2011 Madisonian Spring Home & Garden Edition

Page 1

Spring Home&Garden

19 | April 21, 2011

THE MADISONIAN - Serving Southwestern Montana

“Buyers are back”

Local Realtors are encouraged by activity By Kurtis Koenig The Madisonian The hay-day of the 2007 housing market boom is the stuff of distant memory. With Madison County residents trudging toward what is hopefully the end of a lengthy recession, many wonder at the state of the local housing market. The answer to that query is more difficult than one may think. Nationally, homes appreciated in value by nearly 7 percent from 20002007, according to a Bureau of Business and Economic Research study. In Montana, homes appreciated by a little more than 8 percent. From 2008 to 2009, Montana homes lost value by a

little more than 2 percent, which is much better than the national 5 percent dip, according to the study. If an individual wanted to search for his own answer to this question, the most conventional approach would include a call to his favorite Realtor. That Realtor would then access MLS (Multiple Listing Service) which is only available to real estate agents and provides information about the market. Other studies, like, and including, the MLS, provide averages, percentages, and other important information, but according to Melinda Merrill of Reed Real Estate in Ennis, it doesn’t tell the whole story. “Everyone has been looking only at averages,” she

said, “but the averages are skewed.” From 2004 to the end of 2007, 176 homes sold in the Ennis area. The lowest annual yield of sales was 32 units, in 2006. “If I compiled an average per home sale, the numbers would be skewed,” she said, “because I was figuring in the sale of homes which sold for more than a million dollars.” One such sail can render a handful of $100,000 sales moot. The home sale average in 2007 was $455,503. “But I included the three homes that sold for more than $1 million, and the 14 that sold for more than $500,000,” she said. “So I went back and dropped the three high-end sales and refigured it.” Merrill’s calculation

indicated an adjusted average home sale price of $248,000 in the Madison Valley. She repeated that process with home sale averages from 2008 to 2010. A 17 percent dip in sales took place in 2008, followed by a 24 percent plummet in 2009 ($126,666). However, 2010 showed an 18 percent increase to $153,950. The averages found on MLS would indicate that the average sale price in 2010 was closer to $300,000 because MLS includes the two sales that were more than $1 million. The plot thickens when one considers the past decade. Out of town home sales in 2010 fetched 7.7 percent more in 2010. Homes located on the Madison Meadows Golf course sold for 316 percent more in

2010 than they did in 2000. Bare land within the Ennis city limits improved by 397 percent. In town home sales rose by 55 percent. Of course, homes bought in 2007 would likely not demonstrate that rate of appreciation, but the general 10-year trend is highly suggestive of upward growth, Merrill said. Where there is recession there are short sales, foreclosures and auctions. According to Merrill, nine of the homes sold in 2010 were purchased for at a minimum because of some form of short sale or foreclosure. Those sales drive down the average as well. Other factors contributing to the value of homes is location. River front properties and golf course homes in Ennis, tend to fetch better prices than homes

located in other areas. For this reason, it is not particularly fair or feasible to use generic averages when looking to buy or sell a home. Karen Talley, the broker of Clear Creek Realty in Sheridan agrees. “It has been crazy busy,” Talley said. “Starting in October of last year, we have had the busiest winter I’ve seen in 20 years.” She cites several reasons that may have attributed to the rise in the real estate market in the Ruby Valley. “Buyers feel that the market has bottomed out,” Talley said. “It’s been a slow recovery and people are getting more confidence in the market.” Although few sales of high-end property have gained Turn to BUYERS on page 22

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