It's been a long summer with little activity on this page, so I'll kick the fall off with all the stats I could find showing how the Billings market is doing.

First up, we have the Supply and Demand graph. The bars show quarterly sales, and the lines show housing inventory for each year since 2006. Sales experienced a bounce in the third quarter of 2009, besting 2008 figures. This is undoubtedly the result of the $8,000 first-time homebuyer tax credit.

However, while sales were good, inventory of properties for sale continues to rise and dwarf the numbers from 2006, 2007, and 2008. Billings' inventory backlog is not going away anytime soon.

Below you'll find a closer look at monthly home sales in 2009 compared to 2008. Sales have definitely seen a bump thanks to the $8,000 credit, which was enacted in February.

Everyone wants to know: So what are prices doing? As usual, this one is difficult to answer due to Montana's non-disclosure of sale prices. However, we can take a look at the FHFA (formerly OFHEO) House Price Index to get an idea of where prices are headed. The HPI is finally starting to show a slide in Billings home prices. Unfortunately, these figures lag by about 6 months.

Now here's a positive sign: Houses are starting to become more affordable, if asking prices are any indication.

The graph below shows different price segments ($0-$100K, $100K-$200K, etc.) as a percent of total inventory. After reaching peak levels of unaffordability in 2008, asking prices have started down.

Note that the percent of houses asking under $200,000 went from 58% in 2005 to 40% in 2008-- a staggering drop in 3 years. However, as of now 46% of houses are under $200,000. We may yet return to having reasonably priced houses in Billings.

As I've predicted, foreclosures are beginning to rise as prices have fallen in Billings. Trustee's Sale notices in Yellowstone County rose sharply last quarter. This made it easily the worst quarter in the last 10 years. With unemployment rising and prices still falling, I expect this trend to continue.

Finally, let's look at construction. It's incredible that builders would still be building at a frenzied pace given the high inventory of existing homes, but they are in fact still building.

Residential building permits have surpassed 2008 levels in the past few months. This does represent a decline from 2007 levels, but there are a lot of houses still going up.

Just for reference, the graph below shows construction declines in the current downturn compared to what happened after the 80's market crash. Unfortunately, with the pile of inventory we're still building, it's quite possible that Billings will see an extended period of depressed construction activity.

And that's the wrap-up. I would say that home sales are the only real sign of life in the Billings housing market, and those have been artificially propped up by the First Time Homebuyer tax credit. This could be a long winter for Billings real estate. I'll keep you posted.