With spring snow showers carrying on, Big Sky continues to feel the effects of winter while looking forward to sunnier days. Likewise, off-season gives everyone a chance to reflect on the season, evaluate their position in life and plan for the trail ahead.
It is easy to be distracted by the "noise" and mixed messages the media sends regarding the national real estate market. Now more then ever it is important to analyze the local market and make informed decisions based on accurate data.
ERA Landmark Real Estate specializes in market analysis to keep both buyers and sellers abreast of the opportunities and challenges of our current market. Many Big Sky property owners look back at the investments they have made over time and recognize the smart moves that they either made or did not make. A few people may even lament the offer or opportunity that they let "get away".
Today, Big Sky real estate is presenting buyers again with opportunities: smart buyers are finding value in properties throughout the area with a broad selection of inventory, favorable interest rates and a unique local market. Qualified buyers are poised to take advantage of the limited number of well-priced properties. Multiple offers are appearing once again in our market on properties priced to move.
Is this "the Bottom"? Timing the bottom of the ski hill at the end of your run is easy enough. Timing the bottom of the real estate or stock market is not so simple. Typically, the trough is obvious after the fact, once the market is up ticking and prices are increasing. Waiting for the market to adjust may bring increased prices and more competition for fewer properties.
What will interest rates do? The future value of interest rates is difficult to predict. What is certain is that low interest rates are available now to provide buyers with favorable options.
Inventory surplus Inventory of single-family homes and vacant land in Big Sky/Gallatin Canyon is at an all time high. The number of condo/townhomes that are currently on the market is trending down for the first quarter of 2009 relative to past years. The decrease in number of buyers is leading to an extensive selection of properties that remain as unsold inventory (pushing market absorption rates to all time highs). The lower number of potential buyers actively pursuing properties right now has significantly shifted the market in the favor of buyers. Sellers need to be aware that if they want to sell their property in 2009, they will need to price it to stand out among the vast competition, most likely under current market value.
Market analysis: The overall dollar volume was down 67% to $11,895,000 and the number of transactions was down 34% to 21 sales, when compared to the first quarter of 2008. (According to a Jackson Hole report, their overall dollar volume was down 65% while the number of transactions was down 79% to 29 sales.) Meanwhile, the average sale price fell for the first time in 4 years and the median sale price is down for the second year in a row. As of May 2, there were 674 available properties in all of Big Sky.
Single-family home sales have dropped significantly, down 50%, while the average and median sale price decreased 55% and 61% respectively. The $1-$2 Million segment of the market currently has the most available inventory for single-family homes. As of May 2, 2009, 43 of the 136 single-family homes on the market were listed for under $1 million. The median list price of $1,595,000 displays the divide between current list price (Seller's expectations) and the first quarter sold median price of $728,000 or the current under contract median list price of $819,500 (Market reality). Another perspective to consider is that the buyers that purchased in the first quarter or 2009 sought well-priced homes (under $1 Million) that they saw value in purchasing.
Vacant land sales have been more consistent between the first quarter of 2008 and 2009. The sales volume for each quarter was 7 units with the median sale price decreasing by 14% in 2009. The average sale price dropped significantly (75%) due to a land sale in 2008 for $7,000,000.
Condo/townhouse sales were down 43% with only 8 sales in the first quarter of 2009, average sale price was up 13% while the median sale price dropped 17%. Meanwhile, current inventory offers buyers 258 individual units for sale. Condominiums may face stricter financing guidelines as lenders redefine second-home properties and investment properties to limit their risks.
What does the future hold? Our office and agents are staying in the business. Although the downturn has affected the Big Sky market, we have weathered past recessions and fluctuations in buyer confidence. We are committed to helping you make the best of what Big Sky has to offer: investing in a lifestyle for the long-term.
36 Center Lane
Meadow Village Center
Arrowhead Mall
PO Box 160699
Big Sky, MT 59716
406-995-3444
888-996-3444
bigskyinfo@eralandmark.com
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