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2011-09-29T18:50:47Z

An Overview of the Workforce Housing Classes offered in Kalispell Oct. 12th & 13th

Affordable Housing Drives Missoula Market Forward in 2009

2010-01-08T01:47:00Z

In one of my previous entries in November I talked about the growing importance of the affordable ($100,000 to $250,000) segment of the Missoula housing market. Now that we have the final numbers for 2009, I can report that the trend continued, and in fact increased, both in terms of total dollar volume and unit sales signaling a major shift in our housing market. Check out the graphs below:

But here's the real news, look at how affordable housing surged forward in 2009 in dollar value:

What’s it mean? The total dollar value and number of homes sold in Missoula under $250k are both increasing, while homes priced higher are actually still declining in terms of unit volume and dollar value. So if you’re selling property priced higher than $250,000, expect lots of price pressure from the limited number of buyers out there. On the other hand, if you’re in the lower-priced category, things are much rosier with good activity. I’ll have a much more detailed look at the affordable segment in my next post.

PS: I’m looking at numbers for the “metro Missoula” area that’s roughly between East Missoula and the “Y” in the north and Lolo in the south. In terms of homes, I’m counting all residential types, but no commercial.

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2009-12-07T19:48:00Z

Overview and Summary of posts on affordable home market in the Missoula area

Affordable Housing Market Stats-List to Sale Price Ratio and Days on Market

2009-11-16T19:21:00Z

Below are my two final graphs that look at sales statistics for affordable homes over the last three years. Check out my two previous posts to learn about the price, home types and areas I included in the search.

The list to sale price ratio is derived by dividing the final list price by what the home actually sold for, i.e. if a home's list price was $100,000, and then it actually sold for $96,800, then its ratio is 96.8%. As you can see from the graph, homes are being discounted at an average that's slightly higher than 3% in most of 2009, which is much different than in 2007 where homes sold within 1 to 1 1/2% of list price. This simply means that sellers are more willing to discount under pressure from buyers. Even though the discounting is increasing, it's still very limited compared to other locations and product segments.

Average days on market is simply a measure of time from when a house is listed on the MLS until it's sold. Overall, the trends have been pretty consistent, more days on market over the winter, shorter sales times in the summer. 2009 has tracked pretty close to the other 2 years with the exception of the third quarter. The next couple of months will tell us if that's just a temporary increase, or if the market for affordable homes is getting softer.

Affordable Housing Market Stats-Ave. List & Sold Prices

2009-11-16T19:21:00Z

Below are the charts for Average List Price and Average Sold Price for homes in the $100,000 to $250,000 range for Missoula.

Great news if you're a seller, but a tougher message if you are a buyer (except for the last 2 quarters of 2009). Average list prices in this catagory continue to increase overall year to year, even with the addition of more condo units which frequently carry lower prices and price pressure from aggressive buyers. These numbers are based on the final list prices of homes before they were sold or withdrawn from the market.

I think 2007 was a fairly good expample of market trending we had come to expect, ie higher prices in the late spring and summer, with lower prices in the winter and early spring. 2008 was radically different, largely due to the bad economic news in October. For 2009, I think we saw some discounting as the year progressed and sellers became nervous about getting their homes sold before the first-time buyer tax credit ran out. Seeing average sold prices dip below 2007 in the 3rd of 2009 is amazing, but I don't think it signals the beginning of a trend and we'll probably see average sold prices go back up in the 4th quarter. Now that the tax credit has been extended--and expanded to other buyers--it will be interesting to see how we'll finish the year out.

Next I'll put up the numbers for average days on market and the list to sale price ratios which will tell us how long homes are staying on the market and willing sellers are to discount.

And now the Disclaimer and Qualifiers:
   Area: this area corresponds roughly to an area from East Missoula to Y and then down to Lolo
   Type: I included everything from single family homes to mobiles, priced from $100,000 to $250,000
   Source: the MOR MLS database (so this won't include properties sold without a Realtor)
   Accuracy: these graphs are meant to illustrate trends, not provide specific data-contact your agent for more detail
    **sales numbers are rounded to the nearest $1000

Affordable Housing Market Stats-Units Sold

2009-11-16T17:49:00Z

Today I'm going to begin posting the results of some research I did on affordable housing inventory in the Missoula area. I think you will see some interesting trends.

As you can see, the total number of affordable homes sold is down quite a bit from 2007, but have been pretty close to 2008 and actually better than 2008 in the 3rd quarter. 1st quarter and 4th quarter numbers are usually lower due to the effects of winter, and even with the present market stresses we should continue to see seasonal variation.

Please keep in mind the following qualifiers:
   Area: this area corresponds roughly to an area from East Missoula to Y and then down to Lolo
   Type: I included everything from single family homes to mobiles, priced from $100,000 to $250,000
   Source: the MOR MLS database (so this won't include properties sold without a Realtor)
   Accuracy: these graphs are meant to illustrate trends, not provide specific data-contact your agent for more detail
    **sales numbers are rounded to the nearest $1000

Affordable Housing a Key Part of Missoula's Market

2009-11-11T20:07:00Z

I've written before about my focus on workforce housing both as an active agent and in teaching classes. But beyond how important I think affordable housing is, the numbers show that it is a huge, and growing, part of our total housing market. So far in 2009, homes that sold at prices between $100,000 and $250,000 comprise almost 72% of the total sales, which is up from last year's 66%. Click on the link to see the graph: graph of home sales by price. Part of this shift is the bigger relative decline in the number of sales of more expensive homes, at the same time that tax credits were stimulating first-time buyers to enter the market. I'll be putting up some more information on this market segment later in the week that will look at the trends in more detail.

I pulled the sales numbers from the MOR MLS database on single family homes (homes, condos, mobiles) in the Missoula urban area (E. Missoula to the Y and down to Lolo) priced above and below $250,000. Visit the Missoula Organization of Realtors' website at www.missoularealestate.com to learn MOR.

FHA Default Rates

2009-11-05T02:05:00Z

Some thoughts on a radio program discussing increasing default rates on FHA loans. Its only a minute and a half long, give it a try!

First Time Buyer Tax Credit

2009-10-30T20:29:00Z

The first time buyer tax credit for 2009 will expire in just 1 month. If you are a buyer who's been planning on taking advantage of this tool, its probably too late if you are not already "under contract", since most transactions are taking about 45 days (at least) to close. What to do? Call or email your local congressional representative and ask them to support the legislation to extend and expand the program that is working its way through the system right now. After that, find a Realtor, and get busy shopping! Prices are usually at their lowest in the winter and it looks like interest rates are on the rise for 2010, so there's no time to waste. For more details on the credit go to http://www.irs.gov/newsroom/article/0,,id=204671,00.html. Happy hunting!

Great Housing Info Website

2009-10-23T23:53:00Z

This year I've beome involved in teaching a class for Realtors called Workforce Housing. In the class we learn about the programs and resources that are available to help workforce housing buyers (folks that earn somewhere from 60 to 120% of the area's median household family income) get started on the path to owning a home. One the best tools I've encountered is a website created by the Montana Assoc. of Realtors that is filled with great information about everything from special lending programs to the closing process, www.MTHousingResources.com . Check it out!

New Single Family Housing Starts Down Substantially

2009-04-10T01:45:00Z

The difference between 2007 and 2008 new family housing starts is amazing and gives a good indication at just how slow the market was in 2008. In Ravalli County for instance, starts were down to 197 from 303 in 2007, a decrease of 34.98%. Missoula County's situation isn't nearly as gloomy, with a decline of 21.46% from 233 to 183 units in 2008. This doesn't include building in the City of Missoula though, where 293 homes were built in 2007 and only 186 in 2008 (a decline of 36.52%). Overall, I think new construction slowed a little more than sales in general, so we should begin to see some of the excess inventory get sold and absorption rates fall to more normal levels, especially in light of the stronger market in the first quarter of 2009.

Stats were taken from the Montana Builder, 4th Qtr Ed.

Rural Property Issues Part 4 (vacant land, final)

2009-02-05T19:56:00Z

Ok, here we are at the end of the rural property series. I hope you've found it useful. Please keep in mind that this is by no means a complete list. If there's one thing I've learned selling real estate over the last 5+ years, it is that every deal is different and so is every piece of land.

Weeds-I'll bet it would be hard to buy a piece of land in Western Montana without weeds. And the bigger the parcel, the more expensive they are to control. Additionally, many of the control measures for the really nasty weeds are pretty toxic herbicides that can have significant downsides. Currently, I don't think the counties diligently enforce the weed control regulations that are on the books, but that doesn't mean they won't in the future and many land owners could be facing significant costs. A really good source of information about weeds and their control are the county extension officers. They can identify the weeds in question and point you toward reliable control methods and contractors.

Waste Sites-bare land parcels are carved out of larger pieces, many of which were farms or ranches at some point. Sometimes, several smaller homesteads were amalgamated into one larger ranch, with the old buildings being burnt or bulldozed. Those old home sites and even the existing ones may have had open, private garbage dumps where refuse was thrown. Most likely, they also had tanks that stored different kinds of fuels, which may or may not have leaked significant quantities over the years. Either way, waste sites are always difficult and expensive to clean up. Look at the property closely and try to detect areas that have been disturbed, or for areas where old, rusty junk is in evidence. And it never hurts to ask the neighbors if there was ever fuel stored on the place, or about the presence of a dump. If they've been around for a while, they'll likely know. If you have any doubts, have a professional check it out.

Don't let all these issues scare you away, there are lots of great parcels available in Missoula and Ravalli counties, and prices are much better than they have been for years.

Rural Property Issues Part 3 (vacant land, continued)

2009-01-23T21:21:00Z

Access and Easements-many roads and easements are clearly marked on the ground, noted on plat maps and described in title documents. But plenty are not, and stem from past handshake agreements created by neighbors who are now long gone. Be sure to review all title documents and maps carefully, and research each question to your satisfaction with help from your Realtor and title professional.

Conservation easements are a completely seperate issue are vary by type. In general, they control how the land may be used so as to benefit, or conserve, valuable resources and as such can have a major impact on the value of the land. Conservation easements are recorded documents and should appear on the title policy. Be sure to read and understand the entire easement document.

Septic permits-septic permits on un-improved land go through several different stages and can come in several different varieties. If there is an existing permit, be sure to understand the type, location and size of system that has been approved. Costs for systems can vary by tens of thousands depending on type. If the site doesn't have a permit, don't just assume you can get one. The approval process can take months and will depend on groundwater, proximity of surface water, slope of the site, permeability of the soil and several other factors. In Ravalli County, adding a bathroom to your shop or barn (if it's not connected to the house) will take a whole new septic system and permit, as well as a portion of the subdivision review process. County sanitarians are the best source of information.

Next time: weeds and waste sites

Rural Property Issues Part 2 (the land)

2009-01-22T00:47:00Z

Rural land (with or without a dwelling) has many unique issues attached to it, even if you only thinking of it for a single residence, not development potential. Here is a partial list of items that deserve scrutiny:
Zoning-As far as I know, no county in Montana has county-wide zoning in place, and that's certainly true of the counties in my market area, Ravalli and Missoula. There are some types of control in place for specific areas, such as limited county zoning, municipal zoning, voluntary zoning and the covenants and restrictions attached to existing subdivions.
But for the vast majority of the land, no zoning is in place. This means that your neighbor can just as easily build a beautiful home (just like yours!) as put in a hog farm, junk yard or race track. As you can imagine, this could have a major negative impact on the value of your property, so be sure so understand the area your interested in.
Irrigation-Water has been one of the single biggest issues surrounding development in the west. And of course, understanding the water rights that are attached (or not!) to a piece of property can play a big part in its value and usefullnes for a specific purpose. Complicating the whole picture is that there are literally hundreds of different irrigation districts across the state, each one with different rules, regulations and delivery systems. Good sources of information for a particular parcel include your Realtor, the Montana Dept. of Natural Resources, water rights experts and neighboring landowners.
Boundaries-the fence is probably not where the boundary is. If you can't find the pins that show the corners clearly, do a survey. It's the best money you'll ever spend, saving conflicts with the neighbors, utilities and the copnty over fences, easments and plenty of other issues.

to be continued.....

Rural Property Issues Part 1 (the house)

2008-11-25T18:25:00Z

Lately I've been working with buyers on rural properties in Ravalli County. Rural homes have a different set of issues than urban homes do, and a wise buyer will go the extra mile to check such items out. Here's a partial list of the things I think deserve attention before the purchase:

Septic System: get it pumped and inspected so you know what you're getting into. Also pull the septic permit at the county to insure that the permit size, based on the number of bedrooms, matches the home you're buying or will build.

Well: it's great to be off the grid when it comes to water, but remember that the well log or water rights certificate may not really represent the well's actual production. Get it tested, both for quantity and quality (you might as well know if you'll need a water softener right away).

Propane Tanks: be you sure you know if the tank is owned or rented by the seller, and if it is being transferred to you, how you will handle the value of the fuel left (or not) in the tank on sale. If it is rented, you'll need to contract with the vendor to keep the tank on-site. Oh, propane tanks can be buried (avoiding the giant metal thing in the yard), so just because you don't see one, don't assume it's natural gas.

Home Inspections: always do a home inspection, even on new construction. We Bitterrooters are hardy and independent breed, and like to do many home repairs and construction ourselves, sometimes with varying success. I am just as guilty of this as the next guy. With no real permitting process in place, it is important to have a professional's perspective on the home.

Not the Bottom Yet

2008-11-13T15:54:00Z

So far, most of the decline in the real estate markets has taken place in a climate of steady employment. Now that unemployment numbers are rising quickly, I think we are going to see an even bigger impact on prices and sales volume. The relationship between employment and home ownership is very powerful and more than any other factor contributes to an individual’s ability to purchase a home (or to pay the mortgage on the one they have). Folks that have perfectly reasonable mortgages on homes they can afford while employed, may be forced to sell, further increasing inventory and helping to drive down prices. I would urge the government to take quick action to stem the tide of rising unemployment, before it makes a bad housing situation worse.

Buying in a Down Market

2008-11-03T22:55:00Z

If you’re buying: what’s not to love about being in the drivers seat for a change? Both the price and number of homes for sale in our area have been growing steadily (but not exponentially) for years. This has meant that sellers have felt they are in the driver’s seat, leaving buyers to compete with each other on price and terms. Now the tables have turned. There are fewer buyers in the market and plenty of inventory. A big impact is psychological; with the national housing and economic news being so bad, it can change sellers’ attitudes from aggressive to flexible. I’m not talking about a rout here; remember that home prices, overall, are still increasing in the Missoula market. So where’s the value? In general, I think buyers can expect sellers to be more willing to bargain on the price and open to including incentives like points, repairs or closing costs. Homes that have been on the market longer, are in rougher shape, or are vacant will be especially vulnerable to bargaining. And as we head into winter, many sellers will re-evaluate whether they want to hold on to a home. The conclusion is, if you’re thinking about buying a home, now is a great time. You’ll get a good deal on the best inventory and maybe a real bargain on a weaker product. If you wait until the market starts to improve, it will be too late.

Selling Successfully in a Down Market

2008-10-23T22:40:00Z

Welcome back! Yesterday we talked about the state of the Missoula residential market. Here's what it means if you’re selling: be prepared to compete, winning either the price contest or the beauty contest. There is an astonishing amount of inventory out there and the limited number of buyers will select the best value for the money. You’ve got to think like a buyer, and they usually come in two general catagories: the value buyer and the turn-key buyer.

*The value buyers want a “deal”, and they are willing to put up with some dirt, clutter or deferred maintenance to get a low price. These homes are much cheaper (10-20%) than other homes with the same basic features.
*The turn-key buyers want to be able to move in tomorrow. With no work. Everything has to be well maintained and spic and span. The cleanest, nicest homes will sell the fastest. The good news is that turn-key buyers appear to be willing to pay more for what they want.

Of course, don’t forget that most buyers select the home by neighborhood first, so be sure and take that into consideration when settling on a price. If you need to sell fast in this market then make sure you have a turn-key clean home at a value price and you'll beat the competition every time.

3rd Quarter Residential Market Stats

2008-10-22T20:56:22Z

Well I’ve finally gotten a chance to have a hard look at the MLS stats from the Missoula area residential real estate market for the 3^rd quarter, focusing on all residential under $750,000 in the “metro” area (i.e. within about 10 miles of downtown. I compared data from 2005 to 2008, January to September.

*The bad news: in terms of the total number of homes sold, we’re down about 35% (YOY).

*The good news: median sales prices were up about 6% (YOY).

*The amazing news: sales volume declined all across the different price bands, from first time buyer properties to luxury homes, by about the same percentage.

You might ask, "How is it possible that demand is down, but prices are increasing?". I have no idea, having had some trouble in economics class in college. But if I were going to guess, I'd say it has a lot to do with the fundamental health of our market. I think what has changed, is that the marginal buyers (sub-prime folks) have largely left the market. They made up a strong percentage of our demand. The remaining buyers are the same well-qualified core that has always been there, and they are willing to pay a fair (and increasing) price for the home they want. If it feels like we have giant oversupply of inventory, its because fewer homes are selling, and there are a lot more homes on the market. But it does not mean that our local market has "crashed".

More later on what this means for buyers and sellers specifically.

PS: YOY means year-on-year comparison, either that or its a shortened version of "oy vey".

Go Through the Gateway!

2008-10-08T23:27:00Z

Right now, many folks are wondering how to take advantage of the current real estate market and get a "real" deal. There are opportunities out there, especially if you are a gateway buyer. A gateway buyer is someone who is moving up to a home in a more expensive price band. Lets say you own a $250,000 home (2007 prices), but to sell it right now, you may only be able to get $230,000. You take a $20,000 "haircut". Here's the upside: you purchase a $350,000 home (2007 prices) but negotiate the price down to $300,000. The seller takes a $50,000 “haircut”. When the market has recovered a few years down the road, that $50,000 should convert to equity. If you'd like more information contact me at ryon.brewer@coldwellbanker.com