NOVEMBER 30th 2015
“HAVE A GREAT HOLIDAY AND MERRY CHRISTMAS”
November’s market update starts with “THANK ALL OF YOU FOR YOUR SUPPORT AND BUSINESS”.
The end of NOVEMBER 2015 numbers, closed sales up +5%, pending sales up +27 %, inventory down -1%, and interest rates down -3% from the year earlier. The interest rate trend of year over year declines will end this next month (November) would be my prediction (I WAS WRONG IN OCTOBER).
As of the end of the week of December 11th the rig count in North Dakota is down -121 rigs since last year, 58 working in 2015 and 179 working in 2014. The week December 11th 2014 in Montana 9 rigs were working there are ZERO rigs this year. 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 December 2009 there were 50 rigs working, December 2005 there were 18 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, 2146 through NOVEMBER 2015, as compared to 2040 in NOVEMBER 2014 showing an increase in closed transactions of +106, which translates into a +5% increase year over year. NOVEMBER 2013 there were a total of 2051 closed sales. The longer look back, 2006 there were a total of 2417. In order for 2015 to match 2006 (the high point in transaction) there would need to 271 closed sales in December an unlikely event (Only 71 closed by 21/15/2015). So into 2016 to try and match or the record set in 2006.
Residential pending unit sales in 2015 are up +27% year over year (371 units pending). To compare; 2014 NOVEMBER pending unit sales (292 units pending) were up +17% over NOVEMBER 2013 (249 units pending).
Interest rates decreased year over year comparing NOVEMBER 2015 (3.90%) to NOVEMBER 2014 (4.00%) interest rates declined -3%. Going back a year NOVEMBER of 2014 (4.00%) to 2013 (4.26%) interest rates were a -6% decrease from NOVEMBER 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 NOVEMBER 2015 (606 units active) is down -1% year over year, as a comparison, in NOVEMBER 2014 (612 units active) unit inventory was down -1% comparing 2013 (619 units active) (comparing 2013 to 2015 inventory is down -2.1%).
Market time (the time to receive any offer) in NOVEMBER shows an decrease of -8% year over year(46 days 2015 vs 50 days in2014 and 48 days in 2013) , as a comparison in 2014 market time was essentially the same as 2013. The absorption rate of inventory shows flat -0% in time year over year, 137 days 2015, as a comparison NOVEMBER 2014 absorption time was down -7% year over year 137 days, bench marketing against 2013 148 days.
Single family permits: total single family permits for 2015 have an increased +8% for year over year (2015 388 permits, 2014 360 permits, 2013 393 permits). For NOVEMBER 2015, 30 single family permits were issued, in NOVEMBER 2014 29 single family permits were issued a dead heat 2014 (NOVEMBER 2013 NOVEMBER saw 21 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 NOVEMBER of 2015, the market place had an average of 403 units advertised for rent each Sunday, a year over year in decrease of -3% (or 11 less units advertised each Sunday), as a comparison in 2014 inventory for rent was 414 units advertised in Sundays, up 22% vs. NOVEMBER 2013, only 340 units were advertised each Sunday. Rent average asking price for an apartment have moved up $764 for NOVEMBER 2105 as compared to $722 for NOVEMBER 2014 an increase of +6%, as a comparison NOVEMBER 2014 was +2% higher than NOVEMBER 2013 ($709 asking price). So rents are increasing slightly faster or at the national consumer price index. Homes for rent, through NOVEMBER 2015 average asking rent is $1,198 for 2014 asking rent for a home was$1,182 an increase of +1% year over year on top of a +6% rise 2014 over 2013. (2013 average asking was $1,124.) The trend in availability has been up over the last ten weeks, year over year the number of units advertised is up 197 over the same week in 2014, trend 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, NOVEMBER 2015 had an average interest rate of 3.90% (down -3% from 4.00% NOVEMBER 2014) and NOVEMBER 2013 the rate was 4.26% for a 30 year fixed rate , so rates decreased -8.45% from 2015 to 2013. To show the impact, the payment on the average sales priced house in NOVEMBER of 2015 was $1,502 PITI (average sales price $252,754), NOVEMBER 2014 it was $1,472 PITI (average sales price $244,716), NOVEMBER 2013 it was $1,467 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||11/30/2015||2014||2015||or -Decrease|
|all information comparing year to date|
|Residential Closed Sales Units||2040||2146||5%|
|Residential Pending Sales Units||292||371||27%|
|Residential Active Property For Sale||612||606||-1%|
|Average sales price Single family Home||$244,716||$252,754||3%|
|Average Square feet Single family Home||2418||2425||0%|
|Median sales price Single family Home||$219,900||$226,000||3%|
|Median Square feet Single family Home||2251||2256||0%|
|Average Days on Market Till Offer Received|
|Single Family Home||50||46||-8%|
|Absorption rate -||TIME IN DAYS|
|Time it would take for all existing||137||137||0%|
|properties to sell with no new inventory|
|coming into the market place - residential|
|SINGLE FAMILY PERMITS MONTH||29||30||3%|
|SINGLE FAMILY PERMITS YEAR||360||388||8%|
|Average # Rentals Advertised Sundays||414||403||-3%|
|Average Asking Price Rental Home||$1,192||$1,198||1%|
|Average Asking Price Rental Apartment||$722||$764||6%|
|Number of Employed Yellowstone County||77,384||79,800||3.1%|
|Freddie Mac 30 year fixed rate commitment||4.00%||3.90%||-3%|