Its turning into a brisk Fall Montana real estate market. Summers, especially in Montana, are a fast and furious rush of spending as much time as possible outdoors recreating. While fall is still a glorious season, the first frosts remind us that it may be time to take care of business, including real estate transactions. Spring is often given the top spot as the busiest selling season when the local home inventories grow and the moving trucks are out in full force. However, fall offers its own unique set of advantages for buyers and sellers alike.
As the calendar year nears the end, it is time to think about taxes, and home ownership is certainly a top notch tax break. Buyers who have been putting off finalizing a purchase can still make it happen before the end of the year and realize at least some tax benefits including any mortgage interest and property taxes that are deductible.
The proportionally lower number of buyers in the fall works well for sellers who do list their home since many homeowners remove their homes from the market to “rest” the listing over the holidays. The buyers are serious this time of year. Think “New Home for the Holidays.” It just has a nice ring to it. Couple this with motivated sellers, especially those with vacant homes that don’t want them sitting there over the winter incurring expenses, and it has all the makings of a win-win real estate transaction.
Our local sales statistics through the end of 3rd quarter support the idea of a frenzy of spring activity leading up to a high number of summer sales (it generally takes 45-60 days from the acceptance of a contract until the actual closing of a property.) However, the fall sales numbers have remained robust especially in the past couple of years. For instance, our Southwest Montana Multiple Listing Service data shows that in 2013 the highest number of single family home sales in Areas 1-4 (Bozeman city limits, Bozeman surrounding area, Belgrade, Manhattan/ Three Forks) was in July at 153 units, as was expected. In 2013, we saw 15% of all residential closings occur in first quarter, 28% in the next three months, with the peak in 3rd quarter at 33%, and 1 out of every 4 sales in the 4th quarter. This year, which has even higher year-to-date sales, seemed to peak again in July with 159 closings. September 2014 topped 2013 by 20 sales, and the pending sales are looking good as well with 176 properties under contract at an average price of $354,308. To truly show the depth of our market’s current strength, we should consider that our market recovery began in 2010. That year, we had 570 sales completed through the end of September versus 970 this year, quite an impressive increase. The highest number of reported sales for an entire year was a tie between 2005 and 2013 with 1187 closed transactions, so this year is on track for a new record high.
Considering the same Areas 1-4 in the condo/ townhouse market, we are making strides as well. Closed sales this year have had high numbers beginning in April, and we are well above last year’s numbers at the end of 3rd quarter with 385 sales versus 332. Closed rates for 2013 showed 12% in Q1, 30% in Q2, peaking at 37% in Q3 and 21% of all closings in the 4th quarter. This market is more impacted by new construction and when finished product can be delivered. Our pending transactions are currently at 106 with an average price of $215,657. The peak number for this category was in 2005 with 653 sales for the year.
Big Sky tells a story in itself. Last month (September 2014), the market experienced 21 single family home sales. This is the largest single month statistic since we have started actively tracking in 2004. The activity level does not seem to be slowing down either with currently 19 pending transactions at an average price of $2,940,668. In fact, our year-to-date numbers through 3rd quarter are higher than any year-end sales figures we have seen. The quarterly activity for 2013 was quite consistent with 24% in Q1, 23% in Q2, 30% in Q3 and 24% in Q4. The condo/ townhouse market in Big Sky is also experiencing positive gains. Sales are right on track with last year, which was the highest reported number of sales since our tracking began in 2004. Through September 2014, there have been 119 closings with 25 pending transactions averaging $414,412. The fourth quarter will tell the tale with last year’s numbers showing 37% of all closing occurred in the last three months of the year.
If you are exploring buying or selling in the next three months, check with your local real estate professional to get the facts. It is always important to look at the specifics for your price range and location. Averages for large areas and all prices don’t always show the entire story. If you are a seller, find out how many real buyers have purchased in your price range during the past year and what is the current mix of “for sale” competition. And if you are a buyer, consider exploring areas and price ranges where there is still more inventory available and perhaps more flexibility in negotiation.