MARKET UP DATE AT GLANCE COMMENTARY THRU MAY 31ST 2009
STABILIZATION SEEMS TO BE THE BEST WAY TO DESCRIBE THE WAY THE REAL ESTATE MARKET BEHAVED IN MAY. AS MENTIONED PREVIOUSLY AN INCREASE IN buyers coming into the market (first time buyers AND BEGINNING MOVE UP TRAFFIC) were responding to their best self INTEREST WITH historically low RATES AND THE first time buyer tax credit.
the most active SEGMENT of the market HAS REMAINED between 120k to 180k(PRIME FIRST TIME BUYER PRICE RANGE), that price range share of the market 22% by unit volume in 2008, INCREASED TO 29% by unit VOLUME AT THE END TO MAY 2009. THE UPPER RANGE SEGMENTS 300K TO 500K HAS SEEN AN INCREASE IN PENDING SALES INDICATING A MOVE UP MARKET TREND BEGINNING. WE WILL WATCH CLOSELY AS THE PENDING SALES SHOW UP IN THE CLOSED SIDE OF THE EQUATION TO SEE HOW THE MOVE UP MARKET PLAYS OUT FOR THE REST OF THE YEAR.
the question ABOUT FIRST TIME BUYERS CHANGES A LITTLE over the next couple of months, HOW MANY FIRST TIME buyers DOES THE YELLOWSTONE COUNTY HAVE, AND HOW MANY WILL CONTINUE TO COME INTO THE MARKET due to the tax credit AND LOW INTEREST RATES. IF thE CREDIT MARKETS AND INTERESTS RATES CONTINUE TO BE KIND TO FIRST TIME BUYERS. THE MARKET SHOULD ALLOW MOVE UP TRAFFIC TO PICK UP AS we PROGRESS INTO SUMMER.
THE inventory levels have CONTINUED TO moderate A DECREASE OF 1% FROM a year ago, AS COMPARED TO 41% HIGHER IN JANUARY AND 25% FEBRUARY A YEAR AGO, THE decrease from a month ago is AFFECTED by the increase in pending SALES. IN THE COMING TIME PERIODS WE WILL SEE GREATER ACTUAL DECLINES FROM A YEAR AGO BECAUSE APPROXIMATELY A YEAR AGO INVENTORY LEVELS WENT UP SUBSTANTIALLY.
THE PENDING SALES levels CONTINUE TO moVE HIGHER, AN INCREASE OF 9% FROM a year ago, AS COMPARED TO 37% LOWER IN JANUARY AND 5% LOWER IN FEBRUARY. THE INcrease from a month ago is AFFECTED by the increase in FIRST TIME HOME BUYERS AND THE BEGINNINGS OF MOVE UP TRAFFIC. IN THE COMING TIME PERIODS WE WILL SEE GREATER INCREASES FROM A YEAR AGO, BECAUSE APPROXIMATELY A YEAR AGO PENDING SALES LEVELS WENT DOWN SUBSTANTIALLY.
CONSTRUCTION numbers in MAY: single family permits, IN TOTAL still show a very SIGNIFICANT decline FROM LAST year. to put it in PERSPECTIVE the first 5 months of the year are as follows 1. 2009 76 single family permits, 2. 2008 128 single family permits, 3. 2007 214 single family permits. the SURPRISE IN new CONSTRUCTION market WAS THAT IN MAY OF THIS YEAR AND LAST YEAR THE SAME NUMBER OF SINGLE FAMILY PERMITS WE PULLED 29 IN BOTH THIS YEAR AND LAST. IT will BE INTERESTING TO SEE IF THE SAME OR BETTER HAPPENS IN JUNE...
the home sales prices below SHOW a slight price decline year to year YELLOWSTONE county has seen about a 3% DECLINE in closed PRICE (A SLIGHT IMPROVEMENT FROM LAST MONTHS COMPARISON).
THE POSITIVE forces in the MARKET REMAIN THE SAME, the STRENGTH of the below $200,000 (ALLOWING SOME MOVE UP MARKET), no SIGNIFICANT FORECLOSURES of HOMES AND HISTORICALLY LOW INTEREST RATES 5% FOR A 30YEAR LOAN AND STRONG EMPLOYMENT NUMBERS...
another big POSITIVE IS NO SIGNIFICANT FORECLOSURE activity in yellowstone county. the importance of this fact can not be UNDERSTATED. when you look at other market places AND THE case /shiller index declines, the driving force in downward price pressure is FORECLOSED properties sold by lenders.
unemployment in YELLOWSTONE COUNTY IN APRIL WAS 4.2%, NOT SEASONALLY ADJUSTED, COMPARED to the state average of 6% , GALLATIN VALLEY OF 6.5% MISSOULA OF 5.8%, THE FLAT HEAD OF 10.5% and the NATIONAL of 8.9% giving people who want to own their home a job and A BELIEF that they will be employed, (A SIDE NOTE TO YELLOWSTONE COUNTY ACTUAL NUMBER OF WORKING PEOPLE IN MARCH WAS 79,800) along WITH low INTEREST, approximately 5% on a 30 year fixed rate, and you have a good case for buying a home if your intention is staying put three plus years.
IF YOU NEED AN ADDITIONAL INFORMATION PLEASE CALL OR E-MAIL