Billings Real Estate – 2020 Billings Real Estate in Review
By Lowell Cooke, Coldwell Banker The Brokers
Despite Covid 19, Billings real estate can be summed up as a year of broken records:
Highest average sales price: $291,505
Most # of homes sold: 3397
Total $ volume closed: Almost a Billion! $990,242,756, shattering 2019’s record year by
$181 million, over 22%.
(Billings MLS statistics encompasses a large area and actual Billings areas account for approximately 70% of these numbers.)
Declining Number of Homes For Sale Continues
The December home inventory slid to a historically low level of 295 homes on the market. This compares to an average of around 800 homes for years 2017-2019, or about 60% fewer homes on the market. As of January 13, 2021, there were 156 single family homes for sale in the Billings market. (Not including surrounding areas.) Covid 19 seems to still be affecting this low inventory.
Sales Outpace Listings
The limited number of homes on the market can also be attributed to a greater number of homes being sold verses the number of homes being listed. The last four months of 2020 accounted for 1250 homes being sold compared to 1018 being listed. This means the existing inventory was getting sold. With fewer homes coming on the market, the “seasoned” or overpriced homes most likely saw price reductions which resulted in sales.
Low Inventory-Higher Average Sales Prices
As mentioned earlier, the year over year average sales price in 2020 was $291,505. This was an incredible increase of over $24,000 in one year, or a 9% increase in average value. Our office, Coldwell Banker the Brokers, does its own inhouse statistics of just the Billings area and the median sales price in December 2020 was $263,000 compared to $247,700 in 2019. This is slightly above 6% for the median sales price in 2019.
Sales Distribution By Sales Price Range
The Coldwell Banker the Brokers inhouse “Current Market Trends,” shows 58% of Billings sales in 2020 were between $176,000-$325,000, with the largest percentage of sales between $226k-$275,000, making up 23%. The chart shows the sales distribution by price range. Interestingly, there were 79 homes sold over $600,000. Billings current “months supply of homes” is just over one month. A market supply is “in balance” when the months supply is six months. Below six months indicates a “sellers” market and above six months tends to be a “buyers’ market. Consequently, overall, Billings is definitely in a sellers’ market, unless you are in the $700,000+ range, where the “months supply” is eight months.
New Single-Family Construction On the Rise?
2020 residential building permits in Billings (those serviced by Billings City Services, not subdivisions with their own private water or sewage systems) surged 26% from 2019 and was the highest number of permits issued since 2015. In 2020, there were 344 residential permits compared to 273 in 2019. 2015 had 411 permits issued which was the highest number since 2007, when there were 427 issued. The most prolific new construction year was 2003 with 601 permits issued. There were several years of steady declines until finally bottoming out in 2011.
New single-family construction occurring outside the services of Billings is a little more difficult to pin down because new construction here does not require a building permit. The best indication of how many new residences are constructed outside Billing but in Yellowstone county, is by new addresses, which are tracked by Yellowstone County GIS. According to Mike Powell, GIS Manger for Yellowstone County, here are the numbers of new residence addresses since 2015: 2015-208, 2016-258, 2017-188, 2018-236, 2019-632, 2020-271.
Except for 2019, new construction in Yellowstone county appears to be consistent, in the 250 range. It must be noted, there are several new and newer subdivisions on the outskirts of Billings. These newer subdivisions are usually one half acre and up and require a central water or sewer system, well and septic or a combination of both. These areas seem to be attractive because of the larger lots and “country” feel.
What Does 2021 Look Like?
The most unscientific prediction I can make is for, at best, the first six months of this year. It is my hope sellers will be increasingly more comfortable with putting their home up for sale as the vaccine for Covid 19 becomes more available. If confidence in our safety and well-being are restored or at least somewhat eased, I think the inventory will begin to increase and bring some stability to prices. This could make it a “win-win” scenario for buyers and sellers, given the interest rates should remain low (hopefully) through 2021. Sellers will be able to sell for a good price and buyers will enjoy the lower interest rates.