Billings, MT

MARKET UP DATE AT GLANCE THRU FEBRUARY 2009

FEBRUARY saw a significant increase in buyers in the market. THOSE buyers coming into the market (APPARENTLY first time buyers) were responding to their best self INTEREST historically low rates and the first time buyer tax credit, which is refundable on your 2008 taxes if you close before you file.

the most active SEGMENT of the market was between 160k to 180k, that price range saw it's share of the market place jump from 13% by unit volume in 2008 to 17% by unit VOLUME in 2009. thus the comments above.

the question that will unfold over the next couple of months is, did buyers that would have been in the market later in the year purchase earlier, due to the tax credit. IF that proves to be the case we will see a SOFTENING of the pending sales compared to 2008 as we come into spring.

inventory levels have moderated TO 25% PLUS from a year ago, THE decrease from a month ago is AFFECTED by the increase in pending SALES, so again the comment about stealing buyers from later also applies to the INVENTORY numbers.

CONSTRUCTION numbers IMPROVED in FEBRUARY, single family permits, yet still show a very SIGNIFICANT decline FROM LAST year. to put it in PERSPECTIVE the first 2 months of the year are as follows 1. 2009 17 single family permits, 2. 2008 41 single family permits, 3. 2007 54 single family permits. the new CONSTRUCTION market will struggle this year BECAUSE OF constrained funding and the DIFFICULTY of COMPETING against EXISTING homes that are priced SIGNIFICANTLY lesS THAN CONSTRUCTION cost would be to build a SIMILAR home. as i have stated previously the slowing in home construction is a POSITIVE in the overall market place because it reduces overall inventory, yet THAT DECREASE in new CONSTRUCTION sales also has an impact on sales price and size of homes that go iNTO the mix of sales.

the home sales prices below SHOW a slight price decline year to year YELLOWSTONE county has seen about a 2% to 3% decline in closed price. the actually sales price number is affected by the slow down in THE above 250k range and the SIGNIFICANT INCREASE in sales in the 160 to 180k range mentioned above.

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the two POSITIVE forces in the MARKET are the STRENGTH of the below $200,000 and no significant increase in FORECLOSURES of HOMES.

THE $200,000 and below STRENGTH is CAUSED, I BELIEVE, FOR two primary reasons #1 unemployment in YELLOWSTONE IS SUB 3.5% COMPARED to the state average of 5% and the NATIONAL of 8.1% giving people who want to own their home a job and A BELIEF that they will be employed, along with HISTORICALLY low INTEREST, approximately 5.25% on a 30 year fixed rate, and you have a good case for buying a home if your intention is staying put three plus years.

THE #2 POSITIVE IS NO SIGNIFICANT FORECLOSURE activity. the importance of this fact can not be UNDERSTATED. when you look at other market places AND THE case /shiller index declines, the driving force is FORECLOSED properties sold by lenders.

the #3 positive is the $8,000 refundable tax credit for first time home buyers

IF YOU NEED AN ADDITIONAL L INFORMATION PLEASE CALL OR E-MAIL

Roads like the ones we were driving on this morning make me cringe! Even though most people were driving very slow and with great caution, accidents still happen! There was some poor person who toppled over a light pole by the Metra (can't say Rimrock Auto Whatever yet). When we have this type of weather we then start a slippery road policy which means, don't call the cops unless you can't move your car or there is an injury.

On days like these, even though I think my car does not need replaced, I can see the dollar signs slipping on down the road and crashing. Sounds like repair and shopping to me.

The auto industry in Billings Montana could probably use a little stimulus, I just hope no one gets hurt!

I know what you thought, and you are partly correct, but BS stands for Blarney Stone in this case! I'm not sure if I developed the gift of gab prior to kissing this blessed stone or if kissing the stone some how justifies my going on and on and on! I'm also really good at recognizing BS! I can look a person in the eye and tell right away if there are fairies dancing inside or not! This is a very helpful tool to use in Real Estate, let me tell you.

I did live in Londonderry Northern Ireland for a couple of years, during "the troubles". Went to an all girls private protestant school, Londonderry High School. Brown shoes outside, black shoes inside, uniform and the whole shibang. I didn't think wearing a uniform was bad at all, never had to think up what to wear the next day!

In a perfect world, if I wanted to move to a new home, I would

• Find one
  
• Make an offer that is accepted
• Put my home on the market
• Sell my home in the first week
• Close on the home I am selling and the home I am buying on the same day
• Move from my old home to my new home over the long weekend
• Wa La, what could be easier?

Well, it could work like that! And I have participated in a number of these types of closings. But this situation takes a lot of care, diligence and crossed fingers.

Here are some helpful tips on how to make a transaction like this work, and work well:

1. First get pre-approved for a mortgage for the home price you plan to spend on the new home. Use your local lender either from your Bank or Mortgage Broker and find out what types of loans are available for your particular needs and situation. Remember to get an idea of closing costs and terms that are involved so that you can factor in all of the costs to purchase.
2. Get your home in top notch condition to present to the market. Your opinion of top notch condition is very important, but the buyer's opinion of top notch condition is what counts. Your Realtor can help you evaluate your homes condition. A pre-listing home inspection can help you identify and fix any needed repairs prior to presenting your home to the market.
3. Find out what the best pricing position is for your home in the current market. Take into account that having a home that is priced right will bring you the most money in the shortest period of time. Underpricing works even faster! If you overprice a home, it won't sell, and you won't be able to move.
4. Start shopping for your new home. Seek and find the home that fits your needs the best: location, price, size, style.
   
5. Have your buyer's agent, (who will most likely be the seller's agent for the home you need to sell) prepare an offer on the home. Your marketplace will determine what kind of price your offer should be, your agent will help you with this. Ask for a closing date that is far enough away to make the sale of your home completed in about a 45 to 60 day period. Insert a contingency for sale of your property into the offer. Give the seller's agent information that will help them understand that you are prepared to go on the market the day after this offer is accepted (because you've done steps 1-3). Be prepared to agree to a first right of refusal condition.
6. In your offer I recommend that you complete your loan application and home inspection within 2 weeks of offer acceptance. Work on the contingencies for your home purchase in a timely manner so that you show good faith to the seller, allow time for inspection issues to be negotiated, and you become ready to complete the transaction with most contingencies removed.
7. Put your home on the market within a day or two of your accepted purchase offer. Make your home easy to show and sell by having it placed on the local MLS, use a lockbox, get any pets out of the picture for showings. Your Realtor can help you with the best procedures for showings.
8. If you priced your home for the current market, and your home is in top notch condition, you should have showings by Realtors who work with lots of buyers in the first week to 10 days. You should receive an offer that is acceptable within the first 2 weeks, maybe as long as 30 days. If you haven't received an offer by then, review the price and condition with your Realtor. If you do not have an offer in this time period, you may need to renegotiate your purchase offer on your new home for an extension of the dates. Many a deal is done if both parties are willing to work towards completion. The seller of the home you are going to has probably left their home on the market with a first right of refusal notice in place. If your home is not moving, they may not negotiate an extension if they want to make their home available to more potential buyers. If they like your price, and they feel you will follow through with the sale, they may just hang on with you. Remember, they want to move on as well. On occasion we do have a domino contingency sale where 3 homes sell on the same day and everyone must have nerves of steel to see this process through. These are the type of deals that keep a lot of people up at night!
   
9. If you work through all of the contingencies, for all parties involved, everyone gets to move!
   

I think that preparation is the key to this process. There are other ways to change homes that are less stressful in some ways. Often they involve staying with relatives after the home you are selling closes or moving to a rental. Then you can shop without needing to worry about a contingency of home sale.

I know this is lengthy, and I have probably left out a few things, but I hope it gives you an idea of how this can and does work all of the time.

Just heard another horror story of a refrigerator water connection that sprung a leak and flooded most of a home when the owners were away for a couple of days. When I hear this I conjure up the image of water leaking from a main level fridge, down through a heat vent and onto a big office computer desk, with the computer on the desk.

No wonder a lot of builders will not hook these babies up around here. The appliance delivery people, who are not paid gobs of money, follow the procedure they are given and connect these water lines for the property owners. The responsibility is huge! The connections for the water pipe/tubing can fail as well as the tubing itself (often when the homeowner pushes the fridge back against a wall and runs over the tubing).

Is there a cure for this problem? Is there a 100% fail safe procedure? If so, I need to recommend this to my clients. I sound like an alarmist when I tell people to check their connections every now and then, especially when they move to clean, but your heart could be broken if you have a flood.