Updated Market Stats in MT & Nationwide - Short Sales and Selling Short Free Markets
Updated second quarter real estate statistics for Gallatin County, Montana were released recently as were the figures nationwide for the month of April. I will first deal with the stats from Gallatin County, MT.
Some veteran agents of the Gallatin County market have said we are now "bouncing along the bottom" in terms of real estate prices and overall market conditions. The currents figures add to the credibility of those statements. For instance, prices for single family homes in the Bozeman area so far in the second quarter are pretty much where they were in the first quarter of this year. The same holds true for single family homes county wide; prices are way down from the boom days but haven't changed much in the last few weeks. What has been a noticeable change in single family homes is the drop off in activity in the small towns of Manhattan and Three Forks. There has only been 4 sales this entire year in Three Forks and none so far this quarter! Manhattan had some good momentum going in the first quarter that has come to a screaching halt here in the second.
Condos in Gallatin County continue to be an interesting story. Condo prices in Bozeman continue to drop; the average sale price so far this year is now $158,720. This is almost the exact same price for condos in 2003! The big question is will they continue to drop. Condo prices in Bozeman have gone down for 4 straight years. Distressed sales - foreclosures and short sales - continue to hammer away at these prices. When will the hammering stop? When the inventory of distressed properties is off the market. When will that be? I don't know, but you can call me and I can help you buy a few of them and speed up the process! :)
As for condos in Belgrade it is turning into a rout! The average price for a condo in Belgrade is now down to $74,098 on the year; the median is only $64,900! Contrast those numbers with a median price of $159,000 in 2007 & 2008 and you can see prices are off by more than half from the peak of the bubble.
Speaking of bubbles, the clean up from the real estate bubble continues nationwide. According the National Association of Realtors or NAR, existing home sales in April slowed ever so slightly compared to March, however the year to date adjusted annual rate is down over 12% from last year. The reason for this from NAR... well they give a couple. Frankly, I find their reasons embarassing. First they blame stingy banks, then they blame low appraisals, then if one reads between the lines (like I try to do) they blame the federal government. How's that you say? Well they make a big point of attributing the spike in sales last year at this time to the Feds home buyer tax credit. I can almost hear them lobbying for that tax credit to become permanent. But if you take the median price of a home in April of this year at $163,700 and you factor in a 5% drop in that price from last year you get a loss in value north of $8,000. There goes your $8,000 tax credit......
The other noteworthy figure from NAR is that in April distressed sales accounted for 37% of total sales. The number for April of 2010 was 33%. My take on all these numbers is this: we had a real estate bubble a few years ago and it created this mess we are in now. As a believer in free markets I would like to see the government and NAR allow some free market principles to filter back into the housing market . If they did we would get over this much quicker. I don't like seeing short sales and foreclosures any more than you do; it is sad to see people go through it and it's a paperwork nightmare for real estate agents. But in the end the market will win no matter how much the feds and NAR fight it. Let's let the correction take place - the quicker the better - and then we'll see a much healthier real estate market emerge. Send me an email and let me know what you think.