Despite many recent articles about declining national real estate markets with the “sell now before you can’t afford too” opinion; here in Helena, Montana we are still experiencing appreciation in our real estate market. An article from Zillow.com on February 8, 2007 stated that “… despite a surge in values in many regions over the past several years, home values are down by –0.48 percent year-over-year, and –4.77 percent quarter-over-quarter.”
Locally, we are still experiencing a surge in values as compared to previous years. In 2006, 1000 properties sold in the Helena, Montana area with an average sales price of $201,927 and an average time on market of 52 days. Our average sales price to list price was 98.5%. As compared to 2005, 1099 properties sold with an average sales price of $175,975 and an average time on market of 51 days. The average sale to list price was 98.2%. This is a 14.75% increase in sales price comparing 2006 to 2005. As comparing Helena, Montana’s quarter-over-quarter data to the national trend, we saw a 5.38% increase from the 4th quarter over the 3rd quarter.
Anytime anyone reads statistics about Average Sales Prices, Average Sales to List Prices, & Days on Market, keep in mind that this is only based on MLS data & does not represent the entire picture. This data eliminates those homes that were sold by owner & kthose homes that went through various price changes prior to finally selling.
What can we learn about Helena Montana Real Estate by looking at this national data is that no community is immune to changing real estate markets’. Historically real estate has been cyclical in nature, cycling between a buyer’s and seller’s market with the times in the middle being changing markets. This national data, however, should not scare people into believing that the real estate bubble has burst. Just as we see from the national reports there are still plenty of hot markets that are still showing double-digit appreciation, such as Yuma, Arizona (25.66% increase), and Myrtle Beach, South Carolina (21.24% increase). But, nationally there are more cold markets that have double-digit depreciation, such as Panama City, Florida (-11.84% decline) & Punta Gorda, FL (9.23% decrease) (from Feb 8th Zillow.com article sited below).
The real estate markets that are most sensitive to depreciating values are those real estate markets that saw huge appreciation over the last few years. This is just normalization of the real estate market in these areas. Here in Helena, we have seen steadier double-digit appreciation year-over-year that has culminated where we are today with an average sales price of $201,927. This does not mean we are immune to depreciating values or a changing market. Just as history has shown us with the cyclical nature of real estate, change is essential to normalize the market. When the local real estate market will change is the question! There are several economic models available that still cannot predict this.
For additional questions about Montana Real Estate contact the Swinney Sells Team at (406)442-3616!
By Ryan Swinney
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