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DECEMBER 31ST 2015
“LOOKING BACK, end of the year 2015 report”
December’s market update starts with “THANK ALL OF YOU FOR YOUR SUPPORT AND BUSINESS”.
The end of DECEMBER 2015 numbers, closed sales up +5%, pending sales up +21 %, inventory up +1%, and interest rates up +3% from the year earlier. The interest rate trend of year over year declines will end this month (December) would be my prediction, which is what happened. All things being equally, rates should be marginally higher in 2016 than 2015.
As of the end of the week of January 8th the rig count in North Dakota is down -119 rigs since last year, 49 working in 2016 and 168 working in 2015. The week January 11th 2015 in Montana 10 rigs were working there are ZERO rigs this year 2016. So far the Million dollar question (again for 2016) “Will the decline in energy costs and an increase in interest rates, show up as possible decline in business and jobs due to the decrease in energy/oil costs?” So far, with the rapidity of the decline and now the continuation for time 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, 2347 through DECEMBER 2015, as compared to 2229 in DECEMBER 2014 showing an increase in closed transactions of +118, which translates into a +5% increase year over year. DECEMBER 2013 there were a total of 2206 closed sales. The longer look back, 2006 there were a total of 2417. So into 2016 to try and match or the record set in 2006. As a side note and perspective, since 2006 Yellowstone county has increase on population by approximately 21,000, employment has gone up by approximately 3,400 jobs, average wage has gone by approximately $12,000 a per year per job, interest rate has dropped by 40%, so its costs approximately $15 less a month to own the average sales priced home in Yellowstone county even though the price is up by almost $60,000.
Residential pending unit sales in 2015 are up +21% year over year (262 units pending). To compare; 2014 DECEMBER pending unit sales (217 units pending) were up +17% over DECEMBER 2013 (186 units pending).
Interest rates increased year over year comparing DECEMBER 2015 (3.96%) to DECEMBER 2014 (3.86%) interest rates increased +3%. Going back two years DECEMBER 2013 (4.46%) interest rates were a -11.21% decrease in 2014 from DECEMBER 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% for 2016, still great by long historical perspective.
The residential active properties for sale inventory in DECEMBER 2015 (606 units active) is down -1% year over year, as a comparison, in DECEMBER 2014 (612 units active) unit inventory was down -1% comparing 2013 (619 units active) Continue Reading