Brint Wahlberg

Last Thursday - Friday was the 3rd annual New West: Real Estate Development in the North West. The event featured a Thursday schedule that was based around a lot of political issues, land-use, and marketing trends. Friday was a lot more economic talk, there was some discussion with developers, and discussion about stream-side set backs.

Here's my quick thoughts from the 2-day event, also I've posted New West's official release below.

On Thursday:

- The first few sessions were broken apart into three different topics, in the morning "track" I went with marketing innovations, in the afternoon "track" I went with land-use laws. Both were decent, not entirely ground-breaking. The marketing discussion lacked a lot of new ideas, mainly just a bunch of marketing firms telling the class that they should spend a bunch more in the paper and add in other marketing schemes that worked well in the 90's. Not much talk about using Facebook or Twitter to market/promote, or using innovative new sites. The land use thing was basically a refresher on how playing nice when doing a development helps.

- The last session was pretty interesting, a politicial discussion with a NY Times Op-Ed writer, a reporter out of Helena, a reporter from Idaho and a reporter from Wyoming. The discussion centered more around local/state elections rather than the national election, here's a few quick points I gathered:

• Bryan Schweitzer has become a ground-breaking democrat, mainly b/c he's bridged issues with some conservative voters around gun rights. Also his more centrist appeal has helped economic trends in Montana and made him very popular. There was some debate as to if he'll be asked to be Energy Secretary or possibly head up the Department of the Interior. The NY Times guy thought Bryan would take either appointment, the Helena reporter disagreed.
• The discussion about Schweitzer carried over to a lot of democrats in the NW Rockies area bridging the gap with a lot of conservative voters. The possibilities and implications that might have, etc. Mainly Wyoming and Idaho are seeing some ground-breaking movements and shifts away from the republican base.
• Some national election talk; most of the panel agreed that if Hillary was on the democrat ticket that states like Montana and North Dakota wouldn't be "toss-up" states right now, due to the dubbed, "Clinton War on the West" from the 90s. Most of the national election discussion wasn't a, "who will win," discussion, but a, "How much Obama will win by," discussion. During the open-mic portion a guy in the audience asked when the "gutless" media was going to talk about real issues, kinda funny.

Friday morning had the most amount of info, it featured an economist that's been here all three years. What's funny was that he sounded pretty negative to a lot of people that were hearing him for the 1st time, however in 3 years of hearing this guy it's the most positive report I've heard him say. The new west article I'm linking to here talks mostly about that, so I wont really hammer out the entire discussion. The main points are this, expect another 12-18 months of this continued trend, afterwards don't expect a rapid bounce-back but rather a steady and progressive climb. Also in reference to Montana, we're a bit over-priced (although his numbers were off) and that we'll have a more shallow dip, and we'll bounce back at the same rate the national market does.

The next few sessions were discussions about land ownership, development, Plumb Creek, sustainable development, and master transportation plans, some quick observations from those:

• The moderator for the development session was trying to be very controversial, lashed out against Realtors - saying that he hears "all the time" that Realtors are saying the market is great so we can trick people into buying now. The panel disagreed (3 developers). I think our local organization does a great job of presenting just the facts, and doesn't spin info. Sure you can get conflicting reports, however I think the moderator's statement was off-base. Also add in that our organization was a major sponsor of this event it was somewhat upsetting to see such a one-sided question at an event that we support. Don't get me wrong, dissenting opinion is good, but just bashing on an entire industry - especially one that's sponsoring your event, seems a little mis-guided.
• The sustainable developer was from Red Mountain Ski Hill in Canada, north of Spokane, WA. Interesting stuff, looks like a funky little town and a neat ski hill.
• The master transportation people I got a laugh out of, one guy (who was probably in his late 40's / early 50's) was apparently the authority on my generation (under 30 years old) saying we all "hate" our cars. I understand the point he was trying to make, but in Montana owning a car is almost a must, this isn't downtown Portland we're talking about. Also I think it was the same guy said that we need the "private sector" to build more roads, and that we need to this and other things to promote affordable housing. However private sector = developers, and if the developers have to put more roads and wider roads in constantly then they'll be paying more impact fees and development costs, guess where they get those expenses back? In the houses they build. I think there's a serious dis-connect between city government and how they think they're promoting affordable housing.

The final session was on stream-side setbacks. It was supposed to be a big fight, but it mainly just featured an upset land owner that looked a lot like David Crosby of Crosby, Stills & Nash who was rightfully upset that his lake-front land would be rendered un-use-able with a 250 foot setback (not allowing construction within 250 feet of water). He called some people communists (I love it when the c-word is thrown out there!). There was discussion that maybe a case-by-case basis should be taken, or a variance option. The Davis Crosby dude brought up that there's no language about compensation if his land is "taken" from him, a valid point - if you have 1 acre that suddenly isn't use-able at all b/c it's too close to a lake or live water, shouldn't you be compensated for that? Some interesting discussion, but not the heated debate it was expected to be.

Uh... think that's it! A long post to start the week, I'd better get to work! Also here's that newwest link - http://www.newwest.net/topic/article/housing_slump_wont_recover_until_late_2009_or_2010_economists

Not newsworthy, but funny, I guess.

Today I put together a list of houses in our MLS that are listed as either short-sale (selling for less than what's owed on the house), or foreclosure properties. There were a handful, 29 out 280 in the price range of $200,000 - $300,000. However about every 5 or 6 listings I noticed that the agents in their remarks would either type in all caps, or type some features in caps.

According to the National Association of Realtors I think the average age of Realtors is somewhere in the 50's, and so we've got an MLS full of people typing in a style that interpreted as shouting (By typing in all caps, online print/discussion is meant be considered as shouting.) Kind of made me laugh, I can see some marketing guru talking to a room that's 3/4 full of Realtors about marketing ideas now;

"Alright, you guys want to really stand out, and get your listings sold before anyone else?!? Well I have a secret for you, it's called.... CAPS LOCK!"

<audible gasp from the audience>

"That's right, caps lock is big, it stands out and it makes your features seem even better! Yeah!!! Who's with me?!?"

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So below are some of the property descriptions I saw. Here's what I want you to imagine; you're meeting this agent face to face or you're chatting with them on the phone and he/she is describing the property to you exactly as the description reads, and they shout where ever you see words in all caps, just imagine what you'd think:

First example:

"ONE LEVEL LIVING - LOW MAINTENANCE home- feels good w/ OPEN FLOOR PLAN,vaulted ceilings & gas FIREPLACE. Convenient MASTER SUITE w/double vanity. You will enjoy the DECK w/ pergola which provides a great outdoor living space for entertaining, grilling/dining or quietly lounging & enjoying the nicely landscaped, fully FENCED yard (larger than many of the newer Lolo subdivisions). Ample storage in large garage & shed that stays. Garage wired for 220*. The VALUE and QUALITY are here. Come & Enjoy."

Second example:

"ABSOLUTELY METICULOUS! LOCATED ACROSS FROM PARK AND NEXT TO SCHOOL LAND. HUGE LIVING AREA WITH VAULTED CEILINGS. BUILT PERFECTION."

Third example:

"THIS IS A MUST SEE!! IMMACULATE IN EVERY WAY. NEWER ROOF, SIDING AND WINDOWS. HARDWOOD FLOORS, GREAT KITCHEN, AND MAIN FLOOR UTILITY ROOM. HUGE YARD WITH ALLEY ACCESS, NICE LANDSCAPING AND DECK WITH GAZEBO AND HOTTUB. ROOM FOR RV WITH

PAVED PARKING. THIS HOME IS READY TO MOVE IN AND ENJOY."

Fourth example:

"OPEN FLOOR PLAN! 2 large Main floor bedrooms, PLUS 2 lower level bedrooms or BONUS rooms PLUS office area and lots of storage make this a great home. MUST SEE INSIDE TO APPRECIATE all work sellers have done. Upgraded KITCHEN & BATH. Collectibles LIGHTED DISPLAY built-in cabinetry. Side entrance to lower level. Enjoy wooded area at your back door-PINE TREES & wildlife. 1500 sq ft DECK for entertaining, complete with cascading water feature. COUNTRY LIVING yet close to town! FREE 1 YEAR HOME WARRANTY!"

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Ha, I see this every day, makes me laugh, but I guess i'm just some dumb kid that doesn't maximize the potential of my caps lock key!!

http://www.missoulian.com/articles/2008/12/03/bnews/br40.txt

So this article just came out today, listing the current amount of homes in Montana with mortgages that are listed as 60-days late or worse in the 3rd quarter this year. There's some very interesting info, some quick points to the article:

• Montana's is at 3.96% which is up 1.4% compared to the 3rd quarter of 2007.
• The rate has been around 2% for quite some time, until the 2nd quarter of 2007, then is started to climb to where its at today.
• They project that this will still climb, getting possibly as worse 4.7%.
• Florida is a 7.8%, Nevada at 7.7%
• One projection is that delinquencies should continue at these rates until 2010

So, what's kind of interesting is that Montana's has seen an increase, however the out of the entire state with less than 1,000,000 total people, there's really not a lot of houses going through these issues, compared to 7.8% in Florida with over 18,000,000 people and much more houses.

Overall though, we're talking about a direct housing crisis that's influencing less than 4 in 100 homeowners in the state of Montana. The 2006 Census lists that Montana has 432,023 houses and most national trends show that about 60% of all houses have a mortgage against them. So, doing the math we've got approx 260,000 households in Montana with a mortgage, and 3.96% 60 days or late, that's just about 10,300 houses. Certainly a bunch, but we're not talking staggering numbers here. Again pulling up Florida we've got 8,533,419 houses, again if we use the 60% rule we've got just over 5.12 million houses with mortgages and 7.8% behind, that's nearly 400,000 homes!

No one can deny that the housing / credit / bailout issues are hurting almost all of us in some negative way or another, but remember that each real estate market is different, and we see different affects in different areas.

Just last week Dr. Larry Swanson an economist with The Center for the Rocky Mountain West did a mass presentation about the Montana economy, how it's doing, and where it's headed. There was also a panel of speakers there, the president of the Home Builders Assoc, our Realtor board President, a Hotel/Convention Center manager, the manager of the Southgate Mall, and a manager from a regional bank, First Security. It was a pretty interesting discussion, in fact I've got the power point slide-show, if you'd like it let me know I'm happy to email it.

Larry started off that all of the US is being hit by the current recession, however certain areas of the country are actually making worse of the local economy by just reading the news, Montana was an example. Our economy here is steady, not great, not bad, but steady. However many people turn on the TV and hear the sky is falling, and they presume it's happening here too.

A few points from his presentation that I'd like to pass along:

• If you were to remove California, Florida, Nevada, and Michigan from the national trends there is no recession and there is no burst in the housing bubble. The mass loss of jobs, economic slowdown, and deflation in home values comes from these 4 states. Now, that doesn't mean all would be fixed, however the massive declines mostly come from these areas.
• In the western half of the US, we see a housing and economic trend that flexes and bends, when California/Nevada are up, the rest of the collective western states are down, and when Cal/Nev go down the rest of the western states go up. Where are we right now? Well Cal/Nev is headed down and the rest of the western states are headed up, and at this point they're just about equal, which suggests in the next 2-3 years strong economic gains in states like Montana
• This year Montana home-owners have lost just $1,000 in median value, a 0.05% price decline.
• This year Missoula's SALES volume is down 28%, the Missoula valley will have just under 1,000 residential sales this year.
• Missoula is in one of the nation's top-50 small-sized towns in regards to growth, economy, and housing prices. Billings & Great Falls also fell on this list I believe, I'll double check that.
• Next year Larry predicted we could see legislation that will lock 30-year interest rates at 4%. That would be interesting, during the early 2000's when sales went nuts interest rates were never that low, usually in the mid-low 5% range.
• Montana's economy is largely service based, construction, medical, real estate, and general services are some of our biggest portions of the economy.

I'll scan through that report and put some more points up after Christmas

I've really only posted on my office page, I'll copy and paste my posts on here, today I'll get some of my most recent blogs up.