Considering a Fixer-Upper? Think About These Things First

A property that requires renovations is known as a fixer-upper. For many owners, this purchase has several advantages. In some cases, this type of property can offer an excellent investment opportunity. However, buying a fixer-upper can have a few disadvantages as well. There are instances when renovations can cost more money than the property is actually worth. For that reason, before making an offer on the property, it is important to get the property inspected by an experienced home inspector. The inspector can evaluate the area, the condition of the property, and the extent of the renovations. More importantly, the inspector can identify renovations that are simply minor cosmetic repairs vs. renovations that require major structural improvements. Potential owners should consider the amount of time required to complete renovations. A precise timetable is useful for determining whether property prices and current mortgage rates are likely to increase or decrease during renovations.





Owners that are considering buying a fixer-upper should identify all structural renovations. In most cases, major repairs such as electrical and plumbing are expensive. These types of renovations do not increase the value of the property. Moreover, strengthening the foundation and repairing the roof will not raise the value of the property either. These improvements are a major disadvantage of purchasing a fixer-upper; however, they are required to sell or live in the property.





When a fixer-upper is in a quality area and does not require major structural renovations; renovating the property and reselling it is a considerably profitable option. For many potential owners, it may be beneficial to weigh the pros and cons of buying a fixer-upper.





Advantages of Buying a Fixer-Upper




Reduced Buyer Competition




A fixer-upper is a property that requires renovations and most buyers are not interested in performing extensive improvements. Reduced competition for the property is an advantage that some buyers find appealing. In most cases, decreased competition for the property can reduce the final price the buyer pays.





Personalize The Property




Another advantage of buying a fixer-upper is the buyer can fully customize the property. Many buyers believe placing a personal stamp on the property can make it a home. Do-it-yourself repairs that include cosmetic renovations offer a level of satisfaction. These are inexpensive repairs that are visible when reselling the property. Minor DIY renovations that owners find enjoyable are replacing fixtures, paint jobs, stripping wallpaper, placing tiles or carpet, putting in ceiling fans, and replacing windows or barndoor hardware. These types of renovations can increase the value of the home and add style.





Disadvantages of Buying a Fixer-Upper




Going Over Budget




The biggest disadvantage of purchasing a fixer-upper is going over budget. Although loud renovations can create sound issues and living complications; going over budget, is the most common issue associated with buying a fixer-upper. In some instances, an inspector may identify one issue that leads to another. The inspector may even inform owners that one repair cannot be completed until other improvements are completed. For example, foundation issues may not be completed until all plumbing and electrical issues are resolved. It is important to add that a home warranty can protect owners from high costs associated with failures of major systems.





Decreased Return on Investment




Another disadvantage of buying a fixer-upper is the improvements do not return 100 percent of the cost when the owner sells the property. In the event the property requires specific improvements, the owner should attempt to offset costs with valuable cosmetic enhancements. Cosmetic renovations offer the most effective opportunity to receive a return on investment.





Frustration and Inconvenience




Whether owners are completing the repairs or hiring professionals, there is a lot of time supervising and ensuring the work does not go over budget. This is a frustrating and trying process. Owners must guarantee that issues are corrected inexpensively and completed in a timely manner. This is a common disadvantage associated with purchasing a fixer-upper.





When considering purchasing this type of property, potential owners need to weigh the pros and cons. Owners must ensure that the property is worth the price. More importantly, owners must ensure renovations do not cost more than the property itself.

Written by David Glenn

What is unique about Eagle Rock Reserve, Bozeman, MT

Surrounded by open meadows, forests and mountains. Eagle Rock Reserve is unique in its design, goals and access to Bozeman and spectacular natural scenery. Eagle Rock Reserve was created to accommodate 39 single family residents while protecting the natural scenic and environmental integrity of the land and the security and the quiet enjoyment of the owners.

You can readily see differences between the Reserve and other subdivisions within the Bozeman area. Most apparently, no homes are located on ridge-lines -- home sites are tucked down, sheltered by ridges or forest, providing privacy and scenic enhancement. Equally importantly, the residents of Eagle Rock Reserve maintain a balance between protection of the area's open spaces and wildlife habitat, Montana's agricultural heritage, and private home ownership. Those physical and philosophical differences exist by design and choice, and the Reserve's owners cooperate to support these goals in their decisions about their own properties and the common property in the Reserve.

Located only 5 miles southeast of Bozeman at the edge of Mt. Ellis, the 774 acre Reserve borders on the north edge of the greater Yellowstone wilderness. From its back gate, the high peaks of the Gallatin Range shoulder their way south into Yellowstone National Park, uncrossed by roads for 66 miles. Recreation opportunities in and around the Reserve are abundant. Yellowstone National Park, three major ski area, Bridger Bowl, Big Sky and Moonlight Basin, a dozen or more blue ribbon trout streams, endless picnic sites and forest trails for hiking, skiing and horseback riding can be daily adventures from the Reserve.

Supporting flora and fauna typical of the inter-mountain grasslands and forests, an average rainfall of more than 24 inches keeps the Reserve's meadows green throughout the summer. Wildlife abounds, and much of the 600 acres of the common lands of the Reserve serves to protect wildlife habitat, including the historic winter range and calving grounds of the Mount Ellis elk herd.

In a small way, that is what Eagle Rock Reserve is about...in both allure and reason. For by design, Eagle Rock Reserve acts as a buffer between the growing urban area of Bozeman and the Greater Yellowstone Wilderness. Its purpose is, in many ways, similar to and supportive of the goals of the Greater Yellowstone Coalition, the Montana Land Reliance, and the Nature Conservancy, as well as the everyday practice of many present ranchers and land holders in Montana who provide private stewardship for natural areas.

The Reserve's covenants and design review guidelines have been carefully drawn not only to preserve the value of each owner's investment but also to fully protect the peaceful environment  of of the Reserve's forest, grasslands and wildlife habitat. The Eagle Rock Reserve Owners Association assures that the covenants are respected and that the roads, land, forest and streams are well maintained and managed. The single-entry road system, front gatehouse and on-site manager assist with security and maintenance.

Bozeman, the home of the Montana State University, offers numerous commercial, educational, recreational and cultural activities including the arts, music and sports events, fairs, golf courses, fine medical services and a wide variety of dining and shopping opportunities.

As the major air gateway to Yellowstone National Park, Bozeman has an excellent airport only 25 minutes from the Reserve, with dozens of departures a day.

Suitable for a year-round home, family vacation retreat, or active retirement base, the Reserve has been designated for people who want to enjoy the spectacular scenery and lifestyle of the West in quiet harmony with nature, close to wilderness and outdoor recreation, but also with easy access to town and good air transportation. It is a combination rarely ever achieved or protected as it is in the Reserve.

Eagle Rock Reserve Owner's Association:
http://erroa.org/index.html

Bill Ogden, the founder of Eagle Rock Reserve:


To learn more about Eagle Rock Reserve, or to view a lot for sale:
http://www.prumt.com/property/details/Land-Lots/188627/Tract-31-Star-Ridge-Road-Bozeman-Montana-59715

 

Tripp Emerling
Sales Associate, CSO
Prudential Montana Real Estate
406-579-6978
tripp.emerling@prumt.com

Confident Home Buying: Is This the House for Me?

Buying a house is likely the single largest investment you'll make and, like a good marriage, if it's the right one, it may last a lifetime. But how can you be confident in your home buying, especially if you're a first-time buyer? With so many homes to choose from, how do you know if this house is the one?

Sounds like a dating question. And, coincidentally, using some of the same techniques used to determine if you're marrying the right person may also help you decide which home is the best for your needs. These days more buyers are coupling up–-buying homes together (even if they're not in a relationship) to offset the cost and be able to afford more.

You've heard of buyers' remorse and you know you sure don't want it. Sometimes fearing buyers' remorse can actually lead to buyers' inactivity. They become afraid and so they do nothing. They shop, they see, they even put offers in but in the end, they don't close. If you're a serious buyer, you don't want to get stuck in a cycle of looking and never owning.

So, how can you be confident that the home you're buying will meet your needs? Start with some basic guidelines. Make a list of your must-haves, needs, and wants. These are truly three different categories. Yes, some things you list may overlap but after your list is started, you'll begin to see what really matters to you. Sometimes buyers will be shopping for a home with a pool, but when they finally make a list they realize that money is very tight and the added cost of heating a pool will be too much of a drain. So they revise their home-buying desires and start house-hunting all over again. It would've been far more effective to have considered this from the start.

Next, study the home or apartment that you're currently living in. What are the positive aspects of it? Are there things about the place you live in now that you absolutely can't stand? Taking stock of what is working and what isn't in your current home provides a good blueprint for the things you should consider when searching for your next home. Remember to be honest. Sometimes we tend to forget the bad things about a home due to its sentimental value. If you look at your current home with a critical eye, you'll know which areas caused a big headache and then you can be sure you don't buy another with the same problem.

For instance, maybe the home needs a lot of fixing up and you and your spouse barely survived the remodel without tearing each other apart. You might then want to search for homes in much better condition to limit the fixing up. Our minds have a wonderful way of forgetting the bad, once the bad is over. But, trust me, you'll remember once you're back in the same scenario again.

Do your homework and get everyone's feedback. Unless you're buying a home alone, you should spend time meeting with those who will be living in the home to discuss what's important. Sounds obvious...yes, but guess what? A lot of times Buyer One and Buyer Two don't even talk about what's really important to each other until they start searching for homes. Then they realize how truly different their views and expectations are and see the necessity to compromise a little. Time is better spent reviewing and discussing first. That way, an agent can make sure the properties being shown are in line with everyone's desires.

Finally, plan ahead. Especially if you're moving a family or you're moving in with someone else. Use a synchronized calendar, like Google, to help map out all the meetings and showings. There will be lots of important meetings to attend and if you can't get the necessary buyers there, the process will be stalled. Without the necessary buyers present, you can't be confident the home will satisfy. Plan. Schedule. Commit. This will assure that the home-buying process will be a success.

August 17, 2012 -- Realty Times Feature Article by Phoebe Chongchua

Home Improvements That Sell

In a mash-up survey of 450 real estate agents and 1,660 homeowners, homeowners get it - most of the time - when it comes to home improvements that help induce sales and higher prices.

Realtor.com's home improvement survey, conducted online from June 6 to June 13, 2012, tapped agents and Realtor.com users who are homeowners planning to improve their home before putting it on the market.

Given today's home buyers are aware of soft market conditions that can put a drag on values, they want a home that's ready to appreciate and that's a home in the best shape possible. Nearly 90 percent of real estate agents believe home improvements can help a home sell faster, and nearly 73 percent say home work can boost the price, provided the home improvements are the right home improvements.

Nearly three in four (71.4 percent) real estate agents say sellers too often underestimate the power of simple home improvements - repairs, painting and cosmetic upgrades. Not so, say more than one in four (75.21 percent) of homeowners polled. They most certainly plan to repair broken household items before listing their home for sale.

Also, 65.9 percent of real estate agents said another common mistake among homeowners is not making "the right" home improvements for the local market. Like upgrades from home to home help pull up values overall.

Agents, 62 percent of them, also said too many homeowners make specialty improvements based on their own tastes rather than what might appeal to a buyer.

 Recommended home improvements 

 The most common home improvements recommended by real estate agents included:

• The vast majority, 96.5 percent, of real estate professionals surveyed recommend sellers repair household items that are broken before putting a home on the market.
• More than half, 63.8 percent, of real estate agents recommend sellers make kitchen improvements.
• Most, 59.3 percent, of real estate professionals recommend sellers make bathroom improvements. What sellers improve Are sellers complying with real estate agents' recommended home improvements? Again, for the most part, yes.

The most common improvements made by home sellers:

• A majority, 75.21 percent, of sellers planning renovations will repair broken household items before selling their home.
• Most, 53.43 percent, of owners plan to add new flooring before selling their home.
• Also most, 53.37 percent, of sellers plan bathroom improvements before selling their home. Homeowners appear to have dropped the ball on kitchen work, but they aren't pinching pennies when it comes to home improvements that sell. Home improvement budgets were $2,001 to $5,000 for 24.1 percent of home sellers planning improvements; $5,001 to $10,000 for 22.23 percent and $10,001 to $20,000 for 16.63 percent.

August 16, 2012 -- Realty Times Feature Article by Broderick Perkins

Living Modern in Montana ~ 112 Cobble Creek Road, Bozeman MT

Stephen Dynia's contemporary design ~ 112 Cobble Creek Road, Bozeman, MT

 
The highest standards of architect Stephen Dynia’s contemporary design approach have been applied to this sleek, clean-lined home. Situated on nearly 17 acres, just minutes from historic downtown Bozeman, this masterpiece embodies the very best of innovation, embracing a truly unique landscape.  The home's architecture creates fluidity and a sense of harmony between nature and structure.  Every aspect of the materials and design is integrated to provide sustainability in a dramatic setting.

Nestled in the fields south of Bozeman, Montana off Sourdough Road.

Situated on nearly 17+/- acres, just minutes from historic downtown Bozeman

For more information: http://www.finehomesmt.com/cobblecreek

During the day, the home is passive solar, with sunlight heating, shaping and articulating the living spaces. The expansive south-facing glass wall affords unobstructed views of the Gallatin and Spanish Peaks Mountains.  At night, the expansive wall of glass ties the southern starlit sky into the living area. Glass doorways open onto a 1,400 square foot Tiger Wood deck and adjacent 400 square foot patio dining area, providing for seamless indoor/outdoor living.

Unobstructed views of the Gallatin and Spanish Peaks Mountains

General Resident Features:

•     Designed by Stephen Dynia Architects, winner of several AIA awards
•     Extensive use of passive solar (heating is not needed on most winter days)
•     Rough sawn beams and walnut flooring throughout the main living area
•     Two limestone fireplaces situated at either end of the living space
•     Crestron Adagio Distributed Audio System featuring six independent zones and six audio sources
•     Home Theater System featuring full Dolby 7.1 Surround Sound, B&K Home Theater System,   Sony HD
•     1080p Cinema Projector, 85" Wide - Automatic Drop-Down Projection Screen and a wet bar/morning kitchen with a U-Line Beverage Cooler

Home Theater System featuring full Dolby 7.1 Surround Sound

•     Four 1080p Flat Screen HDTVs with hidden components in Master Bedroom, Kitchen, Guest Room and Studio Apartment
•     383 Bottle Wine Room
•     Large irrigated garden and adjacent chicken coop (non-permanent structure on concrete patio which can easily be removed and transformed into a garden patio dining area)

Gourmet Kitchen:

•     Two Freestanding Islands one with counter seating and one with bar-height seating
•     Teak Cabinetry and Cambria Countertops throughout
•     Two Dishwashers - Miele and Fisher Paykel
•     Commercial-Grade 5-Burner DCS Range/Oven
•     Three Blanco SteelArt Designer Sinks
•     Reverse Osmosis Water Filtering System
•     Two InSinkErator Garbage Disposals

Gourmet Kitchen with two freestanding islands and three Blanco SteelArt Designer Sinks

Designer Finishes:

•     Louis Poulsen Artichoke Chandelier
•     Dining Room Features a Louis Poulsen Artichoke Chandelier. Designed by Poul Henningson in 1958, the PH Artichoke is considered a classical masterpiece. The original PH Artichokes were created for the Langelinie Pavilion Restaurant, where they still hang today.

View of the dining room looking south east towards Triple Tree and the Hyalite Mountains.

Louis Poulsen Artichoke Chandelier

•     Dornbracht Kitchen and Bathroom Fixtures throughout the residence. All fittings and accessories that bear the name Dornbracht are of the highest quality, possess pioneering design and place a clear and unmistakable emphasis on function.
•     Duravit Toilets in Powder Rooms and Master Bath, designed by Philippe Starck.
•     Powder Room Sinks feature cutting-edge contemporary design, manufactured in France by Julien.
•     All Baths include Zuma Collection Contemporary Soaker Tubs
•     Oceanside Handcrafted Glass Tile installed in Master Bath. Villi Glass Mosaic Tile installed in other baths creating a unique brilliance using the interplay of light and color.

Oceanside Handcrafted Glass Tile installed in Master Bath

•     Robern Cabinets in Master Bath provide minimalist design blends with modern, innovative technology.
•     Architectural Door Hardware by Omnia
•     Oceanside Handcrafted Glass Tile
•     Master Bathroom

For more information: http://www.finehomesmt.com/cobblecreek

For more information or to schedule a showing, please contact:

Carol Lister

Broker, CRS, GRI, ABR

Prudential Montana Real Estate

2001 Stadium Drive, Ste. A

Bozeman, MT

59715

carol.lister@prumt.com

406-581-9376

http://www.carollister.com

Carol Lister, Broker, CRS, GRI, ABR - Prudential Montana Real Estate

Lake Davis, Sales Associate - Prudential Montana Real Estate

or

Lake Davis

Sales Associate

Prudential Montana Real Estate

1925 N 22nd Avenue, Suite 201

Bozeman, MT

59178

lake.davis@prumt.com

406-539-1519
http://PruMT.com

Sellers Getting Comfortable With Today's Housing Prices?

The wealthy may soon be feeling the pinch as the luxury housing market takes a hit. According to RealtyTrac, homes listed for over $1 million have dropped 20 percent in 2012. That means the average sales price for expensive real estate homes has gone from $2.5 million, last year, to just above $2 million. Some higher-priced luxury homes are even lopping off several millions of dollars in hopes of finding buyers. 
 
Interestingly, after many years of waiting and hoping, the more vast real estate market is experiencing some price stabilization and possibly even seeing prices rise a bit. Some say that's because sellers are getting comfortable with the lower sales price. 
 
However, other experts argue that the increase is more likely seasonal rather than a true sign that the market has completely bottomed out. Part of the reason for the skepticism, industry economic experts say, is because there is a large looming mass of homes either nearing a foreclosure or already in progress. As those foreclosed homes quickly and massively come into the marketplace, it's likely prices would drop. 
 
But in the last couple of months, the press has reported on housing inventory dropping in some markets and competitive pricing is most evident in the markets that suffered greatly from foreclosures such as Phoenix, Miami, and parts of Southern California. Markets like Phoenix and San Francisco are seeing some speculative purchasing and that is raising concerns about possible market bubbles. 
 
If you're selling your home now should you be concerned? Not if you're taking the right precautions and hiring the most experienced industry professionals to assist you. Understanding the pros and cons of a particular market is vital.
According to the National Association of Realtors, nationally, first-time buyers made up only 35 percent of existing single-family home sales during the month of April. That compares to 40 to 45 percent of the market in better times. 
 
Statistics like that matter because they point to economic barriers that could keep your home on the market longer than you desire. It's, of course, the tight credit lending restrictions, high unemployment rate, and overall unstable economy that are, in some cases, shutting out first-time buyers. 
 
But the flip side is that continuing low interest rates are still drawing wannabe homeowners out to search for their perfect house which has likely dropped a good 35 percent from what it was during the housing peak. 
 
Another factor contributing to the overall real estate market is that it's an election year. Due to uncertainty, some predict that buyers may be inclined to purchase before the end of the year. Others fear that, depending on the outcome of the election, some of the tax cuts currently in place will expire. 
 
Also, your pricing could be affected depending on the style of home you're selling. The number of buyers interested in the senior housing market is increasing. Lots of Boomers are aging and they have many ailments. Apartment living lacks the privacy they desire but often single family homes aren't suitable. So housing that features senior-friendly accommodations like a master suite on the first floor tend to be in demand. If you have a home that is designed to allow buyers to age in place, it's a good idea to market it that way. 
 
Remember when selling your home, follow a few simple rules. Study the market. Get expert advice. Know your target audience. Highlight the most desirable aspects of your home and, be realistic with your listing price. 

August 10, 2012 -- Realty Times Feature Article by Phoebe Chongchua 

Record Low Mortgage Rates Helping to Stir the Housing Market

In Freddie Mac's results of its Primary Mortgage Market Survey®, the average 30-year and 15-year fixed-rate mortgage hitting new all-time record lows along with the 5-year ARM. The average 30-year fixed has been below 4.00 percent all but one week in 2012. The average 15-year fixed-rate mortgage has been below 3.00 percent for 8 consecutive weeks.
Freddie Mac's Chief Economist highlights how these record low mortgage rates are fueling housing demand in its July U.S. Economic and Housing Market Outlook. 
 

30-year fixed-rate mortgage (FRM) averaged 3.53 percent with an average 0.7 point for the week ending July 19, 2012, down from last week when it averaged 3.56 percent. Last year at this time, the 30-year FRM averaged 4.52 percent.  15-year FRM this week averaged 2.83 percent with an average 0.6 point, down from last week when it averaged 2.86 percent. A year ago at this time, the 15-year FRM averaged 3.66 percent.  5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.69 percent this week, with an average 0.6 point, down from last week when it averaged 2.74 percent. A year ago, the 5-year ARM averaged 3.27 percent. 1-year Treasury-indexed ARM averaged 2.69 percent this week with an average 0.4 point, the same as last week. At this time last year, the 1-year ARM averaged 2.97 percent.     According to to Frank Nothaft, vice president and chief economist, Freddie Mac:    "With little signs of inflation and the Federal Reserve's "Operation Twist" keeping U.S. Treasury bond yields in check, fixed mortgage rates are remaining low and helping to stir the housing market. For instance, the 12-month growth rate in the core Consumer Price Index has been in a narrow 2.1 to 2.3 percent band over the past nine months ending in June. Meanwhile, new construction on one-family homes rose for the fourth consecutive month in June to its strongest pace since April 2010 with builders restocking their lean inventories of new homes.  In fact, homebuilder confidence for the next six months rose for the third month in a row in July to its highest reading since March 2007."  July 20, 2012 -- Realty Times Feature Article

Housing Cycle Reaches Low Point

Home sales volume last year was up modestly over 2010, but there was an important shift in their composition: Investors were stepping up to buy while households dropped back. There’s a positive side to this. Our surveys show that households getting into the market are doing so for all the right reasons. They’re seeking a different home or another neighborhood. They’re not buying just so they can flip the house at the first sign of market change.

These buyers are getting in at the low point of the housing cycle, so meaningful wealth gains over the next few years are inevitable even though financial considerations are not their principal motivation. From 1981 to 2011, despite the housing bust years, home values more than tripled. For that reason, households who bought 30 years ago are sitting pretty financially. Renters’ typical net worth, by contrast, barely changes, so renters today have about $4,000 in net worth, not much different than they had a few years ago. Compare that to home owners, whose net worth is typically around $160,000. That’s down from $230,000 at the height of the housing bubble, but it remains in stark contrast to renters.

Looking ahead, we could see a greater unequal distribution of net worth over time as home prices rise. Those who will benefit the most are those who, like many investors and some households, are buying during this low point.

Unfortunately, many would-be buyers are either hampered by today’s excessively tight credit requirements or earning too little to qualify. On the first problem, we will continue to urge lenders to return to reasonable, pre-bubble standards. On the second, those who lack the income to buy face challenges that go beyond our ability to help. At a minimum, we can encourage young people to stay in school, since high school dropouts are far more likely to struggle economically throughout their lives than graduates.

May 2012 | By Lawrence Yun
Learn what the latest economic indicators mean for the real estate industry.
http://economistsoutlook.blogs.realtor.org

Big Sky Returns

For the past few years we've all been hoping for the best while preparing for the worst. Just when the news cycles seemed the bleakest, a ray of hope would peek through the mist when things started moving into positive territory, another shoe would drop and correct the mood.

And then there's Big Sky in the summer.

What's not to like? A new movie theatre is now showing first run films in a first rate facility. New restaurants have added to the selection of fine dining venues. There are zip lines, mountain biking trails and outdoor concerts. The days are sunny and the evenings are cool. And real estate prices are at pre-2004 levels‹that seems like a bargain, and it is. Even the afternoon thundershowers only help add drama to the already beautiful panoramas.

While not completely insulated from the events affecting the rest of the country, this resort community has developed a strong attraction for many people, and it's continued to improve and grow, not always in a linear progression, but grow nonetheless. Following the triple blows of the Yellowstone Club reorganization, the Moonlight Basin reorganization, and then the liquidation of the Club at Spanish Peaks, the area is now somewhat chastened by the recession, but in a solid position for continued growth.

A much-improved Highway 191 makes driving Gallatin Canyon from Bozeman to Big Sky smoother than ever. The Bozeman-Yellowstone International Airport's expansion was perfectly timed, and the facility can now receive more than 400,000 visitors annually and has added more direct flights than ever before. The Big Sky ski resort posted its largest ever skier day-count numbers last winter. Moonlight Basin had its most profitable ski season ever, according to MLB reps. Yellowstone National Park down the road anticipates record-breaking visitations in 2012.

The sporadic recent reports of the national decline in housing inventory are mirrored in our local supply of housing stock. Here's what that means for the Big Sky market:

There are currently 101 "improved" properties listed in the Meadow area for sale; those are homes, condos and town-homes. In the Mountain Village there are 152, with a high-end listing for $5,850,000 and a low end of $59,500 in the Hill Condos.

So, what's sold? Well, 81 Mountain Village properties sold in the last 12 months, 67 properties for under $1 million and 14 for more than $1 million. The top end property sold for over $5 million. In the Meadow, 100 properties sold during the past year. Four of those sold over the $1 million mark, seven were sold for between $500,000 and $1 million and 89 sold for under $500,000. Twenty-nine sold for between $250,000 ­ $500,000 and 61 units sold for under $250,000. Thirty-nine of those sold for under $150,000.

Of the 181 properties that sold in the past year, the average DOM (days on market) was 230, with a several sales on the market for 0 days (priced attractively, no doubt), and 14 properties listed for over 600 days, seven of which were listed for over 1,000.

Evaluating both areas, there are 253 currently listed properties, and there were 181 sales in the last 12 months. This shows that over 70 percent of the supply of housing was absorbed over 12 months. Seventy percent absorption means that there are still some listings out there, which have failed to attract a buyer, for some reason or another; however, with a 3.6 month supply of housing, the market is tightening up.

We're seeing price increases in some sub markets. In Cascade, for example, the high price two years ago was $1.25 million for a single family home. This past spring there were three sales at $1.39 million, $1.5 million and $1.65 million.

All and all, those are nice Big Sky market returns.

Eric & Stacy Ossorio - Brokers

Eric Ossorio is a managing broker of the Prudential Montana Real Estate/Ossorio Real Estate Group in Big Sky, where he works with this wife and partner Stacy.

He's lived in Big Sky for 20 years, and been a broker for 35. Having almost seen it all, he sees no reason to live anywhere else. Contact him at (406) 539-9553 or ossoriorealestategroup.com

Real Estate Outlook: International Boom

International sales were up considerably in the last year, with low prices and a weak American dollar attracting international buyers.
The latest National Association of Realtors 2012 Profile of International Home Buying Activity found that residential international sales rose from $66.4 billion in 2011 to $82.5 billion for the year ending in March 2012.  
"Today's advantageous market conditions have drawn more and more foreign buyers to the U.S. in recent years, signaling how desirable and profitable owning property in this country can be," said NAR President Moe Veissi, broker-owner of Veissi & Associates, Inc. in Miami, Fla. "Low housing prices, a good inventory condition and increased buying power with today's exchange rates help attract international clients. Foreign buyers also have the advantage of working with a Realtor®. Realtors® who specialize in serving international clientele have a truly global perspective; they know what hurdles foreign buyers  face when purchasing property in the U.S., and have the expertise and knowledge that comes from working with clients from different cultures and real estate practices."  
Several areas attracted more international interest than others. The NAR survey found that Florida, California, Texas, and Arizona led the way. Florida was a hub of activity, making up 26 per cent of all foreign purchases nationwide. California came in a close second, accounting for 11 percent of all foreign purchases.
The survey found that European buyers were attracted to East Coast locations, while Asian buyers tended to pursue homes on the West Coast. Demographics were mixed for areas such as Florida and Texas. Texas was a popular buying ground for Mexican buyers, while Florida found interest among South Americans, Europeans, and Canadians.
Leading the way in foreign purchases by country was Canada, followed by China. Canada accounted for 24 percent of international sales while China accounted for 11 percent, up from nine percent in 2011. Mexico was third with eight percent of sales and India and the U.K. both accounted for six percent.
"Foreign buyers recognize that owning a home in the U.S. has many benefits, both financial and social," said Veissi. "Many purchase property as an investment, vacation home, or to diversify their portfolio. In addition, many recent immigrants view homeownership as an important accomplishment. They believe that being a homeowner is one of many ways they become established in the U.S. and attain stability, security, and a sense of community."
These are not all vacation properties, either. Many of the homes purchased were bought as primary residences. 

July 2, 2012 -- Realty Times Feature Article by Carla Hill 

Optimism Returns to Market

According to the latest HomeGain survey, optimism has returned to the market. The 1st quarter National Home Values Survey found that 37 percent of real estate professionals expect to see home values increase. This is up from 15 percent last quarter. 
 
"Real estate professionals have grown more optimistic regarding the direction of home prices, especially in the states that have been hardest hit in the past few years, like Arizona, Nevada and Florida and also in states that have done comparatively well, like Massachusetts and Virginia." said Louis Cammarosano, General Manager of HomeGain.
A quarter of homeowners are feeling the same optimism. Twenty-five percent reported they expect home values to increase as opposed to 15 percent last quarter.
The survey also found that:

• Twenty-two percent of real estate professionals expect home values to decrease in the next six months, down from 42 percent from last quarter.
• Twenty-nine percent of homeowners expect home values to decrease in the next six months, down from 37 percent from last quarter.
• Forty-one percent of real estate professionals and 46 percent of homeowners believe home values will stay the same in the next six months.
• 77 percent of homeowners believe their homes are worth more than the recommended agent listing price.
• Likewise, 62 percent of home buyers believe homes are overpriced.

Things got political in the 1st quarter survey with over half (52 %) of agent and brokers indicating they "strongly disapproved" and "somewhat disapproved" (14%) of Barack Obama's performance as President, earning him a 66 percent disapproval rating, an increase of two percent in the disapproval rating of agents and brokers surveyed in the first quarter of 2011. 
 
This rating was down 4 percent, however, from the fourth quarter of 2011 when the President had a 70 percent disapproval rating among agents and brokers. 
 
For homeowners, the disapproval rate had fallen as well from the 4th quarter of last year. The survey found that "forty-one percent of homeowners "strongly disapproved" and 15 percent "somewhat disapproved" of the President's performance, earning him a 56 percent disapproval rating. The President had a 60 percent disapproval rating last quarter among surveyed. 

May 31, 2012 -- Realty Times Feature Article by Carla Hill 

Vacation Home Market

Are you in the market to buy a vacation home? If so, you're not alone. There is a ripe and ready segment of today's market that is geared up for taking advantage of today's favorable buying conditions. 
 
According to the latest National Association of Realtors Investment and Vacation Home Buyers Survey, vacation-home sales rose 7.0 percent in 2011. Investment property purchases were up a staggering 64.5 percent. Many of these were distressed properties being sold at steep discounts.
In comparison to the total sales, vacation-homes were 11 percent of all transactions for 2011, up a healthy 10 percent in 2010. 
 
NAR Chief Economist Lawrence Yun said investors with cash took advantage of market conditions in 2011. "During the past year investors have been swooping into the market to take advantage of bargain home prices," he said. "Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property." 
 
These investment buyers are pulling out the cash as they look into buying these rental properties. Forty-nine percent of investment buyers paid cash in 2011. Forty-two percent of vacation-home buyers did the same.
"Clearly we're looking at investors with financial resources who see real estate as a good investment and who aren't hesitant to use cash," Yun said. "Of buyers who financed their purchase with a mortgage, large downpayments were typical. The median downpayment for both investment- and vacation-home buyers in 2011 was 27 percent." 
 
What types of buyers are scooping up today's vacation homes? The NAR survey said lifestyle factors are the leading motivator. These homes are more likely found in suburban and rural areas.
The median vacation-home price was down 19.1 percent from 2010 to $121,300. The NAR reports, "The typical vacation-home buyer was 50 years old, had a median household income of $88,600 and purchased a property that was a median distance of 305 miles from the primary residence; 35 percent of vacation homes were within 100 miles and 37 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years." 
 
Additionally, 16 percent of vacation buyers bought the property for a family member (such as a child going attending school), friend, or relative to use. 
 
Regionally, 42 percent of vacation home were purchased in the South, 30 percent in the West, 15 percent in the Northeast, and 12 percent in the Midwest. 

Realty Times Feature Article by Carla Hill 

Things You Should Know Before Buying a Luxury Home

Luxury New Market Realities

1. It's a great time to buy - really! Compared to real estate overall, the high end has seen a resurgence in sales but there is still no shortage of excellent buying opportunities. Equally desirable are interest rates, which even for jumbo loans are exceptionally low.
2. Trading up? Sell low, buy even lower. Even if you have to sell your current home for less than you want, chances are you still come out ahead. "Once you find out what a good deal you might get on your purchase, that big discount on your existing house will be much easier to stomach, " says Paul Boomsma, president of Luxury Portfolio International. Factor in ultra-low interest rates and the prospect of selling low becomes even more palatable.
3. Don't be surprised to discover you are not the only buyer in the marketplace. The opportunity to own a fabulous home for a fraction of the cost of only a few years ago continues to entice consumers worldwide; interest from international buyers in U.S. real estate has never been higher.
4. Multiple offers still happen. Even though there are a large number of homes for sale, really good inventory gets noticed. "When a property is done and priced at the market, it will definitely attract multiple offers and that's very surprising to buyers," says Betty Graham, president of the Coldwell Banker Previews International division for NRT.
5. Not all sellers are desperate. "Distressed sales are part of the market but they are not the whole market," observes Mark Nash, a Coldwell Banker Residential Brokerage agent in Chicago and author of "1,001 Tips for Buying and Selling a Home."
6. Taking a hard line in negotiations isn't always the best strategy; sometimes patience brings a better pay-off. It is important to "give buyers enough time so they will thoughtfully consider your offer," says Graham.
7. Cash is king. One of the biggest changes in the last five years is that more luxury buyers are opting for a cash deal. The motivation is not a lack of available loans; rather, luxury buyers understand they often can negotiate a better deal using cash, observes Joyce Rey, executive director of Coldwell Banker Previews International. "If there are fewer contingencies, then sellers are more likely to accept a lower price."
8. Don't worry if it's a buyer market or a sellers marketing; instead focus on getting a handle on what's happening today in your target location and price range.

Source: Unique Homes by Camilla McLaughlin

Pros and Cons of Owning a Home in a Historic District

Buying a home within a local, state or national historic district most likely means you’re buying into a fascinating neighborhood with important history behind it. But along with the great past of your new home, there are all sorts of opportunities as well as important considerations to keep in mind.

Understand the Limits

Check with your real estate agent or local city government to understand what you can or can’t do to your home. Some cities have specific permits or building codes for historic districts that cover such areas: potential add-ons, types of windows allowed or various other exterior improvements on a historic home.

Take Advantage of the Savings

Many districts have tax incentives available for those that rehabilitate their home using approved standards. Some of these incentives have fairly distinct time requirements so check out all the rules in advance to maximize the possibilities.

Research Your Home

Most local libraries have a wealth of information on historic homes. Finding original photos of your home not only will impress your guests, but can also help you assess potential improvements to match up your home to its original look and feel.

You’ll Be Surprised

Whether you like to do it yourself or have others help you, odds are you’ll find something unexpected when you take on a home improvement project. Often, new homeowners of historic homes find things ranging from beautiful wainscoting behind wallboards or original woodwork sandwiched in between studs, behind a wall. The general rule is if you find it — make use of it!

Take a look at some of the Historic Homes Prudential Montana Real Estate has listed: http://www.finehomesmt.com/property/fineHomes/Montana/historic-homes/

September 26, 2011

Author:Mitch Robinson
http://www.zillow.com/blog/2011-09-26/pros-and-cons-of-owning-a-home-in-a-historic-district/

The Power of the Bobcat Spirit

The Montana State University Bobcats are well-known throughout the beautiful state of Montana as well as the entire western region. The football rivalry between the MSU Bobcats and the University of Missoula’s Grizzlies is one of fame and fanatical proportions, especially to those who hold Bozeman or Missoula close to heart. For Bozeman and the surrounding Gallatin Valley area, the roar of autumn games and the community spirit that is experienced at the football stadium brings families, friends and colleagues together in camaraderie at its finest.

For years, the Bobcat Stadium has been bursting at its seams in an attempt to house all the cheers and energy the Bozeman fans exude. In May of 2008, in reaction to the obvious need for expansion, MSU’s Athletic Department revealed plans to enlarge the stadium over the next twenty years, a master plan totaling around $100 million. The “design team is comprised of a lot of MSU graduates,” stated Jim Bos, owner of the project’s creative company A & E Architects and a Montana State University alumnus. That the stadium expansion was designed by MSU alumni gives the whole football project a sense of passion. Everyone involved truly cares about the project and its success.

Now in 2011, the project has been underway for around three years, with the End Zone Expansion on track. The construction team broke ground in January of this year, with over one hundred people and fans attending the End Zone Ceremony. MSU President Waded Cruzado spoke, while other honorary players and fans stood close by, including legendary player Sonny Holland. The End Zone Expansion is clearly a community-induced effort to expand both the stadium and the hearts of the fans within the community. Those present took up the gold-painted shovels, complete with blue and white bows, and dug into a new beginning for Montana State University’s Bobcat Football.

With the expansion of the end zone, due to be completed by the first home game on September 10, 2011, around 5,000 additional seats will be available, as well as an entirely new scoreboard. The effort is representative of not only more seats for fans, but the way this Bozeman community can come together in order to reach a shared vision. The End Zone Expansion project itself is set to cost around $10 million, all of which was donated and raised by those in the community that care about its completion. In no other way can it be described but that Bozeman is passionate about its community spirit and has pride for its hometown Bobcats.

To learn more about the stadium expansion and purchase season tickets, visit: http://www.msubobcatstadium.com


Posted by:
Carla Dingman

Broker, CRS, GRI, ABR

2001 Stadium Drive, Ste. A

Bozeman, MT 59715

Phone:(406) 556-2258

Cell:(406) 570-9199

carla.dingman@prumt.com

What Makes Bozeman Special

Community, outreach, involvement, giving back; these are words that strike a chord with those of Bozeman, Montana and fully exemplify the spirit of this vibrant community. This is not only apparent with the countless non-profit and volunteer organizations as well as resident involvement around town; it is printed in almost every newspaper Bozeman has to offer.
One recent newspaper headline included “There’s One Team. We’re All On It.” The 2011 Special Olympics Montana State Summer Games were held this past May in Bozeman, enveloping the area with even more heart and togetherness as volunteers (including Prudential Montana Real Estate) and sponsors engaged themselves in the program to Live a Little Louder. This consistent and inspiring theme for the Games applied to those amazing athletes participating from all over the state, as well as those there for support.

With over 1,000 athletes and 2,600 volunteers absorbing themselves in the Games, there were around four thousand people soaking up every ounce of humanity, celebration and hope the Special Olympics inevitably emanates. By closely and personally participating in the volunteer work supporting the Games, I know how magical and contagious the smiles on those athletes’ faces are and how that happiness is able to spread throughout Bozeman. Prudential Montana Real Estate’s ability to be involved is both a pleasure and a chance to cohesively work side-by-side in promoting that community bond that Bozeman embraces. As John Parkes, the Special Olympics’ Honorary Games Chairman stated, “Special Olympics is the inspiration to believe in a more hopeful world – not just during this week but every day of the year. Because of Special Olympics, [Bozeman is] living a lot louder.”

Posted by:

Heidi Parkes

Broker/CRS

Prudential Montana Real Estate

2001 Stadium Drive, Ste. A

Bozeman, MT 59715

heidi.parkes@prumt.com

cell: 406-539-0222

CASH SALES ON THE INCREASE

Both nationally and locally real estate brokers have noticed an increase in the number of cash transactions.

For example, between January 1, 2010 and late March 2011 of 166 transactions in Big Sky, 72 or 43 percent have closed with cash. According to a recent article in the San Francisco Examiner in January 2011, 28.7 percent of the sales closed with cash. Also in January, 2011, 46 percent of real estate transactions in Toledo, Ohio were cash sales. The MLS of Central Oregon that tracks sales in the Bend, Oregon area noted that 32 percent of the sales in February were cash transactions.

The National Association of Realtors noted that 54.2 percent of the sales in Miami, 45.9 percent in Las Vegas, 44.9 percent in Tampa and 35.6 percent of the sales in Phoenix were cash transactions. These four cities were all hit pretty hard by the recent recession and prices were dramatically reduced due to numerous foreclosures and short sales.

While there are a number of reasons for this increase in cash sales, such as foreign investment, cashing out equity in other properties or investments or using cash and a quick close as a negotiation strategy, there is also another potential reason: the return of the investment buyer.

Investment buyers look for opportunity; the combination of motivated sellers, short sales and foreclosures combined with a lot of inventory creates an almost ideal situation for those investment minded buyers. This also could be a signal that many buyers believe that we are close or at the bottom of the market. Already in Big Sky we are seeing significant market absorption in certain areas and price ranges.

Posted by

Don Pilotte, Broker, GRI, RRS

Big Sky Office
55 Lone Peak Drive
Suite 3
Big Sky MT 59716
don.pilotte@prumt.com
cell: 406-580-0155

SECOND HOME DEMAND INCREASES

According to a recent article in the Wall Street Journal the market for vacation homes appears to be increasing. This is also supported by the 2010 National Association of Realtors Investment and Vacation Home Buyers Survey where one in ten home buyers purchased a vacation home in the previous year. Sales in Big Sky and the Bozeman area also support an increased interest in investment and second homes.

Interestingly in most markets where demand has improved, prices have not increased. A broker in Hilton Head, S.C., noted that many buyers are purchasing the low end of the market and in New York’s Hamptons area another broker noted that sellers have become aware that homes have to be well priced to sell. The Hampton market has increased because the prices are now mostly where they should be, according to the broker. Data from the Southwest Montana MLS supports those trends in this part of the state.

The sales data below represents sales in the Big Sky area. The data from 2011 represents closed transactions between January 1, 2011 and March 27, 2011. In addition to the closed volume noted below for 2011, there is currently another $12,263,900 in pending transactions combining to total almost $30 million in sales during the first three months of 2011.

YEAR MEDIAN SALES PRICE & DOM VOLUME SALES

2011 $368,201 105 $17,683,201 39

2010 $350,000 101 $70,998,176 139

2009 $350,000 165 $53,789,868 93

2008 $615,000 210 $92,236,284 89

2007 $687,500 163 $120,655,988 118

The average sales price decreased from 2007 through 2010, but in 2011 the average sales price increased due to several sales near the very top end of the listed homes in Big Sky.

YEAR AVERAGE SALES PRICE

2011 $769,230

2010 $510,778

2009 $578,385

2008 $1,036,362

2007 $1,022,508

 

Posted by

Don Pilotte, Broker, GRI, RRS

Prudential Montana Real Estate

Big Sky Office- Town Center

55 Lone Peak Drive Ste. 3

Big Sky MT 59716

cell: 406-995-4060

email: don.pilotte@prumt.com

Oh, The Times, They Are a-Changin‘ ...

For the past two years, what exactly the phrase “there’s a light at the end of the tunnel” was meant to convey was wide open for interpretation. So often recited by the news media, pundits and economists, the phase conjured up different meanings for different people....often different meanings to the same people at different times of the day. Some saw the “light” as heralding the swift end to the current “recession”...for others the “light” signified the locomotive beam of a train which was not bound for glory... rather the unavoidable demise of our civilization as we know it and like to think of it. And others thought they had slept through their stop and were heading for the maintenance yard.
But, The Times, They Are a-Changin‘ : perhaps its not an immediate return to the salad days of the previous mid-decade, when an upward trajectory of values seemed both an entitlement and inevitability...but the specter of masses of Dr. Zhivagos and Laras surviving a bleak future by foraging for furniture and wood on the streets to burn for warmth has quietly morphed into better corporate earnings reports, stock market rallies, modest job growth and even the odd account of real estate sale stability in New York. Of course, these more optimistic sentiments are tempered by the looming Federal deficit, foreclosure overhang, skyrocketing price of copper and continued de-leveraging of a large swath of the economy. There’s a sword of Damocles around every corner. Yet, even coverage of the current turmoil in Cairo, while rightly a front page story, seems to be more balanced and less hysterical than it might have been 18 months ago. Looking either forward or backwards has some uses, most often to remind us that there is “no time like the present.”

So, what does all of this have to do with the State of the Real Estate Market in Big Sky? Well, it may be down, but its not out. In fact, its showing real signs of life. As explained in the intro classes of Econ 101, when demand increases, prices adjust upwards until ultimately demand slows which then puts pressure on pricing to decrease, and, with luck, revives market demand. A really scary scenario would be that prices continue to decline and no one comes to the party...and the result would be “economic obsolescence” and a “ghost town” (by the way, there are a few nearby well worth visiting on a nice summers day) or, like when the grocer waits too long to mark down the brown bananas and the fruit flies begin to swarm and banana bread is not even an alternative.

Happily, market activity in Big Sky is reviving: while not exactly vibrant, there are 21 transactions pending and 6 properties closed in January of 2011. The Big Sky demand rush had been so pronounced a few years ago and the market and expectations got way ahead of themselves...all that talk about Big Sky becoming the next Vail! (While Vail is a popular, if somewhat overcrowded and yet quaint ski resort in Colorado, its setting, overlooking the stunning I-70 corridor is rather unfavorable, so it’s unfair to compare Vail to Big Sky...).

Pricing adjustments are still somewhat in flux...with some pricing facing further pressure, while other properties (that old “location, location, location” thing) showing more resilience. The properties that were sold or are now “pending” run the gamut...from studio condos to vacant lots, from a Moonlight Chalet to single family Meadow home. But the range has narrowed considerably, and for Sellers and Buyers with a realistic expectation of selling or buying, that light at the end of the tunnel is less relevant. So, while the future is uncertain, and the past, well at least the recent past, should be all but forgotten, when you look over the alternatives, this is a pretty special place in the here and now.

By Eric Ossorio, Broker
Prudential Montana Real Estate
Big Sky Office
55 Lone Peak Drive Ste. 3
Big Sky MT
59716
eric.ossorio@prumt.com
406-995-4060