For what its worth...

At times there seems to be too much information thrown at us...and when the reports are contradictory day to day and from news source to news source, making sense of it all can be a challenge. Still, all in all, 2010 was a pretty good year in Big Sky. Once again the Canyon is aglow with a steady stream of headlights during both the morning and late afternoon. Occupancy at the Mountain Village is near capacity, the Yellowstone Club is breaking attendance records and its a good idea to call ahead for a dinner reservation.

The number of pending/closed sales reported in the Big Sky MLS for 2009 topped out at 130, with 118 actual closings (several closings spilled over into 2010) while in 2010 we’re seeing 172 pending/closed MLS sales, with 166 already closed, close to a 40% increase in number of transactions. 2010 closed sales show that 71 properties sold for under $300,000, 42 properties were sold between $300,001 and $500,000, 27 properties were sold between $500,001 and $750,000, 19 properties were sold between $750,001 and $1,500,000 and 6 properties were sold for over $1,500,000, with two of those 6 very close to the $3,000,000 mark, representing $77.7 million in sales, a 18% increase in the value of the market.

Compared with the final tally in 2009 of 118 MLS closings, 50 properties sold for under $300,000, 27 between $300,001 and $500,000, 18 properties between $500,001 and $750,000 and 19 (again) properties between $ 750,001 and $1,500,000 and 4 properties sold for over $1,500,000, with two sales over $4,000,000, representing $65.1 million in sales.

Land sales remained steady from 2009 at 16 parcels, far below the land “boom” year of 2004, which saw 64 sales, yet more in line with 2005 pricing than the price peaks seen in 2006 when 19 properties sold.

The color coded chart below graphically illustrates the increase in the number of sales as well as the relative consistency of the price distribution in various categories (no magic there...just seemed like logical and interesting price points to differentiate between).

Growth in the area has been steady and infrastructure improvements have kept apace, with an added amenity in the Town Center, the Alpine Ice Rink, which is hosting the very first Pavelich Invitational Hockey Game to open the New Year (yes...thats our own Marty Pavelich and Gordie Howe teammate of Detroit Red Wings fame...). The Lone Peak High School has become a solid compliment to the Ophir Elementary and Ophir Middle Schools, providing educational opportunities to over 200 students.

2010 Census Data reports that the population of the USA grew by 9.7% since 2000, keeping pace with the growth of the population of Montana during the same time frame, also increasing by 9.7% to 989,415 residents, while growth in the Western Region grew at a 13.8% pace. During that period, the population increases were most dramatic in the Western portion of the State, with Gallatin County growing by over 30% with a large part of that growth occurring in Bozeman, which saw close to 25% growth.

So many improvements to Highway 191 are now taken for granted, and the airport expansion at Gallatin Filed, from 75,000 square feet in the terminal, to over 200,000 square feet, with more baggage carousels, parking and gates, should be completed by the end of 2011. Gallatin Field saw that 2010 was the busiest year at the airport with a increase of over 10,000 passengers more than the previous busiest year at the airport, 2008. Several additional direct flights to and from Bozeman are in the works, and new overnight facilities for larger planes will help to accommodate increased passenger counts well into the future.

And what about these snow and skiing conditions? Pretty amazing, eh? So we continue to be grateful for small things and the reminders that we’re in a special place. 

By Eric Ossorio

Broker

Prudential Montana Real Estate

55 Lone Peak Drive

Suite 3

Big Sky, Montana 59716

406-995-4060

eric.ossorio@prumt.com

CALLING ALL ANIMAL LOVERS

To characterize Bozeman as an animal friendly community is a huge understatement!  We are so lucky to have a shelter that is truly a template for shelters all over the US:  Heart of the Valley Animal Shelter (“HOV”).

Claire Gillam, HOV Board Member

As a past Board President, I was privileged to spend a lot of time at Heart of the Valley interacting with a talented, dedicated and professional staff and also working closely with an exceptional board to fund raise and make sure our PR and Marketing communications did justice to our amazing shelter.  In addition to the major fund raising event of each year held in June, the Dog Ball, it is important to give back to the community that supports HOV: since 2008, Woofstock has been the day of giving back in September, a day filled with activities and fun for the whole family and their pets.  More than 1,000 people and 3,000 dogs participated in 2010!

Peg Potter, Volunteer

Every animal receives loving care and attention each day and a veritable army of volunteers receives training specifically adapted to cats and dogs before they begin handling the animals.  A full- time veterinarian and assistant are available in a state of the art hospital on the premises.  A 15 acre off lease park is open to the public 7 days a week and only closed at certain hours to allow the shelter canines to stretch their legs.  The community room is also open to the public for children’s and pet’s birthday parties and the summer day camp for children 6-12 has become a must do for Bozeman’s youngsters from June-August.

Please check out Heart of the Valley’s web site at www.heartofthevalleyshelter.org and feel free to call Kathryn Hohmann, Development Director or Kari Chiocchi, Volunteer & Education Manager at 388 9399 to arrange to tour the facility.  But be warned, you will lose your heart to one of the many cats or dogs looking for their forever home!

Written by Nancy Palmer, Past HOV Board President

The answer is YES

The answer is YES.


By the time you are reading this we will probably not know a whole lot more about where the real estate market is heading than we did back in the late summer, but we’ll look for some clues by reviewing where we’ve been. The market has been trolling for a bottom for, well, lets just say for what seems like a very long time now. Clearly, the “highs” of the 2005-2006 market era retreated dramatically as the false sense of absorption and demand that a surge of speculative acquisition brought into being gave way to more need based purchases and a corresponding drop in volume.

Still, while looking in the rear view mirror is not a great way to predict what lies ahead, reviewing the past can shed some light on our journey. Looking back into 2004, there were 212 MLS reported transaction in the Big Sky and Canyon markets. While MLS had been introduced to the Big Sky area in 2003, I’m going to discount it as a unreliable metric due to its uneven use by the local real estate community at that time. By 2004, the use of MLS information was more universal and representative, resulting in sales of 212 properties in all categories: homes, condos, town-homes, small and larger lots. Anything on MLS (Multiple Listing Service). 2005 saw absorption of 207 properties in our market. Interest rates were low and lender underwriting standards were, well, a work in progress. Several projects came on line: land subdivisions, condos and a raft of speculative houses, yet by 2006, the year many consider the “peak” of the bubble and certainly a year in which there were some astounding and escalating price points, MLS closings dropped to 178 units, then 140 units in 2007 (the year that the “recession” officially began...). By 2008, a year that saw the complete upending of the American financial system, the closing of Lehman Brothers and coining of the satirical and caustic phrase “Too Big To Fail”, there was a slight decline in absorption to 121 closings reported on MLS and speculative building had all but ceased. Not many shovels were going into the ground. Inasmuch as the financial meltdown occurred closer to the 4th quarter of 2008, closings during the first 6 month of 2008 ran at more than double the pace than during the final 6 months and led into 2009 which saw another slight decline by 4 closings, with absorption of 117 units. It certainly did feel like 2009 was a slow year.

So, what’s happened thus far in 2010? Year to date (January 1, 2010 to November 15th, 2010) the market absorbed 151 properties, a full 20% jump in units closed on MLS over fiscal 2009, with 6 weeks left to go in 2010. What appears int the rear view mirror is the decline from 2004 into the valley of 2009 and the increase in absorption in 2010, topped off with a legendary snowfall this November.

MLS may offer an imperfect metric, and the underlaying layers of data and values should be reviewed for pertinence to a particular market layer, but its clear that any question of the resiliency of the Big Sky market would be answered with a resounding “yes”.

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

FINE HOME MARKETS IN SOUTH WEST MONTANA

The fine home market in Southwestern Montana is recovering, with the local MLS reporting a slight increase in the number of sales and volume for 2010, yet this volume is still much lower than 2007.


The Average Sale Price for the fine home market, in our area, has remained relatively stable in the past four years; perhaps more stable than almost any other segment of the area’s real estate market. The Days on Market have increased since 2007 and remain much higher also indicating a continued slow market.

YEAR AVERAGE SALE PRICE DAYS ON MARKET

2007 $1,493,765 171

2008 $1,641,525 260

2009 $1,639,633 296

2010 $1,444,898 310

The sales volume decreased dramatically in 2009, but we are seeing a slight increase in the volume and number of transactions in 2010.

YEAR TOTAL SALES VOLUME # OF TRANSACTIONS

2007 $164,314,206 110

2008 $142,812,745 87

2009 $59,026,803 36

2010 $65,020,450 51

While conducting a survey of people whose incomes are greater than $306,000.00 per year and are buyers, United Marketing found that the percentage of those people planning to buy homes rose from 3% in 2008 to 11% currently.

The CEO of the Institute for Luxury Home Marketing, Laurie Moore-Moore, said that while the luxury market is not booming, she is seeing sellers who are more realistic about prices and that are influencing buyers.

“After waiting in the wings, many affluent buyers spent the summer shopping for value and snapping up trophy properties” according to Moore-Moore.

Also helping this portion of the real estate market is the return of jumbo mortgages. These loans are more available than in the past two years as many small and regional banks are offering them once again. Jumbo lending increased 30% in the second quarter of the year when compared to the first quarter.

For the first six months of this year Wells Fargo jumbo lending is up 47.5%, while J.P. Morgan Chase’s jumbos have increased by 146%.

Still, qualifying for these larger loans will be strict. Down payments will range between 20 to 40%, excellent credit scores are mandatory and verification of income is necessary.
 

By Don Pilotte
Broker, GRI, RRS
Big Sky, Montana

55 Lone Peak Dr, Ste. 3
Big Sky, Montana 59716
Cell: 406-580-0155
Office:406-995-4060

BOZEMAN – A COMMUNITY BLENDING TRADITIONS OF THE OLD WEST & BIG CITY SOPHISTICATION

Many clients looking for the perfect luxury second home, ranch or recreational property take months to preview and get to know an area before buying – after all, the investment is considerable and the decision often based on how much use a property will get.

Bozeman often trumps other locations, primarily luxury resorts, for the following reasons:

· The community spirit of giving back and caring about others.
· The easy access to a large variety of year ‘round outdoor activities – voted the top ski town in the US by Powder Magazine
· Outstanding university and K-12 schools
· The quality of life factor – where people work and play hard
· A strong, cutting edge agricultural tradition and dedication to raising the best – whether cattle, sheep or the versatile American Quarter Horse
· The Museum of the Rockies, affiliated with the Smithsonian in Washington, DC
· A Children’s, Computer and Pioneer Museums and Emerson Cultural Center
· A wealth of art galleries and talented local artists
· Local authors with national recognition
· A large selection of restaurants offering traditional American and International cuisine
· A symphony orchestra, ballet school and Inter-Mountain opera in collaboration with the Metropolitan Opera in New York City
· Volunteer board opportunities for many locally based non-profits

Even today, Montanans continue to exemplify the pioneer tradition of welcoming new comers and reaching out whenever help is needed.

Bozeman’s vibrant main street is the heart beat and soul of a very special Last Best Place.

So please take the time to stop for coffee and stroll – whether you are a resident or thinking about buying property here!

By Nancy Palmer, Sales Associate

Prudential Montana Real Estate

2001 Stadium Drive, Ste. A
Bozeman, MT 59715

cell: (406) 539-7324

nancy.palmer@prumt.com

Big Sky: You’re Welcome!

It’s early in June when the Montana Department of Transportation begins to repave and chip seal MT 64 (the Spur Road). Despite the fact that it’s still soggy and overcast, and winter is very slow in releasing its grip to summer, bright yellow Knife River trucks and equipment seem to suddenly appear everywhere at once. Flaggers with bright neon safety vests take up positions along side the road to alert drivers of the roadwork ahead. In the early morning they clutch thermoses and stomp their feet to ward off the chill. Elk are gathered in the open areas barley visible from the road where they bedded the night before, whisps of mist evaporating as the day warms. Its characteristic of Montana Mountain spring weather: a ceremonial display of nature lurching from one season into the next.

It’s a perfect backdrop for the “Spring Cleaning” underway.

The delays and improvements along Highway 191, while now very much appreciated, have now faded into the past, and soon it’ll be “Showtime” in Big Sky: the vestiges of snow melted away, with grasses and glacier lilies having taken over the landscape. By the end of June and early July, fewer road crews will visible on the Spur Road as they shift their focus to other arterials….until the chip sealing begins….Traffic began to pick up just in time to miss the longest delays. By early July RV campers and trailers with exotic names like Scamp and Wildcat (who makes these names up?) slowly will have replaced the heavy equipment, now set up along another roadway.

The Gallatin River is raging, summer events calendar is filling up, and warm sunny days are here. Attendance at Yellowstone National Park set an all time record in 2009, with 3.3 million visitors. When the park opened up to vehicle traffic on April 16th it looked as if summer of 2010 was shaping up to be a very popular summer destination again. Apparently, some of those visitors are coming back, and others found their way to Big Sky.

What a difference a year makes.

Since the dark days of early 2009, 173 MLS properties closed in Big Sky, with prices ranging from $53,000 on the low end to over $5,000,0000 on the high end. 80 of those properties closed in the first half of 2010 and there are currently 21 “pending” sales in the chute, and its only June…so something is going on. That’s not to say that we have a new bubble forming, but buyers continue chipping away at the inventory as pricing adjusts to market expectations. Some buyers are even finding that properties that seemed like a good buy back in February have sold or owners, who are less distraught over the future, have withdrawn listing. There are now 397 properties listed for sale in the Big Sky area, down over 30% (mirroring the stock market, eh?), a considerable reduction from a year ago when there were over 625 properties available at any one time, though it did seem as if there were more. There is only one (1) SSPBA (short sale pending bank approval). Unfortunately, there are still a few properties that are in other stages of distress, however. Using a silly absorption formula, if another 80 properties close in 2010, for a total of 160 sales, then there are 2 years and 4 months of inventory remaining.
Of course, we’re not shutting the doors. At least not quite yet. But the tide doesn’t seem to be rushing out quite as quickly or with such conviction. The adjustments have been painful, to be sure. And there may be more in the way of adjustments to come. But we can be and are grateful for the natural beauty surrounding Big Sky that no CDO, CDS or toxic mortgage can take away. And for that we say: “Thank you.”

And if you listen closely you’ll hear the whispering aspens say: You’re Welcome!

By Eric Ossorio
Broker
Prudential Montana Real Estate
55 Lone Peak Drive Ste. 3
Big Sky MT 59716
Eric.ossorio@prumt.com
p. 406-995-4040

Jumbo Home Loans

The jumbo loan market seems to be opening up a bit, based on several recent articles and recent lending trends.

According to an interview with Vijay Lala of Bank of America Home Loans, in 2009 the larger national lenders like BofA began making more jumbo loans. These large lenders were the only ones with the financial strength to hold the loans. Small lenders without the ability to securitize jumbo mortgages, or unable to hold loans in their portfolios could not get into the market.

However that seems to be changing, as the securities market for jumbo loans is coming back. Based on a recent article in the Washington Post, Redwood Trust, in a SEC filing, said it would sell $222 million in securities backed by pools of jumbo mortgages. The article stated that the average balance would be $933,000.00. These would be the first securities issued since the market collapsed.

If Redwood Trust is successful in attracting investors, lenders in other national banks should begin to consider also making jumbo loans, providing more completion.

Jumbo loan rates are currently about 6% and are down from about 8% during the top of the mortgage crisis. Lenders are currently requiring at least 20 percent down and approval times can be lengthy.

This trend is good news for our Big Sky and Bozeman markets as we have quite a few properties that require jumbo loans. Combined with the excellent values and large selection currently available in our markets, buyers have a wonderful window of opportunity to acquire a tremendous property at an adjusted price.

For example, the Southwest Montana Listing Service currently is showing 145 properties listed in Areas 1 and 2 (Bozeman area) that are priced above $700,000.00 and 84 homes in Big Sky priced above $1M; a great selection from which to choose a new fine home! In conducting a search of sold properties for 2009 the MLS shows that 10 fine home properties in Big Sky and 23 in Bozeman closed during 2009. This compares to the first quarter of 2010 where 9 homes in Big Sky and 18 in Bozeman are closed or are pending during only the first quarter of 2010. Clearly the higher end market is beginning to pick up some momentum once again.

Posted by
Don Pilotte, Broker, GRI, RRS
Prudential Montana Real Estate
Big Sky Office
55 Lone Peak Dr, Ste. 3
Big Sky, Montana 59716
cell:(406) 580-0155
direct:(406) 995-4060
email:don.pilotte@prumt.com