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Market update at glance
October 30th 2015
“10 months down, 2 months to go”
October’s market update starts with “oh my god where has the year gone”.
The end of October 2015 numbers, closed sales up +6%, pending sales up +14 %, inventory down -6%, and interest rates down -6% from the year earlier. The interest rate trend of year over year declines will end this next month (November) would be my prediction.
As of the end of the week of November 6th the rig count in North Dakota is down -118 rigs since last year, 63 working in 2015 and 181 working in 2014. So far the Million dollar question for 2015 “Will the decline in energy costs and interest rates offset any possible decline in business and jobs dues to the decrease in energy/oil costs?” So far, with the rapidity of the decline in the rigs working in North Dakota, no major discernable effects to the Yellowstone county economy still hold true. As a little historical perspective in November 6th 2009 there were 54 rigs working, November 4th 2005 there were 23 rigs working, interesting to think about the rapidity of incline and decline in ten years.
First let’s look at closed transactions, Number of closed sales in Yellowstone County, 1988 through October 2015, as compared to 1884 in October 2014 showing an increase in closed transactions of +104, which translates into a +6% increase year over year. October 2013 there were a total of 1897 closed sales. The longer look back 2006 there were 2417. In order for 2015 to match 2006(the high point in transaction) there would need to 429 closed sales in November and December an unlikely event. So into 2016 to try and match or the record set in 2006.
Residential pending unit sales in 2015 are up +14% year over year (371 units pending). To compare; 2014 October pending unit sales (326 units pending) were up +22% over October 2013 (267 units pending).
Interest rates decreased year over year comparing October 2015 (3.80%) to October 2014 (4.04%) interest rates declined -6%. Going back a year October of 2014 (4.04%) to 2013 (4.19%) interest rates were a -4% decrease from October 2013. My belief is we have finally run the course of year over year interest rate declines. While I do not believe we will huge increases more than likely the 30 year should run in the range of 4% to 4.5% still great by long historical perspective.
The residential active properties for sale inventory in October 2015 (606 units active) is down -6% year over year, as a comparison, in October 2014 (647 units active) unit inventory was down -4% comparing 2013 (676 units active) (comparing 2013 to 2015 inventory is down -10.35%).
Market time (the time to receive any offer) in October shows an decrease of -6% year over year(45 days 2015 vs 48 days in2014 and 48 days in 2013) , as a comparison in 2014 market time was the same as 2013. The absorption rate of inventory shows an decrease of -4% in time year over year, 131 days 2015, as a comparison October 2014 absorption time was down -7% year over year 136 days, bench marketing against 2013 147 days.
Single family permits: total single family permits for 2015 have an increased +8% for year over year (2015 358 permits, 2014 331 permits, 2013 372 permits). For October 2015, 56 single family permits were issued, in October 2014 56 single family permits were issued a dead heat 2014 (October 2013 October saw 32 permits issued). A huge increase in single family permits happened in February 2015 due to code changes that became effective March 1st that add $2 to $3 dollars per square foot cost to a new home) March saw a slight decline in permits issued.
Now for residential rentals, Through October of 2015, the market place had an average of 389 units advertised for rent each Sunday, a year over year in decrease of -6% (or 27 less units advertised each Sunday), as a comparison in 2014 inventory for rent was 416 units advertised in Sundays, up 21% vs. October 2013, only 343 units were advertised each Sunday. Rent average asking price for an apartment have moved up $765 for October 2105 as compared to $718 for October 2014 an increase of +7%, as a comparison October 2014 was +2% higher than October 2013 ($706 asking price). So rents are increasing slightly faster or at the national consumer price index. Homes for rent, through October 2015 average asking rent is $1,201 for 2014 asking rent for a home was$1,186 an increase of +1% year over year on top of a +7% rise 2014 over 2013. (2013 average asking was $1,106.) The trend in availability has been up over the last eight weeks, worth watching as we progress into winter which is always a slow rent up time.
A factor affecting the market place is interest rates, According to Freddie Mac, October 2015 had an average interest rate of 3.80% (down -6% from 4.04% October 2014) and October 2013 the rate was 4.19% for a 30 year fixed rate , so rates decreased -9.30% from 2015 to 2013. To show the impact, the payment on the average sales priced house in October of 2015 was $1,482 PITI (average sales price $252,492), October 2014 it was $1,476 PITI (average sales price $244,194), October 2013 it was $1,454 PITI (average sales price $236,220).
So even with the demographic shifts in renting versus buying I would venture that Yellowstone County has a very stable base in home sales as compared to economic activity.
All the trends require watching when thinking about the health of the market overall. I hope you find the information both useful and enlightening, if you have any questions about either buying, selling or the market in general do not hesitate to call or email
|Market update at glance||Year||Percentage Increase|
|Yellowstone County||10/31/2015||2014||2015||or -Decrease|
|all information comparing year to date|
|Residential Closed Sales Units||1884||1988||6%|
|Residential Pending Sales Units||326||371||14%|
|Residential Active Property For Sale||647||606||-6%|
|Average sales price Single family Home||$244,194||$252,492||3%|
|Average Square feet Single family Home||2421||2426||0%|
|Median sales price Single family Home||$219,900||$226,500||3%|
|Median Square feet Single family Home||2256||2270||1%|
|Average Days on Market Till Offer Received|
|Single Family Home||48||45||-6%|
|Absorption rate -||TIME IN DAYS|
|Time it would take for all existing||136||131||-4%|
|properties to sell with no new inventory|
|coming into the market place - residential|
|SINGLE FAMILY PERMITS MONTH||56||56||0%|
|SINGLE FAMILY PERMITS YEAR||331||358||8%|
|Average # Rentals Advertised Sundays||416||389||-6%|
|Average Asking Price Rental Home||$1,186||$1,201||1%|
|Average Asking Price Rental Apartment||$718||$765||7%|
|Number of Employed Yellowstone County||77,211||79,632||3.1%|
|Freddie Mac 30 year fixed rate commitment||4.04%||3.80%||-6%|