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Displaying blog entries 1-10 of 17

New Subsidized Housing to Help Ease Rental Numbers

by Tim Hart

A new, 47-unit development will be coming to the west end of Bozeman to help alleviate the lack of rentable homes in Bozeman. The new apartment complex will be subsidized in order to keep rental rates affordable for low-income residents. The complex will cost 10 million dollars to build, but almost 6.6 million will be funded in part by federal tax credits awarded to the city from the Montana Board of Housing. The project will be a shared effort between the Human Resources Development Council, they city of Bozeman and Summit Housing group, a Missoula based developer.

The subsidies should help reduce the amount of borrowed capital, making it possible for the apartment complex to lower rent rates. $659,000 will be awarded to the project every year for 10 years. The maximum rental price for a two bedroom unit will be $700 a month. The apartments should be finalized by September, just in time for the inevitable student rush that follows the beginning of the semester.

More affordable housing for rent should help alleviate the current rental ‘fill-up’ in Bozeman. As the rental market becomes less volatile, the buying and selling of homes often follows suit. As homeowners essentially “set the tone” for rental prices in the area, the highs and lows of a rental market can often reveal how the pendulum of the housing market is swinging. Per usual, sustained, consistent growth is ideal, and the addition of more rentals in the area may help make the current growth in Bozeman even more consistent.

Source: http://www.bozemandailychronicle.com/news/city/subsidized-housing-project-planned-for-bozeman-s-west-side/article_71ff832c-75c4-11e4-89a5-e3577905b3dd.html

 

Previously Owned Home Sales Rise in October

by Tim Hart

Recent numbers compiled by the National Association of Realtors have shown a rise in previously owned home sales for the month of October. Sales of these homes rose 1.5% to an annual rate of 5.26 million dollars. October was the second straight month where the annual rate trended up and its upward pace has not been this fast since September 2013.

The combination of improving inventory, stable price growth and low interest rates continue to make buying pre-owned homes easier. The average interest rate for the full month of October fell to 4.03%, the lowest it has been since June 2013. The average had also fallen from September, where the average rate had been 4.16%.

As the market has recovered, the frenetic pace in some real estate markets has slowed in rate. With more relaxed and longer term buyers coming to the market, properties have been staying on the market longer. October averaged 63 days compared to 56 in September. Yet, one third of homes sold in October were on the market for less than a month, showing that the market is still moving quickly in a lot of cases.

Source: http://www.forbes.com/sites/erincarlyle/2014/11/20/existing-home-sales-rise-1-5-in-october-hit-fastest-pace-in-more-than-year-says-nar/2/

Renters Continue to Face Affordability Issues

by Tim Hart

Across the US, rent prices continue to rise. As demand for rental space rises, renters are finding themselves getting priced out of their markets. Bozeman has already seen its rental market all but disappear from the influx of MSU students, but as rent rates continue to rise and mortgage rates continue to fall, more and more people are finding themselves on the buy side of the “rent vs. buy” argument.

In the US, rental rates have risen by 6 percent over one year. In major metropolitan areas like San Francisco, Boston and Chicago, tenants are paying far more than 30 percent of their wages to rent. Many property management companies in the Bozeman area limit their tenants to have their rent be 30% of their wages and will almost never accept anybody going higher. However, when demand is high, its not hard to replace tenants, and many landlords are more than willing take on the risk of a renter splurging on their home choice.

In booming college towns, this trend is exasperated because of the high influx of students.  Having a lease expire just as college students return to school provides plenty of opportunity to update and raise lease rates, especially in the frantic summer months when thousands of students are looking for housing at once.

From a landlord’s perspective, the market lends itself toward investment purchases, with consistent renters and rising prices. But from the renter’s perspective, if they are anywhere near to buying, now may be the time to take the next step towards home ownership. By buying now, renters can get out from under the worry of being priced out of their market. Maybe 10 or 20 years down the line, they can rent the property out for prices they would have still been paying if they had rented. Either way, anyone considering buying a home as an alternative to rent, now may be the time to reevaluate finances and decide if the plunge may be worth it.

 

Source: http://realtormag.realtor.org/daily-news/2014/11/10/renters-face-affordability-crisis?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DailyRealEstateNews+%28Daily+Real+Estate+News%29

NYU Buys Two Buildings at $1,000 a Foot

by Tim Hart

If you thought real estate prices were soaring in the greater Bozeman area, at least you can hang your hat on the fact that New York City will always set the standard for high prices. New York University paid $157 million dollars for two buildings in downtown Manhattan in an effort to expand for their growing university.

708 Broadway and 404 Lafayette St. share approximately 151,000 square feet between them, a respectable expansion. However, in comparison to the price they paid for the two buildings, the cost per square foot comes out to more than $1,000. The properties were vacant at the time of the sale. NYU wants to use the building as a new fitness center and NYU believes the purchase will be cost effective over time.

Unfortunately, the buildings sales history reflects poorly on the school. The price they paid was unheard of right after the crash. These same buildings sold for 39 million in 2005, before the crash even occurred. The sellers were real estate investors, who clearly made a killing on their 2005 purchase. Real estate values have sky rocketed in Manhattan mainly due to the recent demand by offices and retail stores for downtown Manhattan locations. NYU’s timing for their purchase seems questionable, especially because they are an institution that has a buffer from the harsh economic effects of a market crash compared to individuals.

I always enjoy seeing real estate prices and purchases in major cities because they remind me to always stay within reason and educate myself about a market prior to making a major purchase.

Source: http://blogs.wsj.com/developments/2014/10/28/college-costs-nyu-pays-up-for-vacant-buildings/

Marketing Update: Gallatin Valley Townhomes and Condominiums

by Tim Hart

This month, we will highlight condominiums and townhomes in the Gallatin County from the first two quarters of 2013 compared to the first two quarters of 2014.

Here are a few stats for all of Gallatin County for condos and townhomes:

  • Units increased in the first two quarters by 27.5% (244 sold in 2013, 311 sold in 2014)
  • Dollar volume increased in the first two quarters by 55.8% from $56,339,593 in 2013 to $87,800,977 in 2014
  • Average sale price also increased from $234,833 to $280,586
  • For 2014 through 8/31/2014
    • Sold volume already at $117,936,021 and 438 units

Summary – based on increases across the board in the first two quarters from 2013 to 2014, the 2014 market continues to shine, looking to surpass 2013 annual totals easily.

Some Housing Market Info.

by Tim Hart

I read an article in the Bozeman Daily Chronicle today by Jason Bacaj about the current housing market in Bozeman.

Here is what I found to be very interesting:

Houses on the high and low ends of the market are moving extremely quickly, while mid-priced homes have stayed on the market longer.

Any current listing at or below $350,000 will be expected to be sold within three and a half months.

Out of state migrants, investors and young professionals are driving the current market in Bozeman.

According to Erlenbush, high end homes are selling by more than 50 percent compared to 2013.

Definitely an interesting read and I’m interested to see if the market follows the trends they are predicting.

Source: http://www.bozemandailychronicle.com/news/economy/article_82d77262-360f-11e4-9428-0019bb2963f4.html?utm_medium=desktop&utm_source=block_484710&utm_campaign=blox

Mortgage Rates Hit Lowest for 2014

by Tim Hart

After mortgage rates dropped in the U.S. for the second week in a row, borrowing costs hit their lowest rate yet for 2014. This week, the average rate shifted from 4.12% to 4.1% for a 30 year fixed mortgage. Although the percentage shift may be small, when added up over 30 years, even the smallest changes can greatly impact the cost of home ownership. A 30 year rate has not been this low since the end of October last year. 15 year mortgages also saw price reductions, slipping from 3.24% to 3.23% this month. The 30 year rate has been consistently declining since it had hit a two year high of 4.58% last August. Experts foresee the lower rates supporting and fostering home demand. July trends support these expert’s claims, as previously owned homes sold at an annualized rate of 5.15 million this July, up 2.4% from June. The longer the rates stay low, the more activity can be expected in the future of the US housing market.

Source: http://realestate.msn.com/blogs/post--mortgage-rates-hit-new-2014-low

New Home Construction Rising

by Tim Hart

I read an interesting article today on new construction for July. More and more people are putting their faith in the housing market. Here’s what I took out of it.

 

New home construction continued to rise in July which should continue to boost the economy in the coming months. Housing start ups climbed 16% last month to an annual rate of 1.093 million units, showing a renewed faith in the housing market. July levels hit the highest level of construction since November. Construction on new apartments has seen the greatest increase in the US. Total home construction rose 22% all the way up through July, and building permit applications.

 

http://realestate.msn.com/blogs/post--us-housing-starts-up-sharply-in-july

New FICO Credit System Changing

by Tim Hart

The credit scoring system may be changing for the better, at least for consumers with a shakier credit history. FICO has introduced their new credit system that is aiming to be more loan friendly towards clients with past, but paid-off debts as well as those with medical debt. The new FICO scoring system will take settled bills into consideration when adjusting someone’s credit score. If someone had owed money in their past, with the old system, their credit could be retroactively affected for seven years. Now, old, but paid off bills should not affect their credit score as much as before.

            The new FICO system will also remove the negative effects of having unpaid medical bills. Currently, 64.3 milion Americans’ credit scores are affected by these unpaid medical bills. By removing the negative impact of medical debt, some Americans may see their credit scores raise by 25 points. Considering that FICO scores are used to determin loan decisions around 90 percent of the time, many more people may find themselves eligible loan. Even more people will see their own rates lower, especially if they had been receiving less than friendly rates from banks. These new rates could greatly increase the number of Americans receiving loans and buying cars and houses.

Residential building permits and rising utility connections continue to suggest rapid growth in Bozeman. From 2008 until 2013, Bozeman dealt with around 200 residential building permits per year. In 2014, the City of Bozeman Department of Community Development expects more than 1,000 permits to be given. Other than last year, the last time residential building permits reached more than 1,000 permitted buildings in a year was 2005.

Bozeman is also beating other Montana cities for new electric and gas connections. As of early June, Bozeman had 375 new electronic connections and 175 new gas connections. Billings paled in comparison, despite having the second highest number of new electronic connections with 100. To put the growth in perspective, compared to a high growth year in 2013, Bozeman has still doubled its average new electric connections per year in 2014.

 

Displaying blog entries 1-10 of 17