Community News

One of the key indicators of real estate market stability is the rise and fall of existing –home sales.  Defined as “completed transactions that include single-family, townhomes, condominiums and co-ops”, the level is tracked on a monthly basis nationwide.  March’s final numbers, as reported by the National Association of Realtors (NAR), state that sales in this category were up 3.7 percent in March.  Breaking this data down further brings insight that investors versus owner-occupied buyers are a huge catalyst in this increase.  Though positive, this signifies a decrease in the number of first-time homebuyers, which is unfortunate for the housing market as a whole.  The important factor is that well-positioned investors still have the ability to pay cash for homes that are in distress situations, i.e. foreclosures or short sales, and this segment of the market has also risen.  March numbers indicated the percentage of foreclosures and short sales nationally has increased to 40 percent of total sales, coupled with 35 percent of all resold homes being purchased with cash, a record market share amount.  To correlate these numbers locally, according to the Southwest Montana Multiple Listing Service (MLS), March sales of foreclosures and short sales in Bozeman and the immediate surrounding area comprised 38 percent of total sales, with 31 percent being reported as cash sales. 

Another national indicator that investors are playing a larger role in the recent sales increases is that it has been noted that sales of homes priced under $100,000 have increased by 10 percent over sales one year ago.  On a local level, with a breakdown of $150,000 and less for residential sales, there were 14 closings in March of 2011 versus 9 in March 2010, which is a 56 percent increase in that price point.

According to Lawrence Yun, NAR chief economist, “Although home sales are coming back without a federal stimulus, sales would be notably stronger if mortgage lending would return to the normal, safe standards that were in place a decade ago.”  The median existing-home sales price nationally for all housing types in March was $159,600 which was a decrease of 5.9 percent from the previous year in the same month.  When we look by region, existing-home sales in the Northeast rose 3.9 percent with a median price of $232,900.  The Midwest witnessed a 1.0 percent increase and a median price of $126,100.  The South was up 8.2 percent in sales with a median sales price of $138,200.  Sales in the West actually fell 0.8 percent with a median price of $192,100.

Locally, single-family sales numbers are up by 50 percent in the city of Bozeman for the first quarter of the year over the same period in 2010, with the median sales price down 2.9 percent to $237,000.  Belgrade sales were down by 3.2 percent and the median sales price was flat.  Good news from over the hill, the Livingston market is up 19.2 percent year over year in units, with the median sales pricing increasing 15.1 percent to $175,000.  AND…even better news occurred in the local condo/townhome market.  The number of sales for the first quarter of 2011 in Bozeman was up 61.3 percent, from 31 to 50 units.  The median sales price is down 5.9 percent to $150,000.  There appears to be a healthy mix of primary home buyers and investors in the affordable segments of our markets.  The parent investor and out-of-state buyer continue to strengthen in the local market.