Through the looking glass - Alice in the wonderland of Housing

By
Industry Observer with Howard Sumner Consulting

Through the looking glass - Alice in the wonderland of Housing

What follow is an analysis of Yellowstone County and the housing market to see if we can discern where it might head over the next couple of years by understanding income and household growth to see if we are in “balance” or has there been more housing produced than what is needed by growth or has pricing outpaced income.

Two things that are important to know 2006 was the year in which the greatest number of residential properties were sold in the mls and 2013 was the (I think) the bottom of the interest rate cycle. Another important piece of information to know, 2013 is the most current year for income data form the census bureau, actually the information comes from IRS tax returns filed in Yellowstone County, so in theory, truly represents household income distribution. 

 

     

Comparing Yellowstone county 2006 to 2013 income distribution and size difference

Subject

 income distribution and size difference

 

 

 

Households

size difference

 

 

 

2006

2013

households

Total

55050

61439

+6389

Less than $10,000

8.2%

5.8%

-951

$10,000 to $14,999

7.2%

6.9%

+276

$15,000 to $24,999

13.0%

11.2%

-275

$25,000 to $34,999

12.4%

9.7%

-867

$35,000 to $49,999

14.2%

14.0%

784

$50,000 to $74,999

21.3%

19.8%

+439

$75,000 to $99,999

12.8%

12.6%

+695

$100,000 to $149,999

7.2%

11.6%

+3163

$150,000 to $199,999

2.6%

4.4%

1272

$200,000 or more

1.1%

4.0%

+1852

 

100%

100.0%

 

Median income (dollars)

$43,377

 $52,610

 +$ 9,233

 

 

 

 

Mean income (dollars)

 $53,419

 $71,723

 +$18,304

 

     

 

 

% increase median income

     

121.3%

 

 

     

 

 

% increase mean income

     

134.3%

 

 

         

increase housing units

 

 58,230

 

   64,886

      + 6,656

 

         

employment

 

 77,278

 

   76,267

      (1,011)

 

         

% of jobs over households

 

140%

 

124%

 

 

         

% of households to housing units

 

94.54%

 

94.69%

 

Household income increase as compared to housing price increase from 2006 to 2013

The average sales price of a home increased 23.24% 2006 to 2013, while the average household income increased 34.3% 2006 to 2013. The the actual payment for the average sales priced home declined from $1,513 to $1,419 or 6.2% even with the increase in sales price (the decrease in payment was caused by the decline interest rates 2006 6.41% vs. 2013 3.98%). The percentage of average household income needed in 2006 was 33.99% of their monthly income, to purchase the average sales priced home.  Looking at 2013, the average percentage of household income needed was 23.74% of their monthly income to purchase the average sales priced home. This represents a 30.16% decline in the cost of purchasing a home in Yellowstone County to average household.

 

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Comments (3)

Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Howard,  these are positive numbers for Yellowstone County!

Aug 24, 2015 04:56 PM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, eXp Realty - Kalispell, MT
Helping your Montana dreams take root

Interesting information regarding Yellowstone County - I'm surprised at the price increase from 2006 to 2013. Great news for sellers!

Aug 24, 2015 08:15 PM
Sham Reddy CRS
H E R Realty, Dayton, OH - Dayton, OH
CRS

Facts are facts:

The percentage of average household income needed in 2006 was 33.99% of their monthly income, to purchase the average sales priced home.  In 2013, the average percentage of household income needed was 23.74% of their monthly income to purchase the average sales priced home. This represents a 30.16% decline in the cost of purchasing a home in some areas to average household.

Aug 24, 2015 08:48 PM