Market update at glance May 2012

End of May, another month through 2012. The market is moving substantially faster than what I expected, I truly believed that it would take till late summer to have the real positive improvement in numbers and then nothing like we have seen to date.  All the numbers are stand outs, so I will comment first on price movement. When you look at the  both the average and median selling price it appears the market is really making a movement and it has, yet not quite as big as it appears on the surface the “REAL APPRECIATION” YEAR OVER YEAR BASED BOTH ON PRICE AND SIZE IS A GOOD SOLID 2%. Reviewing the numbers below you can see the market has turned in all categories. This does not mean all the sudden that sellers have the upper hand in negotiations, but it does mean we have left the “buyers” market where the buyer had the upper hand in negotiations. We are now, for the time being, in a balanced situation where both parties need to be reasonable to successfully complete a transaction. I do expect prices to start moving in a stronger upward trend as demand stays in the measurement percentage improvements seen so far this year.  I have included graphs below for a bit of historical perspective on where we are today. Big improvement over 2011 and close to matching the “tax credit fueled market of 2010” and we should exceed 2010 levels no later than the end of July, yet we are still 15.5% below the 2008 figures in terms of sales so things are positive, yet we still have a ways to go to reach our previous levels of activity. Interest rates are still at their historical lows so it is a great time to make a move in the market. The rental market continues move to a strong landlords market, number of units 19% below last year and the median number units available less than in 2008, so rents will be moving in a direction to increase returns on income producing properties. The numbers for permits of new construction market for single family homes are eye popping 95% higher on a month to month comparison and more astounding 76% higher than a last year’s totals so far through the year. That being said, we are still 38.3% below the permit levels of 2007 which, in Billings, was the top year for permits.

The general comment I would make is typically once the market has turned and confidence has returned to buyers and sellers (which from the numbers below they indicate it has) the market should stay in a positive direction for the next five to eight years if history is any guide. My one caveat is, as always, unless our friends in Washington D.C. do something really stupid.

As always if you need more information about the market or buying and selling please call or e-mail.