My housing videos give you an informative, entertaining look at the Billings housing market. They are the main feature of this page. Click on the image to check them out.
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- Doug
Since 2006, this page has been giving information, facts, stats, history, and opinions about the Billings, Montana housing market. This is also the home of the Housing Boom in Billings video series.
Comments and questions are welcome! You can contact Doug at this address:
Every year or two, I produce a documentary-style video taking a look at various aspects of the Billings housing market. Click the image below to go the Videos page:
Nothing on this page should be considered investment or professional advice. All attempts are made to present accurate information, however, mistakes can occur. Please let me know if you see any inaccurate or misleading informations.
Doug,
I have really enjoyed your material- great unbiased insight and you've taught me a lot. I am moving to Billings this spring/ summer and am considering buying a house... but unsure with the shakey market. I was wondering what your take is on the west end subdivisions such as ironwood/ falcon ridge/ yellowstone etc.. are they still building there?
Hi Smokes,
I don't give specific recommendations on buying or seling, but here are some general guidelines.
At this point in time, I think a person's decision to buy or wait should hinge on three factors:
1. Their ability to afford the house and make payments.
2. Their sensitivity to falling prices.
3. Their time frame.
(1) is pretty straightforward if you know your finances (also see this post.)
As for (2), nobody knows exactly what home prices will do in the next year, but we can work in probabilities. Based on the available evidence, I believe there's a decent chance that home prices will decline-- probably significantly-- in the next few years. If the thought of a 20%+ decline ($80,000 on a $400,000 house) disturbs you, you may want to rethink.
And that relates closely to (3). If you plan to be here 10+ years and don't expect a house to make you rich, that's a good place to be.
Finally, assuming you'll be working here, think hard about the ability of your job and your high salary to survive the recession that seems to be on its way. Having a lower/no salary and being underwater on a house is pretty much worst-case financial scenario.
As always, these are my opinions and I do tend to be pretty conservative! Thanks.
As for the specific subdivisions:
If you want a nice, expensive house on a big lot surrounded by lots of other expensive houses, it's hard to beat Ironwood. It's the farthest-out sub within the city limits, and the largest of the high-end subdivisions. Surroundings are dry, brushy, and treeless, but pretty in a stark kind of way. Ironwood seems to be a love-it-or-hate-it kind of place. There's a 3500 sf house whose asking price is already down $47k since March.. now going to Dutch Auction starting at $351k! Watch for a post about it.
Falcon Ridge is the least developed of the west-end subs. If construction slows down enough, this could mean that you'll have empty lots around for awhile. I count nine different houses for sale, out of maybe 20-30. It's close to Augusta Ranch and Ironwood, but less expensive than either of those. Nothing really special here.
I like Yellowstone Ridge for some reason. It's right up against the rims (and yes, those rocks can fall!) with good views of the valley. It's newer, but is mostly filled in and doesn't have the "under construction" look at all. I was there yesterday and didn't see a single house under construction. It's small, and selection is limited.. only houses for sale are here and here. No spec homes.
A potential downside to all of the new subdivisions is that they're way out of town. 20-30 minutes for a commute is nothing compared to most cities, but still something to consider. There are nice neighborhoods within a mile of downtown if you're more inclined to biking, walking, or short drives. Also consider resale value and think about if tastes could shift over the coming years..
As always, you need to see each of these yourself if you haven't already. Thanks for reading, and let us know if you make a move!
Smokes- Doug won't give a recommendation, but I will. :-)
Why not rent for a year? You'll get a better feel for the city, have plenty of time to check out the various areas, and I'll eat my hat if prices aren't lower next summer then they are this summer. Sure, moving twice is a pain in the behind, but I bet the cost of a full service move will be paid for by the lower price of the house you're moving into.
Hey thanks a lot Doug and Anon#1.
A lot to consider.
I've heard there are a lot of people renovating homes downtown- Are the downtown homes holding their value?
Smokes, I've been following downtown housing, as that's where I'm planning to buy eventually, and I don't think it is holding value. Here's an example:
http://www.realtor.com/search/listingdetail.aspx?sby=6&lid=1099432509&sid=
That place was bought back in November of last year by a retired Californian for $221,000. As of today she's asking $214k and the place has been on the market for about six months. For what it's worth Zillow thinks the house is worth only $186k now.
I've been in the house and it's very nice, if a little oddly laid-out (upstairs bathroom only accessible via a bedroom). It's just not worth what it once was.
It seems like Billings housing market is just starting to take a downturn as the locals that were positive about Billings economy being recession proof are few and far between now. I wish I had a crystal ball and could see how low this housing market will go...
Any fresh predictions out there?
Thanks for the feed, now I won't have to come over and hit refresh all the time. :-)
@Anon#1
How do you know the purchase price of http://www.realtor.com/realestateandhomes-detail/128-Lewis_Billings_MT_59101_1099432509
was 221k. is there a place the the public can go to get price information like that?? i would be interested in seeing other prices as i am a first timer looking to buy and want to see if i am paying an over inflated price
Hey previous Anonymous, that house is a special case, the Gazette did an article on it (among other things) and the owner said how much she paid.
Since MT is a non-disclosure state (call your state reps!) it's impossible to find out how much houses sold for. However, there are still tools that can help you.
The best one is to find out how large a mortgage was taken out on the house- that's public information. You won't know the down payment, but it will tell you how low the owner can go without needing to bring cash to the table. Even if it was last sold a while ago the owners may have done a cash-out refi recently.
To get this info you can either go down to the Country Clerk and Recorder's office in person or pay $75 for a year's online access to the documents at https://secure.co.yellowstone.mt.gov/clerk/secure_search.asp (the free search won't let you read the documents.) Since I live outside of the county I pay for the online search, it's pretty nifty.
You can also use the tax-assessment value of the property. There were new assessments done not long ago, and I assume they will show up online soon. You can see the tax data at http://gis.mt.gov/
Finally there's Zillow, which is useful but should be taken with a large grain of salt. I don't know how Zillow is coming up with its numbers, but they are not real accurate- I've seen several houses recently that are listing for less then their Zillow value, sometime much less. Zillow can give you a general ball-park idea though.
PS- I'd hold off on that new purchase for a while if you can. Even if you are eligible for the first-time home buyer's tax credit you have until the end of the year to buy, and I bet this fall prices will be lower then they are right now.
I feel special- I'm the doubting Thomas named in the below article. :-) I should have been more specific about which claim I wanted her to ask about, but them's the breaks. Also, Howard's stock market quote conveniently ignores dividends- the stock market since '68 handily beats the return on a house in Billings, even with the recent -50% crash.
http://www.bigskybusiness.com/index.php?option=com_content&view=article&id=257:billings-housing-market-update&catid=29:montanabusiness&Itemid=29
For those following the plight of 128 Lewis, the house mentioned above a few times, they just hacked the price to $199,000 after sitting at $214,000 for months and months and months. Even before Realtor fees this one is going to be a loss for the homeowner.
Doug or Anon 1
Do you have a link for the online Missoula "Green Sheets" where I can get Missoula Mortgage info?
I'm in Missoula. Nothing is selling yet many folks are not discounting enough to hit reality. Love your site and wish you would set one up for Missoula.
There was an interesting article in USA Today on May 18th, entitled
"Housing Market in Billings Montana Feels The Recession". Read it at http://www.usatoday.com/money/economy/housing/closetohome/2009-05-18-close-to-home-billings-montana_N.htm. The recession is starting to show in the housing and jobs numbers for Billings and the rest of Montana, which had previously been thought of, nationally at least, as recession-proof. I've been out of the area for awhile and don't know if this article was seen locally so I wanted to post it.
Thanks for all the great info. I'm moving to Billings this summer, and this is very helpful.
One question -- I'm noticing on zillow.com that the asking prices for many houses in Billings seem to be wildly out of step with the assessed values. Look at the aforementioned 128 Lewis, its assessed value is listed as $104,200, while its asking price is $199K.
What gives? Any insights would be appreciated.
Hey Scott, Zillow say 128 Lewis is worth $187,00, maybe you saw the wrong listing?
But in general you're right, Zillow listings are only rough guides. I'm not sure where they get their numbers, I posted a question once in the Zillow forum about it but never got an answer, I suppose it is a trade secret issue. In the rankings that Zillow produces for its own data accuracy Billings gets two stars out of four (I think...) and says the median error is 13%, with only 19% of the Zestimates within 5% of the actual sales price.
I will say that having a listing price less then the Zillow estimate does seem to be a decent indication of a possible deal, but not always.
Thanks for that article Anon, always interesting to see national news on Billings.
This post has been removed by the author.
Hey Anon #1, actually I was looking at a different number than the Zestimate. If you to the "Zestimate and charts" tab, there's a "sales history and tax information" box where you can see the values assessed for property tax purposes (type in the four-digit security code shown to see those).
I did mess up and look at the wrong tax column. ;) But still, last year, total assessed value for 128 Lewis was $123,300 according to Zillow, compared to the $199K asking price.
Similar situation with the much-discussed 640 Wyoming Ave. Asking price is $159,900, assessed value for 2008 is reported as $92,700.
What do you think, are Zillow's tax numbers just unreliable? Tax assessment values aren't up yet on http://gis.mt.gov/ to check against...
I'm 99.9% sure those tax assessment numbers are from the last assessment back in '03, or when ever it was. The new tax assessment numbers have not been made public yet, so I don't think Zillow has them.
Scot-- welcome to Billings. Anon#1 is right, those tax numbers are based on 2002 or 2003 assessed values. Interestingly, I find the total taxes paid (times 100) to be a good rough estimate of house value. For example, if taxes are $1,400 a year, you're looking at a roughly $140,000 house.
Am I the only one that gets gobblydegook when I try the RSS feed? It used to work but doesn't work for me now.
I just tried the feed, and it seemed to work for me. Anyone else?
I use google reader, and it's a-ok.
A possibly final update on 128 Lewis, it's gone from Realtor.com, but not before its price was cut to $189,000. At 3,000 sq ft that's only $63/sq ft. Might make a great comp if you're trying to lowball a house in the downtown area...
The RSS feed is still not working for me. Could be related to recent install of Vista Service Pack 2. Have had some other weird stuff going on too.
Picked up a flyer for a house today and saw that it was a short, sale, the first one of those I've seen in Billings (not that I've been looking for them). 1023 N 31st, but it's no deal, they're asking $186k for only 1689 sq ft. I tried to look up the amount of the mortgage but the Yellowstone county document website is acting up the moment.
I'll be surprised if this doesn't go foreclosure given the lousy asking price.
1023 North 31st is only ~650 square feet each on two floors, plus an unfinished basement. $186,000? Yeah, right!
I got a chance to look through the county docs and this, and wow what a history! Check out the progressive refinancing on this one:
4/2000: $86k
2/2002: $91k
4/2004: $89k
1/2006: $140k
4/2007: $179k
All through the same owner. If they would have stuck with that nice 30-year they got in 2000, it would be an easy sell today with a nice payoff. Too bad.
What a mess we made with our housing-crazy, refi-crazy ways.
But Doug, I though home equity was for vacations and boats! It's free money, right? :-) Thanks for digging up the numbers.
Ever the optimist, I love how an almost 50% price drop is referred to as "stagnant".
Auction reveals stagnant market for upscale homes
I nominate this listing for the "best wishful thinking" award.
$389,000
I've not seen a listing so far removed from reality in a long time...
The loan on that house as of July '09 is $318,000. When they bought it in '07 they took out a loan for $110,000. I'd have to work pretty hard to spend $200,000 on a remodel. And why the heck would you dump all that money into it and then turn around and leave?
Zillow thinks the place is worth about $220,000.
I've been surprised by the number of people asserting that "Billings didn't have a housing bubble." So I've looked up some stats that I think demonstrate otherwise.
Here's how the median income in Billings has changed recently, according to the U.S. Census Bureau:
Billings median income
2000: $35,147
2007: $42,875
Change: +22%
Now here's the inflation rate for that same period for comparison (measured by the national cost of living index, CPI-U):
Inflation index
2000: 172.2
2007: 207.3
Change: +20.4%
Looks like the average Billings household's income increased at a rate similar to the rate of inflation.
Historically, over long periods of time, house prices nationwide likewise have tended to closely track inflation.
However, Billings house prices this decade definitely have not. Here's the median Billings house value, according to the U.S. Census Bureau:
Billings median home value
2000: $99,900
2007: $150,100
Change: +50.3%
Billings home values rose at more than double the rate of inflation, and at more than double the rate of Billings incomes.
Don't believe the Census Bureau? Let's try the average sales price listed by the Billings Chamber of Commerce's welcome packet instead. (True, sales price and home value are not the same thing, but it still helps us get a picture of how the local housing market has changed.)
The C of C doesn't list a 2000 median house price in their Billings welcome packet, but they do list 2001 to 2007, so I'll look at that time frame now instead.
Billings median sales price
2001: $112,525
2007: $182,110
Change: +61.8%
Now here's the inflation rate for 2001-2007 for comparison (measured by the national cost of living index, CPI-U):
Inflation index
2001: 177.1
2007: 207.3
Change: +17.1%
House prices look even more overinflated by that measure, rising at more than triple the rate of inflation (and probably more than triple the rate of Billings incomes) during the period.
Unless Billings houses were drastically undervalued in 2000-2001, a major price correction seems to be in order.
Right on, Scot. The simple fact is that house prices increased much faster than wages did. Prices are overvalued and must come down at some point.
Another way to measure price change, the HUD Housing Price Index, which uses a "same house" methodology so that changes to the types of houses selling (high end vs low end) doesn't effect the index.
Q1 2000: 118.38
Q4 2007: 200.33
+69.2%
Q2 2009, the most recent number, is 203.99, just a bit below the peak.
There was an article in the Gazette today asking if we are in for a rental market bust, or at least softening.
New apartment developments are filling up fast, but some wonder if rental market is getting saturated
Thanks Anon #1, I hadn't seen the HUD (FHFA) HPI data, that's really useful stuff!
I've noticed too that rents seemed to be falling. I'm guessing you're thinking what I'm thinking: this should put further downward pressure on house prices, because when rents fall, that makes buying a less attractive option by comparison.