MARCH 31st 2016
“FIGURES NEVER LIE, YET LIARS FIGURE. WHERE’S THE MARKET 2016”
March’s market update starts with “SO WHAT’S THE REAL DIRECTION OF THE MARKET”.
One thing I have learned about watching the market and helping clients and customers make good decisions about real estate buying and selling: first and foremost put together the most accurate and representative information I can find. Having do this for 30 plus years I know if I want no matter how the market is performing I can slant the information either in a positive or negative light. As an example one measurement of the market place is the percentage of pending sales to active listings, basically velocity, currently 74% (meaning you would expect 740 pending sales per 1000 active properties for sale) I could say wow that is real good, it’s up 42.30% from 2006 (peak year in sales) or I could be glum and say it is down 6.33%from last year. Both statements are true yet do they give a person good information. Looking at the whole basket of information will paint a truer picture. ie: pending sales now 2016 447, pending sales 2015 396, pending sales 2006 320. So while velocity is important and number of pending sales is important the combination of the two give a greater knowledge of where the market actually stands.
The end of MARCH 2016 numbers, closed sales up +7%, pending sales up +4%, inventory up +20%, and interest rates down -2% from the year earlier. My prediction, all things being equally, rates should be marginally higher in 2016 than 2015. Yet the wild card is the international markets where several central banks are forcing negative interest rate (banks charge to hold your money) if that becomes wide spread, should force money to flow towards the United states capital markets which in turn most probably will lower rates. Have to watch this one!!
As of the end of the week of April 8th 2016, the rig count in North Dakota is down -61 rigs since last year, 27 working in 2016 and 88 working in 2015. The week April 8th 2015 in Montana 1 rig was working there are ZERO rigs this year 2016. So far the Million dollar question (again for 2016) “Will the decline in energy, 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 the rigs working in North Dakota, we are seeing discernable effects to the Yellowstone county economy (although not major trauma). As a little historical perspective in April 2006 there were 29 rigs working in North Dakota, April 2006, there were 24 rigs working in Montana. The peak year in activity was 2012 in April of that year 196 Rigs working North Dakota, 18 rigs in Montana, interesting to think about the rapidity of incline and decline in ten years.
First let’s look at closed transactions, Number of closed residential sales in Yellowstone County, 422 through MARCH 2016, as compared to 425 in MARCH 2015 showing an decrease in closed transactions