year end review 2011

2011 END OF THE YEAR REPORT

THE GOOD, THE BAD, THE DIRECTION

MY FIRST COMMENT ABOUT 2011 IS, I AM GLAD IT IS IN TH REAR VIEW MIRROR. MY BELIEF IS 2011 GOES INTO THE RECORD BOOKS AS THE LOW POINT IN REAL ESTATE UNIT SALES AND MOST PROBABLY PRICING IN THIS REAL CYCLE IN YELLOWSTONE COUNTY. THAT BEING SAID THAT DOES NOT MEAN A BOUNCE IN 2012. WHAT IT MEANS IS, MOST PROBABLY, STABILITY WITH A BIAS TOWARDS AN UPWARD MOVEMENT. THE MOST DIFFICULT ASPECT OF 2011 WAS THE FINANCING ARENA, ALTHOUGH RATES ARE INCREDIBLE, THE HOOPS TO JUMP THROUGH TO OBTAIN FINANCING ARE NOT INSIGNIFICANT AND LEAD TO DISCOURAGEMENT OF PURCHASERS DURING THE PROCESS. 2011 WAS THE HIGHEST RATE OF FAILED TRANSACTION THAT I HAVE EXPERIENCED IN MY THIRTY YEARS IN THE BUSINESS.  I HOPE 2012 SLOWS THE CHANGES WITHIN LENDING PRACTICES TO GIVE MORE STABILITY AND CONFIDENCE TO PURCHASERS.

FIRST THE POSITIVES OF 2011. THERE ARE ACTUALLY THREE MAJOR POSITIVES THAT YELLOWSTONE COUNTY ENDED 2011 WITH, ONE IS INVENTORY 20% BELOW 2010 AT THE END OF THE YEAR, THE PENDING SALES BEING UP 17% AS COMPARED WITH 2010 AND LAST WOULD BE THE SMALL DECLINE IN UNIT SALES COMPARED TO 2010.                                             WE CONTINUED TO SEE NEW HOME CONSTRUCTION DECLINE AND 18% DECLINE COMPARED TO 2010 AND A FALL OF 54% SINCE 2007. WHILE EXTREMELY DIFFICULT BUSINESS ENVIRONMENT FOR MY FRIEND IN THE BUILDING OF HOMES, IN THE LONG RUN THE SURVIVORS WILL BE HEALTHIER AND MORE PROFITABLE.                                                            LAST THE RENTAL MARKET SHOWS THAT GROWTH IS OCCURRING WITH YELLOWSTONE COUNTY WITH LESS UNITS AVAILABLE AND POSITIVE GROWTH IN RENTAL RATES. AS THE RENTAL MARKET CONTINUES TO STRENGTHEN THIS WILL CONTRIBUTE TO THE CONFIDENCE OF PURCHASERS SINCE AT THIS TIME THERE IS JUST $86 DOLLARS DIFFERENCE IN THE MONTH COST TO RENT THE MEDIAN HOUSE FOR RENT AS COMPARED TO PURCHASING THE MEDIAN PRICED HOUSE PAYMENT WITH TAXES AND INSURANCE. THAT DIFFERENCE IN 2008 WAS $391.    

FINALLY I WANT TO THANK ALL MY GREAT CUSTOMERS FOR ALLOWING ME TO HELP THEM ACHIEVE THEIR REAL ESTATE GOALS IN 2011, ALTHOUGH A DIFFICULT, WITHOUT LOYAL CUSTOMERS IT WOULD HAVE BEEN A MORE DIFFICULT YEAR.