Billings housing market pulling out of winter doldrums
Billings, Mont., is moving into spring with a strong real estate market.
Home sales are up over last year, and inventory is down. Adding to the trend, homes that do go on the market now are selling faster than they were a year ago. Sellers aren't sure what's causing the uptick, but they're encouraged by what they're seeing.
"It's good news," said Patti Dundas, president of the Billings Association of Realtors. "We are in a good place."
For the first three and a half months of 2017 in the Billings market 390 homes sold for an average price of $236,191. The average time for a house to move from listed for sale to sold was 84 days.
Compare that to this year. From January to mid-March, 433 homes sold in the Billings market at an average price of $250,330. The average time for a home now to move from listed to sold is 69 days.
It's not a huge jump, but it's a significant enough increase over last spring that most Realtors are encouraged by the numbers.
"I'm hopeful," Dundas said. "I think we've had a good start to the year."
Less clear is what makes this year different from last year. The economy is roughly in the same place, and both 2017 and 2018 saw the year start with above-average snowfall and bitter-cold temperatures.
Weather often acts as a huge factor in home sales, Dundas said.
She talked about listing a house in December and having trouble getting people even to look at it. She pulled it off the market the same month and then relisted again last month. The house closed in days.
Dundas laughed, acknowledging that sometimes it's hard to figure out the whims of home sales.
It's not just improvements from spring 2017 to spring 2018 that have caught the attention of experts. Month-to-month data also points to a good 2018 for Billings real estate.
February numbers released by Remax show an increase in the rate of closings and growth in home prices.
"The primary story for Billings is the drastic increase in closed transactions since last year," a Remax spokeswoman said.
February had 156 homes close, a 14.7% increase over January and a 59.1% jump over February 2017. The median sales price for a Billings home was $223,950, a 1.84% increase from January and a 5.07% increase from February 2017.
The inventory of houses for sale is a factor. Currently Billings has 485 active listings, which is down about 5% from last year at this time, Dundas said.
Low inventory often will drive down home sales in an area, simply because there are fewer houses to buy.
"The lack of homes for sale continues to be the key factor" nationwide in declining home sales, said the Remax spokeswoman.
However, it also means quick sales and record prices, she said.
But that nationwide decline in home sales hasn't affected Billings. The 5% decrease here in homes on the market for some reason has not impacted sales. Rather, home sales have increased.
"We're kind of not reflecting what's seen on a national level," said Kim Welzenbach, CEO of the Billings Home Builders Association.
Dundas wondered if the decreased inventory in this case actually is the cause for the higher rate of home sales.
"I think it's because the inventory is so low," she said.
Billings has a robust rental market right now, and as rental rates increase, more people consider getting into a home, she said. Like home sales, rentals also are impacted by low housing inventory. Fewer places to rent usually means landlords charge higher rents, which then pushes people to look at buying a house.
"They say, 'Let's put our money towards a home,'" Dundas said.
Billings is also bucking the trend in the nationwide decline of home remodels and a decline in new construction of multi-family dwellings. In Billings over the past year more people are remodeling, and contractors are building more multifamily residences.
Welzenbach believes the math is relatively straightforward. A tight rental market creates a demand for more rentals. Younger families, who have continued to move into Billings, are looking for those cheaper rentals until they can move into a home.
She anticipates a lot of new construction this year, "but it's not going to be anything huge," Welzenbach said.
Contractors will rush this month and next to get their permits from the city as the weather turns and then the building will even out by the end of the year.
The West End remains the more active for new home starts, but Welzenbach said growth will start to spread east and south as lots on the west side of town get more expensive.
Still, 2018 should be an active year.
"I'm looking forward to having a really good year," Dundas said.