The Bust is Here
How many months and years have we been hearing that Montana can "weather the storm" and that all the subprime housing troubles were "contained"? Too many, but anyone who's been observant of the local housing run-up and mindful of history knew that it was just a matter of time before trouble struck here.
Finally, this week, in January 2009, the Bureau of Business and Economic Research confirms it: Montana is not different. We're in a recession, and it's going to be long and difficult. Article here: Montana economy suddenly reflects global recession
So what does that really mean for housing? Let's look at the Bitterroot Valley. Relatively small population, but some big speculation in the last few years. Missoulian got around to reporting that the Bust in the Bitterroot is finally underway. And as commenter "kasey" insightfully notes:
Since we live in a non-disclosure state, sales prices are not public info. This makes it possible for realtors to keep a lid on the bad news. That's why the realtors knew the bottom was falling out in the Bitterroot as early as 2006, but the Missoulian just found out in 2009. Meanwhile, the Missoulian has been printing the realtors' press releases about how God isn't making new land and Montana is different.
Of course, readers of this blog with good memories will note that my June 2008 post tells how we could forsee the imminent downturn in the Bitterroot based on increased months' supply figures.
Interesting enough, but that's a whole different market clear across the state. Hey, wait a minute. Speaking of months' supply, Wayne Nelson of Stockman Bank in the Heights had something interesting to say in the Gazette this past weekend:
Billings has about a 10-month supply of unsold homes, according Nelson at Stockman Bank, up from the normal three months supply. And prices have softened, especially for higher-end property.
Uh-oh. Large inventory, low sales. Something is imminent, and I don't think it's a recovery.
My videos are titled "Housing Boom in Billings", since they have tracked the peak of explosive housing growth in Yellowstone County these last few years. Now I will say that the party really is over. The bust is here. The only questions from here are, How deep? and How long? Make no mistake about it, the bust is here.
Thanks for the valuable info. Can't seem to get any news from the press. The silence is interesting. Lots of stories when the good times were rolling - but none when their real estate advertisers are trying to sell overpriced homes to non-existant customers.
Using the few facts I can glean from the Chamber of Commerce newsletter, in the Helena area through Nov 08, 632 houses, condos or townhomes were sold, as opposed to 1165 in 2007, 1187 in 2006 and 1193 in 2005. That means sales in 2008 were off 46%, 47% and 47% as compared to Nov 2007, 2006 and 2005 (respectively).
No where is this even mentioned in the local rag, the Independent Record. Unfortunately, I can't discover the inventory numbers.
Thought you might like to know.
You're welcome, Terry, and thanks, Todd. Very interesting. Unfortunately, it's almost impossible to get an idea of house price movement in most of Montana unless the Realtors decide to give up some stats and the media decide to cover it. Makes the system ripe for abuse, as we saw in the last 3 years.