Articles

Published in the Bozeman Chronicle, December, 2007.

As another year winds down, it is nice to look back fondly on what has transpired in the last twelve months and also take some time to look towards the coming year with anticipation and an eagerness for what is to come. The real estate market certainly experienced an interesting year and has made more headlines than it would like to in some instances. However, in the spirit of starting a fresh year, this article will highlight some of the trends that are driving today's real estate market into 2008.

Condo hotel sales are anticipated to be on the rise again in 2008 as financing is expected to loosen up for buyers willing to put 30% or more down. They are most appealing to those looking for a second-home option versus solely as investment properties.

Property auctions for residential homes are currently the fastest-growing segment of the auction industry. They can prove to be a win-win situation in that the sellers can often find a qualified buyer fast, and the buyers can aptly negotiate with very motivated sellers.

Housing communities are experiencing both growth and change. In the past, golf communities reigned supreme, but the emergence of many other types, including cycling, equestrian, and educational focused, among others, are seeing a surge in interest especially from baby boomers that do not have the same needs and interests as their predecessors.

Location, location, location has always been real estate's most notable catch phrase, and that shows no signs of changing. There has been a rise in “micro markets” where a small neighborhood within a larger community is experiencing stable and/or rising prices whereas the area at large is seeing decline. Some characteristics of the well-performing micro markets include quality schools, more affluent homeowners, and higher owner-occupied rates.

Expect to continue to see a large selection of real estate “reality” shows on television. There is a natural curiosity for people to see other people's homes and what goes on behind the front door. The only differences may be that some of the shows will become more reflective of national market changes.

Mainstream mortgage practices including sound underwriting and pricing are back in the forefront of lending. Stated-income loans and 100 percent loan-to-value financing are no longer commonplace. However, help should be on the way for buyers who were relying on subprime and Alt-A financing through Fannie Mae, Freddie Mac, and FHA financing.

“Sweetening of the deal” is on the rise in many places by sellers – both builders and owners of existing homes. Builders can use incentives such as fireplaces or other upgrade items, and all sellers can offer to pay some or all of the closing costs in order to help buyers out.

Green homes have been steadily rising with no end in sight. Anything from nontoxic construction materials to energy-conserving heating systems can help homes to sell faster to those who are seeking environmentally friendly housing. The National Association of Home Builders offers classes on building green, and private companies have begun to offer basic courses for real estate agents, home inspectors, appraisers and those in the mortgage industry.

Technology will be continually changing the feel of the real estate industry in the ways that information is collected and disseminated as well as to how property is marketed. Serving clients from all areas of the map drives these advances on a regular basis.

Robyn Erlenbush is owner of ERA Landmark Real Estate (with offices in Bozeman, Big Sky, Livingston and Clyde Park) and Intermountain Property Management. She can be reached at robyn@eralandmark.com.

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