Billings Real Estate – Billings Area Real Estate and COVID 19
By Lowell Cooke, Broker Associate, Coldwell Banker The Brokers
WOW! That is all I can say about the Billings area real estate market statistics provided by the Billings MLS (Multiple Listing Service). Stats are showing it is undoubtedly a “Sellers” market, right now.
The statistics cover the Billings and surrounding areas, including Roundup, Hardin, Red Lodge as far south as Belfry. If you have not heard, there is a lack of inventory causing prices to go up and creating multiple and sometimes, frankly, insane offers over asking price.
Supply and Demand (or Months’ Supply)
A little background, a real estate market is considered “in balance” when there is a 6-month supply of homes. This means if there are 600 homes on the market and there were 100 sales during that month, there is a 6-month supply (600/100=6).
A “Buyers” market is characterized by the months supply exceeding 6 months and a “Sellers’ market where there is less than a 6-month supply. For the last several years, our months supply has been in the 4-5-month range-very close to being in balance, or a stable market.
Covid 19 has made a dramatic difference in the “in balance” supply of homes. While the market was trending towards a sellers’ market earlier this year, by June we saw our first month supply below 2 months and it has continued to drop. The November supply of homes was 1.27 months.
#Closed Sales, #Listings Taken, Closed $Volume, Average Sales Price
There have been 6.2% fewer listings taken through November of this year compared to 2019 while the number of closed sales increased by 12.3%. Fewer listings taken, with a record number of sales equals low inventory and increased prices. The closed $ volume has increased an incredible 21.5% with the YTD Average Sales Price increasing from $268,189 to $290,117 for $21,928 or an 8.1% increase. This compares to about a 4% increase in prices in November 2019 compared to 2018.
Sell, Buy, Hold?
Now that your head is throbbing from all these numbers, what does it mean to sellers and buyers? The old saying “buy low, sell high” is definitely favoring sellers. As a seller, the next few months should be a good time to sell as it may be a few months before our market begins to see some stabilization with the introduction of the Covid 19 vaccine. Sales price increases will most likely begin to flatten out as more sellers decide to sell. The problem now, is, if you do sell, as a buyer, you may not be able to find a place to move to. As a buyer, you will still be competing for limited inventory. Finding a place to rent, while storing your households might be an option.
Good news is, as a buyer, you will be able to take advantage of low interest rates, which all indications seem to say will remain historically low. Now you are thinking, “he’s a real estate agent, he wants you to buy and sell.” Well of course I do, but as far as the consumer is concerned, home ownership is one of the most cherished aspects of life. It provides us with more than a return on our investment, it is a place to live, improve and enjoy. Consider that when you are deciding what is right for you.
Lowell Cooke is a Broker Associate with Coldwell Banker The Brokers in Billings. He may be contacted at 406-661-5140 or Lowell@CBtheBrokers.com