MARKET UP DATE AT GLANCE THRU FEBRUARY 2009
FEBRUARY saw a significant increase in buyers in the market. THOSE buyers coming into the market (APPARENTLY first time buyers) were responding to their best self INTEREST historically low rates and the first time buyer tax credit, which is refundable on your 2008 taxes if you close before you file.
the most active SEGMENT of the market was between 160k to 180k, that price range saw it's share of the market place jump from 13% by unit volume in 2008 to 17% by unit VOLUME in 2009. thus the comments above.
the question that will unfold over the next couple of months is, did buyers that would have been in the market later in the year purchase earlier, due to the tax credit. IF that proves to be the case we will see a SOFTENING of the pending sales compared to 2008 as we come into spring.
inventory levels have moderated TO 25% PLUS from a year ago, THE decrease from a month ago is AFFECTED by the increase in pending SALES, so again the comment about stealing buyers from later also applies to the INVENTORY numbers.
CONSTRUCTION numbers IMPROVED in FEBRUARY, single family permits, yet still show a very SIGNIFICANT decline FROM LAST year. to put it in PERSPECTIVE the first 2 months of the year are as follows 1. 2009 17 single family permits, 2. 2008 41 single family permits, 3. 2007 54 single family permits. the new CONSTRUCTION market will struggle this year BECAUSE OF constrained funding and the DIFFICULTY of COMPETING against EXISTING homes that are priced SIGNIFICANTLY lesS THAN CONSTRUCTION cost would be to build a SIMILAR home. as i have stated previously the slowing in home construction is a POSITIVE in the overall market place because it reduces overall inventory, yet THAT DECREASE in new CONSTRUCTION sales also has an impact on sales price and size of homes that go iNTO the mix of sales.
the home sales prices below SHOW a slight price decline year to year YELLOWSTONE county has seen about a 2% to 3% decline in closed price. the actually sales price number is affected by the slow down in THE above 250k range and the SIGNIFICANT INCREASE in sales in the 160 to 180k range mentioned above.
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the two POSITIVE forces in the MARKET are the STRENGTH of the below $200,000 and no significant increase in FORECLOSURES of HOMES.
THE $200,000 and below STRENGTH is CAUSED, I BELIEVE, FOR two primary reasons #1 unemployment in YELLOWSTONE IS SUB 3.5% COMPARED to the state average of 5% and the NATIONAL of 8.1% giving people who want to own their home a job and A BELIEF that they will be employed, along with HISTORICALLY low INTEREST, approximately 5.25% on a 30 year fixed rate, and you have a good case for buying a home if your intention is staying put three plus years.
THE #2 POSITIVE IS NO SIGNIFICANT FORECLOSURE activity. the importance of this fact can not be UNDERSTATED. when you look at other market places AND THE case /shiller index declines, the driving force is FORECLOSED properties sold by lenders.
the #3 positive is the $8,000 refundable tax credit for first time home buyers
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