March 2008 Update
As you may have noticed, this has not been the place for recent housing updates! However, I have been keeping up somewhat with the market, so let me compress many months of housing news into some key points.
- Nationwide, things are getting ugly. UGLY. See the above graph. OFHEO and Case-Schiller housing indices are showing the beginnings of huge drops in the national index. In California and Florida, look out below.
- As the lending crackdown, Montana Board of Investments SIV losses, and local housing related layoffs have shows, Montana is not isolated from the national scene. You may hear experts say that we can escape the brunt of a nationwide recession; I doubt it.
- In the latest OFHEO House Price Index, Montana is #4 in price appreciation (7% in one year). This is not particularly high figure, but all the other states have dropped off so much that Montana is now a top state for home price appreciation.
- Let's talk local. The Billings market surprised me by continuing to rise after a brief pause in late 2006. In 2007, the market has posted modest, but not spectacular, gains. There is no major crack in the market yet. A major downturn would be preceded by falling home sales.
- I have refrained from making predictions about when exactly a downturn might start. It is very hard to call the top. I only know that as long as local wages do not support local house prices, a fall is on the way.
- 2007 foreclosures in Yellowstone County were the highest since before 1996 (the earliest year that on-line records are available). However, the number is still not that large. February
2008 showed a huge uptick, but we'll see if it was just a blip. - Bloggers like me are accused of being overly negative. So let me make it clear: I am an optimist in everything else in life. However, I know an unsustainable asset bubble when I see it. This one has alarmed me ever since 2005. When the media ignores it or cheerleads it, I feel compelled to offer an alternate viewpoint.
- I do not relish the thought of a rapidly declining market in Billings, because I know it will cause a lot of pain all around. However, I know that when a market gets way out of control, it has to come back in line at some point. I would rather see that happen sooner rather than later. Let's suck it up, rip the band-aid off quickly, and deal with the economic trouble before it has the potential to be
even worse.
There are a number of interesting housing stories that I look forward to reporting on; Tentative date for my next video is sometime this summer. I know this has been a long break, but thanks for your patience.
In the mean time, I would highly recommend:
Missoulapolis
which is a conservative political blog that has been talking a lot about Montana housing lately. The author, like me, is very skeptical of what she reads in the newspapers, and takes it upon herself to offer commentary on the latest housing reports.
Hey thanks, I need to look in my stats more often.
I haven't been looky-looing much lately and am just waiting for the spring open house fallout. I'm seeing a lot of the same spec houses for sale, month after month, still too much for incomes. Too many places in the 300s, on tiny lots - why go into hock that much for a what, 6000 sf lot? When I go to open houses usually I found out it's a realtor who's holding the bag.
Remember, median price is a lagging indicator!
I have been reading your comments on the Missoulapolis Blog and I find it interesting that it is very difficult to find out how much a house has sold for in the Billings area. I have been following the housing market in he area for over 12 months now (will be moving to the area soon).
I have noticed that a lot of the houses on the market are getting recycled (either taking them off the market and putting them back on, or just changing the MLS numbers). It gives the illusion that there is more movement in the market.
I have been keeping a database of several homes (30+) in the area and I found it interesting that several homes, by the same builder, would drop off the listings on the same day. These homes were on the market for several months and worth 450K-500K. I have tried to find out how much they were actually sold for,however, I can't get the information. I was able to contact the county recorder, and they informed me that the title has not changed hands (i.e. it is still owned by the builder). When I go the builders web site the houses are listed as sold. My real estate agent tells me that the sales are pending. This whole story may very well be true, however, I noticed that other houses that were in similar status (PENDING), were re-listed several weeks to months later.
It makes me very apprehensive about trying to buy a house and not get nailed on an artificially high price. Really hope to see that next video before I have to commit to a house.
Its so nice to ACTUALLY read some facts! Thank you. I am so tired of realtors and the Billings Gazette stating over and over that Billings is immune to a recession or to a housing crises. I too see the same houses over and over again and I laugh at the price tags. I guess I will stay in my small, yet paid for, house and watch those big spenders lose it all.