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October Real Estate Statistics for Billings, MT

Laure & Steve — Tue, 29 Dec 2009 17:39:30 +0000

Please follow the links to the statistics for October 2009. As you can see we are still behind last year in number of homes sold and dollar volume. However for September, October and November we had more units close than we did last year. This could be attributed to the first home buyer tax credit and the new tax credit for move up buyers. The full picture on that won’t become apparent until the tax credits expire next year. Hopefully by then the economy will be closer to recovery.

Handout October 2009

MLS Area Charts October 2009

MLS Statistics October 2009

Closed Units by Month – 2007-2009

Billings Real Estate Market Statistics for October 2009

Laure & Steve — Wed, 18 Nov 2009 18:57:15 +0000

Here are the links to this months statistics reports. Our closed residential sales are only around 5% down from last year. That is good news. Let’s hope the trend continues for the rest of the year.

Handout October 2009

MLS Area Charts October 2009

MLS Statistics October 2009

http://www.billings.org/

Renting vs Buying a Home in Billings MT

Laure & Steve — Thu, 05 Nov 2009 22:53:39 +0000

Americans believe in the dream of homeownership. With all the foreclosures and bankruptcies taking place, however, is it cheaper for people to rent rather than buy?

When it comes to the decision of renting vs. buying, most people make the decision based upon a comparison of monthly payments. If their rent payment is less than the payment on a home, many decide that it’s cheaper to rent than to buy. This approach, however, fails to take into account a number of other factors that influence the total costs of homeownership, rather than just the monthly payments.

The first step for any person who is considering buying (or selling) a home is to talk to a tax professional. Each person’s tax situation is different. When you purchase a primary residence you can normally reduce your withholding taxes. That is because the interest on your mortgage is tax deductible.

One of the most compelling reasons to buy rather than to rent is to lock in a permanent monthly payment at today’s rates for the next 30 years. If possible, obtain a fixed-rate mortgage for 30 years. This means that your mortgage 20 years from now will be at the same rate as it is today. In contrast, rent payments tend to keep pace with inflation.

The current 10-year average inflation rate is 2.82 percent per year. (The average since 1913 is actually 3.41 percent a year). Assuming the inflation rate continues to average 2.82 percent per year, in 2019 your $1,000 mortgage payment would be the equivalent of $718 in today’s dollars. If your property value keeps pace with inflation, it would have increased in value by approximately 28 percent as well, making it worth $128,000. Furthermore, you would have paid down your loan for 10 years.

Assuming a 6 percent interest rate on a 30-year fully amortized fixed-rate loan, your balance on your original $100,000 loan would be $83,686. Consequently, your equity position after 10 years would be $16,314 ($100,000 minus $83,686) plus $28,000 in appreciation due to inflation, for a total of $44,314. (This calculation does not take into consideration any amount that you would have placed on the property as a downpayment.)

Of course, there are other costs of homeownership to consider, too, such as homeowners association dues, property taxes and utility bills.

Compare the above example to the costs of renting. If your rent payments kept pace with inflation of 2.82 percent per year, your rental costs over the same period would increase 28.2 percent ($1,282 per month vs. $1,000 today.)

Assuming a 2.82 percent inflation rate over the next 20 years, this example becomes even more compelling. Your monthly loan payment of $1,000 would be the same as $436 in today’s dollars. If your property value kept pace with inflation, it would now be worth approximately $156,000.

After 20 years, the balance on your $100,000 fixed-rate loan would be $54,359. Thus, your equity position would be $56,000 due to the inflation-related appreciation increase plus $45,641 in principal reduction, for a total equity position of $101,641.

In terms of rent 20 years from now, if it kept place with inflation you would be paying $1,564 per month. That’s an extra $6,768 per year more than your mortgage payments if you had locked in your 30-year fixed-rate loan at time of purchase.

The wild card in this entire discussion is inflation. Many experts are predicting that the only way our government can pay our debts is to print more money. The result will be increased inflation. Using the 10-year example from above, paying off a $1 billion loan after 10 years of inflation at 2.82 percent means that the real payoff amount is $718 million in today’s dollars.

For an individual, this may be the best reason to purchase real estate. If you hold your property for the long term, it will normally keep pace with inflation, creating additional wealth. When you rent, you pay off your landlord’s mortgage and make him or her wealthy. These are among the reasons that homeowneship remains an American ideal and the norm.

Billings Real Market Statistics for September 2009

Laure & Steve — Wed, 28 Oct 2009 16:48:26 +0000

I am a little late giving you the statistics this month. They continue to look better each month. It will be interesting what will happen if the $8,000 first time home buyer tax credit is not extended.

MLS Statistics September 2009

MLS Area Charts September 2009

Handout September 2009

Billings, MT Housing Market Statistics

Laure & Steve — Tue, 29 Sep 2009 20:58:47 +0000

Here are the market statistics for the Billings area. The activity is still below last year but not by quite as large of a percentage. Our average sales price has dropped by 2.91% from last year. Not bad considering other parts of the country.

MLS Statistics August 2009

MLS Area Charts August 2009

Handout August 2009

http://www.billings.org/

Billings Real Estate: Housing Market Update

Laure & Steve — Wed, 26 Aug 2009 15:34:06 +0000

Here are the statistics for July. Our inventory is catching to last year but our sales volume is still down around 20%. However, our average sales price is going up and our days on the market are coming down.

Handout July 2009

MLS Area Charts July 2009

MLS Statistics July 2009

We keep hearing from the news media that the recession is over so let’s all hope that our market bounces all the way back.

www.billings.org

Great Tips For First Time Home Buyers in Billings Montana

Laure & Steve — Thu, 09 Jul 2009 17:42:02 +0000

Home-price adjustments in markets around the country have opened doors of opportunity for many renters. If you are transitioning from renter to homeowner, the prospect of making such a large investment may be exciting, while at the same time overwhelming. But it doesn’t have to be. Here are six common mistakes to avoid.

1. Not understanding the home buying process. Educate yourself. Find a home buyer seminar that you can attend or research online. The U.S. Department of Housing and Urban Development web site has an entire section devoted to home buyers with common questions of first-time home buyers, mortgage and home-buying programs information, downloadable tools such as a wish list and home-shopping checklist, tips on selecting a real estate professional, etc. Likewise, Prudential Real Estate’s popular web site, offers consumers brand-new tools for the home buying process, such as free home environmental reports, Value Range Estimates and Property Profiles, among other resources.

2. Not asking questions. There are many facets and intricacies to the home buying process, so although you may gain a basic knowledge, you will still have questions. Don’t hesitate to let your real estate professional know that you are new to the process. Make sure you choose a sales professional who is willing to spend time with you and walk you through the entire process. He or she will expect you to have questions at each step-from house hunting, to making an offer to the closing. Remember, this is one of the largest financial transactions of your life, so you want to have a clear understanding of what’s going on.

3. Buying on impulse. Don’t feel pressured into making an offer on the first home you see. Buyers, especially first-timers, may be impressed by the first two or three homes they view. Look at a good selection. List the positives and negatives about each home. Narrow the prospects to three or four and then return for a closer look. When you decide to make a bid on a property, work with your real estate professional to get all of your questions answered before making an offer. But don’t wait too long to make an offer. The longer you wait, the greater the chance other prospective buyers may place offers, making it harder for you to negotiate a good deal.

4. Looking outside your price range. Before beginning your home search, consider getting pre-qualified to so get an idea of how much you may be able to borrow. Use this information as a starting point in determining your price range. Then take into consideration other factors that will affect your monthly budget once you are a homeowner, such as property taxes, homeowners insurance, utilities, private mortgage insurance (PMI) and maintenance.

5. Not planning ahead. Think about personal changes you are planning in the next five to seven years. For instance, are you starting a family, and if so, is the home large enough and will it continue to be? If this will be a starter home or if you think you’ll be relocating in a few years, you’ll probably want to pay closer attention to appreciation and resale value. If a double-income is necessary to qualify for financing and to make your payments, do your plans foresee an income sufficient to continue making payments?

6. Failure to focus on location. Don’t just focus on the house. Examine the community. Does it suit your lifestyle? Is the area safe, well-maintained, close to work, stores and schools? Find out about zoning and what new construction is planned on vacant land in the immediate area. Also consider the property marketability when it’s time to sell.

Above all, remember knowledge is key. No question is a silly question. Your real estate professional can be an invaluable asset throughout the process. Making smart home buying decisions will make the home-buying process less scary and your first home purchase a rewarding experience.