Montana Housing Reader
Here's a collection of news articles from the Billings Gazette in the past few years.
06/06/2005: Homeowners with zero-interest loans at risk if 'bubble' breaks
Highlights: A national view of interest-only loans. It also has local mentions, noting that most locally-owned banks hand out risky loans sparingly, if at all. But Wells Fargo in town does deal in exotic loans. The volume they deal with is not mentioned, but a manager says they mostly go to "investors."
Interestingly, I recently found the following graphic on an FDIC page. It says that 33% of Montana subprime loans in 2005 were interest-only or pay-option. So lots of people with bad credit are getting very bad loans. That's a lot of potentially toxic loans floating around! So much for the idea that only a small number of savvy investors are getting the risky loans.
06/21/2005: Billings' housing construction growth: Busy, but no bubble
Highlights: This article is interesting because it perfectly describes a housing boom, all the while denying that a boom even exists! There's also a Realtor adamantly stating that only other places have housing bubbles, not Billings. And finally, builders say that houses are snapped up as fast as they are framed. Clearly the market has turned in a big way since then. Right now there are dozens of spec homes that have been sitting around for months.
03/05/2006: Affordable housing strictly a relative term
Highlights: RE agent Howard Sumner talks about buying his first home back in the day, then gives the prudent advice of 30% gross income for PITI (Principal, Interest, Tax, Insurance). What Howard doesn't tell you is that, under his terms, it would take a salary of $60,000 to buy the median home (asking price $200,000) in Billings. Also of note, in the year 2000 48% of the homes for sale were under $100,000. Now only 10% of homes are in that range.
03/05/2006: Real estate career requires attention to detail
Highlights: An article about the Realtor boom. Billings has seen an increase of 38% in the last five years. Most of the story is about a high school guidance counselor-turned Realtor.
Letter to the Editor of the Billings Outpost
Highlights: This is a letter to the Editor of the Billings Outpost I wrote in June 2006
09/07/2006: Home prices rising, but slower than year ago
Highlights: This is the report on the latest House Price Index (HPI) figures, released for second quarter 2006. Contains a lot of Realtor optimism, but also a suggestion from Paul Polzin (of the University of Montana) that It's Not Different Here and that Montana is following national trends.
09/29/2006: Faculty turned off by housing costs
Highlights: Montana State University, in Bozeman, is having trouble hiring faculty. And no wonder, since the median house price in Bozeman is approaching $400,000. The university president says that a "perfect storm" is brewing. By the way.. Bozeman, with a population around 30,000, has over 900 single family homes for sale. Now that's massive inventory.
10/05/2006: Sheridan housing group sells 1st home
Highlights: This article gets to the crux of the problem. A family in nearby Sheridan, Wyoming, making a decent income, cannot afford even close to the median home. They have to rely on an affordable housing project. Next time you think huge home price gains are a good thing, think of this family
Hello Doug,
First of all, thank you for such excellent movies and the editorial piece.
Would you be willing to criticize a project that I'm working on?
I'm writing a business plan and found your blog while researching the issues.
Here's the abbreviated premise: (please point out faults)
I want to build micro- homes (less than 700 sq.ft-- actually, many of the plans are 400 sq ft- 3 bd. rm.) here in Billings. They will be green and sustainable. I have construction experience and happen to know that a $60,000 cottage- style home SHOULD be possible to build (even here) if it is clustered together with other similar homes to maximize efficiency and leave space for a natural areas and a “village lawn”. I have to convince the planning commission to adjust some of the codes, but some other cities have already done this. They are called Cottage Housing Development codes (CHD). Please visit www.cottagecompany.com to see grossly overpriced examples of what I propose.
What are your predictions about bringing micro- homes to Billings?
Do you think people who earn 50 to 120 % of the median household income will like these homes? Do you know of a good research source that will help me to determine this with some accuracy?
Do you think the market will be so over-saturated with mega homes that my micro homes will not sell?
Thank you for your important work and possible advice !
Cheers, phall100@mail.com
Background info:
My husband and I moved to Billings after we graduated from the University of Wyoming. We found the housing market unacceptable and resolved to build exactly the kind of homes that we would like to live in! Even though we have three children, we find our house way too big. We just don’t need it—it’s 52% of our income!!! It’s a pretty spec home near Skyview, but it’s not what we want—we want the financial freedom to do other things with our income—even if it’s giving it to charity, that’s better than giving it to developers for homes we don’t really like.
Hello Doug,
First of all, thank you for such excellent movies and the editorial piece.
Would you be willing to criticize a project that I'm working on?
I'm writing a business plan and found your blog while researching the issues.
Here's the abbreviated premise: (please point out faults)
I want to build micro- homes (less than 700 sq.ft-- actually, many of the plans are 400 sq ft- 3 bd. rm.) here in Billings. They will be green and sustainable. I have construction experience and happen to know that a $60,000 cottage- style home SHOULD be possible to build (even here) if it is clustered together with other similar homes to maximize efficiency and leave space for a natural areas and a “village lawn”. I have to convince the planning commission to adjust some of the codes, but some other cities have already done this. They are called Cottage Housing Development codes (CHD). Please visit www.cottagecompany.com to see grossly overpriced examples of what I propose.
What are your predictions about bringing micro- homes to Billings?
Do you think people who earn 50 to 120 % of the median household income will like these homes? Do you know of a good research source that will help me to determine this with some accuracy?
Do you think the market will be so over-saturated with mega homes that my micro homes will not sell?
Thank you for your important work and possible advice !
Cheers, phall100@mail.com
Background info:
My husband and I moved to Billings after we graduated from the University of Wyoming. We found the housing market unacceptable and resolved to build exactly the kind of homes that we would like to live in! Even though we have three children, we find our house way too big. We just don’t need it—it’s 52% of our income!!! It’s a pretty spec home near Skyview, but it’s not what we want—we want the financial freedom to do other things with our income—even if it’s giving it to charity, that’s better than giving it to developers for homes we don’t really like.