In order to enjoy a day of skiing in the winter you need a slope so gravity can work its magic and pull you down the slope. I thought skiing was an appropriate analogy for how we are performing so far this year. The information is current as 4/12/2011
First looking at the percentage of the market by price range the two thing of note are #1 the high end by number of sales, except for the year 2009, are remaining constant as a share of the market. This should not be a surprise since historically low interest rate and more advantageous pricing would be a call to action for the smart money. # 2 the 400k to 500k shows a 66% percent drop in percentage of the market, this indicates how hard the changes in financing have affected what I call the "debt rich" those individuals who thought since a lender would approve them they could purchase above their means. Along with the drop in the 400k to 500k range the 30% increase in the percentage of the market in 300k to 400k range. shows all the "debt rich" removed from the market and the price movement down to attract value buyers that actually have means to purchase, so the market is behaving in its normal rational way responding to supply and demand.
Next we look at the price per square foot of properties sold and we can see the continuation of gravity at work. One very important cautionary notes, looking solely at price per square foot is a dangerous way to value any individual property since there are so many variables in condition and location, yet as an overall market indicator it allows insight into overall direction and a confirming indicator of the average and median sales price movements.
Then we look at average and median sales price received. Taken as whole by themselves an indicator of the overall strength of the market. As a commentary what I would say is, All real estate is local, All news is national, yet we in Yellowstone county are neither a walled city nor an island. In 2009 Yellowstone county had approximately a net in migration of 1400 people what that translate to in turn over, when you look at the out migration, is approximately 5000 new people into the county coming from all points. This assures us that whether we like it or not we are intimately intertwined with the national real estate trends.
then the comparison of inventory levels to pending sales you can see the influence of the tax credit last year. The positive I believe is that after the cliff dive at the ending of the tax credit the market stayed in a relatively narrow range indicating a balance of inventory and sales it appears that is occurring or continuing into this year's selling season that is good because it moderates the pitch of slope and instead of the market going into the expert skiing slope decline we should hopefully stay on the bunny slope or worst case the immediate slope to skiing the markets decline.
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howard@RealEstateMontana.com
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