december 3rd real estate update

Wednesday, December 03, 2008

by Howard Sumner

It’s that time of the month to give you an update on the real estate market progress so far this year.

I thought it might be useful for perspective to give comparisons of how Billings is fairing this year as compared to Bozeman just 140 miles west.

All though information that follows are from the most reliable I could find, most from federal government sources, and some from local government entities, it would not surprise me if someone had slightly different numbers than what I present below.

When comparing the two areas there were times in the last few years most of us marveled at what we heard about Bozeman, yet I think at this point with the winds of change most would prefer the steady growth of Billings as opposed to the burring flame of Bozeman. When any market gets out of balance it will correct it’s self, it’s just impossible to say when and by how much.

Housing sales and prices are directly tied to income, population growth and financing. Although we in Yellowstone County enjoyed considerable growth in all three we did not seriously out strip our job and income growth with housing prices. At current interest rates the average wage in Billings will support a principle and interest payment of almost $900 with median price Home in Billings requiring a principle and interest payment of about $1000 meaning with the average wage almost 50% of the homes sell within reach of the average wage in Billings comparing to Bozeman the average wage in Bozeman will support a principle and interest payment of almost $813 with median price in Bozeman requiring a principle and interest payment of about $1607 meaning with the average wage barely has half the income to purchase the median priced home in Bozeman. The facts show while we have seen a unit sales decline and a substantial slow down in single family building permits in Billings, it pales in comparison to the correction Bozeman is feeling and probably will continue well in 2009.

	Billings	Bozeman

Percentage of Home
Sales decline	-17%	-39%

Percentage of
Single Family
Permits decline	-39%	-68%

Average sales price	$208,022	$323,000
percentage-up/down	2%	-13.44%

Median sales price	$185,000	$287,000
percentage-up/down	3%	-13.55%

Average wage
per job	$35,749	$32,523

average weekly wage
per job 1st quarter 2008	$695	$617

unemployment rate	3.10%	2.90%
as of September 30th

total employees	77094	45196

Market update at glance		11/30/2008		Year	Percentage Increase or -Decrease
Yellowstone County				2007	2008

Residential Closed Sales Units				2166	1800	-17%

Residential Pending Sales Units				179	145	-19%

Residential Active Property Units For Sale				707	894	26%

Average sales price Single family Home				$204,229	$208,022	2%

Average Square feet Single family Home				2331	2320	0%

Median sales price Single family Home				$180,000	$185,000	3%

Median Square feet Single family Home				2196	2208	1%

Average Days on Market Till Offer Received
Single Family Home				58	62	7%

Absorption rate -	TIME IN DAYS
Time it would take for all existing					202
properties to sell with no new inventory coming
into the market place - residential

SINGLE FAMILY PERMIT ISSUED FOR MONTH			thru 11/30	21	9	-57%

SINGLE FAMILY PERMIT ISSUED FOR YEAR			thru 11/30	413	252	-39%

Average Number of Rentals Advertised Sundays				90	105	17%

Average Asking Price for a Rental Home				$871	$1,052	21%

Average Asking Price for a Rental Apartment				$630	$684	9%