Materials – 66%
  3. Bank/Financial Institution regulation – 61%
  4. Cost/Availability of Developed Lots – 57%
  5. Federal environmental regulations and policies – 57%

Although all of these seem like common sense issues when building a home, its always good for buyers to better understand the perspective of the person selling their home. If a buyer can understand the stresses, obligations and duties a builder/seller has to the home and all involved in its build, the buyer can be better prepared to write an offer that would be accepted. Buying and selling homes can be stressful—but remember it’s stressful for both the buyer and seller—even if he is a builder!

 

Source: http://eyeonhousing.org/2015/04/top-builder-challenges/

Home Buyer Demand Rising In Real Estate Housing Market

by Tim Hart

Home buyers may soon look like the picture above, as they wait to see that perfect home listing. Ok, maybe not to that degree, but of late, buyers have been lining up to get their chance in the US housing market.

Buyer demand has increased over March and into April across the United States due to low mortgage rates and more, new constructions start-ups adding cheaper inventory to the market.

Mortgage applications rose in the week ending April 4th for the 3rd consecutive week. Applications rose by 7% week over week and were up 12% from the same week in 2014. Mortgage applications are the best barometer for homebuyer demand, so seeing an increase in applications is always positive.

Applications rose by 17% from March compared to February as well. Most attribute the rise in mortgage activity to be due in part to the low mortgage rates seen recently (3.66% for a 30 year fixed-rate mortgage).

Buyer demand has also increased for new construction. Many buyers have opted to wait for a new home, rather than competing with other buyers on an existing home. New construction homes sales have gone up recently because they have found a price point that is appealing for many buyers.

 

Source:

http://realtormag.realtor.org/daily-news/2015/04/08/more-proof-home-buyer-demand-rising

http://www.realtor.com/news/mortgage-rates-lower-new-home-buyers-take-advantage/

 

The Gallatin County and southwest Montana, along with a few select regions in the state, have helped raise the average wage for the state and lower unemployment numbers.

The Bozeman Daily Chronicle analyzed numbers released by the Montana Department of Labor and Industry and split the state into its major regions.

The Billings region, lead Montana with an average wage of $40,733 in 2013. Southwestern Montana came in just behind that with an average wage of $39,698. In Gallatin County, 66% of its residents earned their income through a wage or salary disbursement.

Despite the Gallatin County leading the state in economic growth, the average wage still came in second to the Billings region. Perhaps the slightly lower wages reflect the consequences of being a major tourist hub for the state. In an area with high tourism, many retail and service industry jobs that pay minimum or close to minimum wage will find greater success. The minimum wage was raised from $7.90 an hour to $8.05 an hour across the state at the beginning of 2015.

The highest earners in the state were physicians and surgeons at $243,000 per year. The lowest average wage came from gaming dealers—at $18,150 a year.

Montana and the Gallatin County both had unemployment rates below national averages. The seasonally adjusted unemployment rate in the United States currently sits at 5.7 percent. Currently, 4.4% of Montanans are unemployed. In Gallatin County, only 3.6% of people are unemployed.

 

Source: http://www.bozemandailychronicle.com/business/salary-cap-southwest-montana-ahead-of-most-of-state-in/article_3ee1bbe8-c637-5c3a-9998-24b386d2ffff.html?utm_medium=desktop&utm_source=block_1021344&utm_campaign=blox

http://www.lmi.mt.gov/

http://dli.mt.gov/news/21

 

 

 

Classifying the 2015 Home Buyer

by Tim Hart

What drives homebuyers in 2015? Where are they coming from and where do they want to go? And as I’m sure you are asking yourself right now, why does any of this even matter so long as my house sells?

Well, any home seller who understands what type of buyer he/she will ultimately sell their home to, can then fix and adjust the home to make it appeal to the highest amount of buyers, raising its market demand.

The National Association of Realtors recently released their Home Buyer and Seller Generational Trend report, outlining, among many other topics, the general outlook of United States homebuyers.

Generation Y, those aged 35 and under comprise the largest share of home buyers at 32 percent, more than all baby boomers combined. Their average income is $76,900 a year. It should be noted that the median age for these home buyers was 29, meaning that those home buyers are generally closer to 35 than to 18 when they are ready to make a purchase. Sixty nine percent of Generation Y buyers are first time buyers and 39% of them were driven to purchase a home for the desire to finally own their own home. For buyers aged 33 and under, 59% of them are purchasing a home to leave a rental situation.

Generation X, those aged 35-49, comprise 27% of homebuyers in the United States. On average, they make $104,600 a year. Generation X buyers, in general, are shopping for more than just themselves. Generation X buyers are usually shopping for families. As the presence of children in the home peaks for a buyer aged 35-49, homes aiming to sell to Generation X’s will need to be child friendly, with additional bedrooms and possibly a bonus room.

As age increases, homebuyers are far more likely to already be homeowners. Below age 33, homebuyers are generally leaving a rental situation. For homebuyers over 50, more than half owned their previous residence. Whether that means they are buying a second home, are downsizing or have other reasons to move, these buyers will generally be more seasoned, discerning and will expect more from their home.

Young boomers or people aged 50 – 59, comprise 15% of the buyer’s market. They are likely to move for job relocation or to downsize their home. Younger boomers make an average of 96.6 k per, the first age group where median income goes down from the previous generation as oppose to up.

Older boomers, people aged 60 to 68, move for retirement or to be closer to friends and family. As age increases, the rate of owning more than one home also increases.

If you have considered selling your home in the past, you may not have considered this question: What type of buyer will my home more than likely sell to and how can I make it even more attractive to that person? Once you have found that answer, you are well on your way to listing a highly sought after home.

 

Source: enews.realtor.org/a/hBVCzjXB8hVyFB9AAjlAAScqXkq/feature

Cannery District Project Scheduled for Fall Opening

by Tim Hart

The Cannery building, the focal point of the Cannery District, will be set to open for business starting this fall. After jumping through hoops and dealing with discussions of a possible city annexation, the owners are now ready to move on the Cannery Building itself. The owners already have a variety of businesses set up to lease the space once the building is ready.

Currently crews are working on bringing the 4-story Cannery building up to new guidelines and code and expect the building to be ready on time.

The owner’s goal is to bring centrality and vibrancy to the district. As of now, the building will be welcoming a barbershop, an architect, a physical therapy group and a marketing technology firm. The owner’s hope to have a restaurant on the bottom floor and one spot is still currently available.

The building is the first phase of a 4 phase Cannery Renewal Project. By project’s finish, the Cannery District should have 15 buildings in total, costing roughly 15 million dollars.

 

http://www.kbzk.com/story/28655194/bozeman-businesses-scooping-up-space-in-historic-cannery-building

YMCA Moving Forward with 5.5 Million Center

by Tim Hart

The Gallatin YMCA will move forward with their plans to construct a 5.5 million dollar athletic facility just north of Gallatin Regional Park in Bozeman. According to preliminary plans, the building would be 24,000 square feet and would include weight and cardio centers, locker rooms, a community program area and administrative space.

The 7-acre site was purchased by the YMCA, thanks to a large donation in 2008. However, after the recession tightened up funding, the project has been on the back burner ever since.

Recently, the YMCA restarted their attempts to get the facility running. They have been requesting donations from the community and so far, have raised 2.5 million for the first phase of the project.  In summer 2014, to lighten their load, they paired with the City of Bozeman to build a new aquatics center. But once the bond approving a new law and justice center fell through, the aquatic center moved down on the city’s priorities.

The YMCA serves 5,800 kids annually. That number has grown by 540% since 2010. Bozeman continues to attract new families, looking to raise their children in a positive environment. The YMCA’s recent growth helps support that claim.

As Bozeman continues to grow and continues to stay such a family friendly environment, residents should expect more, similar projects to better address their family needs in the future.

 

Source: http://www.bozemandailychronicle.com/news/city/ymca-kicks-of-capital-campaign-for-million-center/article_c9bebe86-e998-5dec-8a36-f3032e7f6535.html?utm_medium=desktop&utm_source=block_937344&utm_campaign=blox

 

Bozeman School District Enrollment Increases

by Tim Hart

The Bozeman School District will be adding 170 more students next year, highlighting Bozeman and the surrounding area’s continued growth. Last year, Bozeman schools had their highest enrollment ever and it looks like the record won’t make it through the calendar year.

In addition to the 170 new students, administrators will hire 11 more teachers to better educate the additional students. In order to make those hires, the 2015 legislature will need to pass the public schools bill in April. Luckily, the bill dealing with inflation costs has already passed.

Elementary and middle schools will increase by 167 students next year. That is a 3.8% increase from the 2014 to 2015 school year when 4,321 students were enrolled in elementary and middle schools. The high school only added 3 new students. From a real estate perspective, the enrollment totals suggests that Bozeman is still very much a family town—and new families looking to move here, tend to make that move early. With the nearby schools, public lands and outdoor activities, its easy to see why Bozeman would be a big draw for young families looking to live in Bozeman for an extended time.

As enrollment increases, Bozemanites may have concerns that the quality of the education may be diluted. However, this year suggests otherwise. Bozeman High School was honored for its students high Advanced Placement Exam scores and ACT scores. The high school was also awarded two grants for studies in mental health and mathematics. Longfellow, one of the local elementary schools, won a department of education honor as a Blue Ribbon School.

The Bozeman School District still remains the gold standard for schools in the area. It is no wonder that more and more families move to Bozeman to educate their children in such a positive learning environment.

 

 

Source: http://www.bozemandailychronicle.com/news/education/bozeman-schools-look-to-fund-growing-enrollment/article_b8d7b23e-41eb-5af5-b2e5-5f98078322d9.html

 

Displaying blog entries 1-10 of 54

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