Anonymous

Great stuff Doug, thanks for the video.

 Anonymous

Great video on new homes. Do you have anything on the existing housing market?

 Doug

Thanks, glad you liked it.

As shown in the video graph, city-data.com stats show home sales down 43% year over year. That includes new and existing sales. So while I didn't highlight a whole lot of "used" homes, the trend isn't looking good.

I'm hearing anecdotes of big price reductions and "insulting" lowballs weakly countered.

 Todd in Helena

Excellent!

Nearly all your observations seem to true for the Helena area market, too.

Construction is way down, listings are way up and sales are way down. Yet the median home prices are being reported in the 270's while the national median price is in the low 210's. Quite a disconnect.

How do you get your numbers? Here in Helena I have to rely on what the local chamber of commerce publishes, as the Helena Independent Record assiduously avoids reporting on housing except to public puff pieces quoting local agents and builders. And the chamber has begun to publish fewer stats lately (hmm?). Of course, the realty companies and builders are completely mum about it except when they can spin it in their favor.

Great job.

 Anonymous

Thanks for the video Doug.  Very well researched.  There are lots of opinions about Billings Real-Estate from biased sources.  It's refreshing to see some objective numbers.

 Anon#1

Todd- I can't speak for Doug, but there's some Billings data available at http://www.marcdean.com/educate_yourself.htm (it only shows the current month, but many other months are available if you modify the data url in predictable ways).

As the market gets uglier I imagine it's only a matter of time until this guy is shut down, unfortunately.

 Doug

Todd-- I gather inventory numbers myself from Realtor.com. Monthly sales are so hard to find! I've finally found figures on city-data.com. I don't know where they get their data sets, but I like them! Try this link: Helena stats. Looks like sales off 34% YOY in Helena. Interesting market, I wish I had more time to check it out. Got any condo projects out of control there?

Thanks for the link, anon#1! Those Prudential sheets are very nice, but I've never seen them on the web before.

 Anonymous

I live in Vancouver. Watching your video reminded me how alike our situation is.

We have the overbuilt condos downtown. We have the unnecessary condos in the outer cowtowns. We have the surplus of overpriced recreational property. We have the aggressive out-of-province buyers. We have the smug overconfident real estate industry telling us we're special. And we have the slow subsidence as the cycle gradually turns down, keeping hope alive.

Thank you Doug for all you do. I especially like the segment on the lenders in your area. It really told the story how the Billings situation multiplied by millions of examples nationwide explains why the banking system is dead in the water.

Peter

 Todd in Helena

Doug,

Here in Helena there is not so much in the way of massive condo development.

Currently 104 units for sale in the area, mostly in 4-plex style developments or converted apartments. About half are new construction. There are also the "Placer" and "Old Distillery Lofts" developments rehabbing old buildings in the downtown core.

But there is also a new "condo" development that just went in up on the side of Mt. Helena called "Westridge Heights". Part of it is set aside for 2-plex condo townhomes, but the majority of it is being marketed as building sites for single family home condos. These sites are running in the $150K range! Local builder and contractor is behind it.

 Anonymous

Great work! Thanks Doug!

Actually I am surprised that the overall market in Billing has not dropped much, at least yet. Here in San Diego, we already see 50% drop in undesirable areas, like long commute area, high crime area.

 Big Steve

Very good job. You're quite a talented video maker. Billings is somewhere we're looking at for a move in a few years.

 Senior Managing Rubbernecker

Great job! Keep up the good work!

 Anonymous

Hey Doug,

Great mini-Documentary. What camera did you use to get such good broadcast quality footage? I would like to do something like this in my neck of the wood, Inland Empire California.

 doug

5:50 p.m. anonymous-- I shot all my video (640x480x30fps) and most photos on a Fujifilm camera that can be had for <$100. Glad you thought it was "broadcast quality"!

 Anonymous

I've noticed an increasing number of "sale by trustee" foreclosure notices in the legal notices section of the Billings Gazette. Often times covering more than one page of the classifieds.

 Doug

You're right, anonymous, things have been picking up. October was the highest month for Trustee's Sale notices in more than 5 years.

I'm working on some more detailed analysis of foreclosure data.. might have it up this weekend. Watch this page.

 Anonymous

Very nicely done.

I'm impressed with the collection of stats and you're interest in getting at the truth above anything else.

Looking forward to the next one Doug!

 Thumper

Excellent work Doug, thanks for all your hard work! Your piece helped us make some sense of the market in Montana.

My wife and I have visited Gallatin County many times over the past 25 years and although it is a bit outside your area we would like your take on it's market condition [the northwestern corner, not the Big Sky area]. We have been thinking of settling there for the past 15 or so years but the astronomical run up in real estate has us really concerned.

We have talked with several Gallatin buyer's agents and feel we are just not getting the whole story. With Montana being non-disclosure and all how does one determine what a fair offer really is? Compaired with our area in the Mid-Atlantic region [full disclosure BTW] the Bozeman economics seem totally upside down. Here our median household income is almost TWICE that of Gallatin county and the cost of construction (per sq ft) is also higher. Yet our property prices have plunged 35% or more. It's crazy to the point where a $300K home here is THOUGHT to be worth $600K+ in Bozeman. According to the brokers, Bozeman's market is seemingly totally immune to the economic downturn, but we don't "buy" it. Sales of existing Gallatin homes are very low, with very high inventory, yet sellers seem stuck in their heads at boom level pricing, totally unwilling to budge. I also wonder how much of this is the Agent's trying to prop-up the market? We heard of instances of Agent's using there own "comps" on unknowing outsiders to justify insane pricing.

We wonder if sellers in Gallatin County will eventually come back down to earth with the rest of us or will they stubbornly wait for years, if needed, to get their price?

 Doug

Hi Thumper, thanks for watching and I'm glad you got something out of this.

I'm not in and around the Bozeman market like I am the Billings market, but I'll let you know what I can. First of all, be very careful about which RE agent you go with. Anyone who claims the market there is "good" or even "ok" is either ignorant, or a liar-- to put it bluntly! And neither should be your agent. Even the RE-cheerleading newspaper is starting to acknowledge the trouble.. see here and here.

According to that first link, things are definitely "budging".. land prices 50% off asking! And still a 10-year supply, so there's more pain to come. Of course sellers are going to stick to their wishing prices as long as they can, but eventually they come to a point where it's either unload or get foreclosed on. For many people, that point is rapidly approaching, and this will drive the prices down.

If you've got the time, I'd say wait 3-4 years and take another look. You don't have to worry about missing the bottom. On the other hand, if you want to buy now and are comfortable with the risk of a big downside, get a good buyer's agent who will give it to you straight and allow you to drive the best bargain to minimize your losses.

Only the Realtors have access to the MLS. Make yours earn their commission by letting you know comp sales prices vs. original (and I mean the very first) asking prices. Find out how much prices are going off asking.

Be cautious, though, because my opinion is that Gallatin County RE will be a disaster in the next few years. Quite possibly a crash rivaled only by the Bitterroot and Flathead. As you state, the economics just haven't made sense.