Market update for Yellowstone County.  March 13th 2010

I have put together a series of four graphs to try and discern the tea leafs at the bottom of the market performance cup.

The first graph shows the activity relationships to sort out how long the market will take to absorb the inventory that exists at this stage of the year, absorption time is always longer this time of year and this produced due to the slower winter sales and an increasing inventory so a little longer absorption does not mean that the sky is falling. Yet when we use the National Associations of Realtors definition of a buyers market of 180 days to absorb inventory Yellowstone County does exceed by just over 30 days sitting at absorption time of 212 days. I would note just like days on the market (presently 57 days) this number fluctuates though out the year so the trend either up, down or flat is just as important as the absorption time itself.

The second graph shows the pricing relation to the different inventory segments. My first comment would tend towards the closed sales in the average sales price you can see the effect of the first time buyer tax credit also in the off market price the slow demand shows in the average asking price of those properties that did not sell.

 

The third graph shows the relationship of the inventory trends the last three years what stands out is the rapid climb of 2008 as the United states economies bad news permeated the press and affected our market as people became concerned over what might happen here, the other stand out is 2010 and 2009 are essentially the same and inventory is staying flat neither increasing substantially or decreasing. This does indicate equilibrium within the market place of supply.

The fourth graph is one I personal watch closely to determine the strength of the market and that is the percentage of pendings to active properties. The reason this piece of information is important if both sales and inventory are moving in the sale direction the market shows balance which is a positive and if they are heading opposite directions you can see either strong price pressure or lack of demand much clearer than if looking at the each factor separately right now we are better than 2009 and lower than 2008. Yet the activity that will give the most definition will be when the tax credits end on April 30th and where the trend lines are at the end of June. Those numbers will define the market for the rest of 2010. So right now it is off to the races until the tax credits expire.