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So, the Bozeman housing market is no longer ridiculous, and prices are continuing to fall as people need to sell.
Funny thing, housing prices have gone up so much over recent years that even when they come back down a little you think they're a deal.
When you put realestate prices in proportion to what they use to be based on a working man's salary - they are probably a good three times more expensive today - meaning a 300k homes should be 100-150k.
Using the 42k salary figure I heard for a 4 person MT family (that even might include some spouse income) that figure would suggest a starter home cost off about 120k..........And I say starter 'home' not a condo or townhouse, meaning years ago when you bought a starter house you got a starter 'house' --- backyard, garage, etc....
That was part of the reason for the morgage debacle we've seen of late, people simply couldn't afford on the bottom end to buy homes anymore, so in order to move and keep that bottom end of the market alive mortgage money had to be made available to the sector - even if it ment bending and breaking all the rules of banking, mortgage brokering not to mention common sense. Now the chickens are coming home to roost. So if the realestate market and the mortgage industry were to come back to normal as you figure it might have to at some point with all that loose money gone, then house prices for starter homes will have to come down still quite a bit, and the bottom end of the market has an effect on the next tyers up....so we'll see.
The government is pointing fingers in every direction and at everyone for the mortgage mess....but I'd bet a dollar to a donute hole if you were to scatch down beneath the surface just a little bit, you'd find that they (the government) relaxed/changed alot of banking and lend standards that cause the problem, they also had such a loose money policy at 1 percent fed rate, they were basicaly giving away money. They were desperate to keep the economy going after the stock market bubble bust of 2000 and the inevitable slow down from the unwinding of the new internet industry which had a natural stimulating affect on the economy, verse a fall affect of just dumping money into society - like the new 'stimulation' package. The house market took of the slack of the internet industry.
Even though the politicians always take credit for creating jobs - it's industry that really creatts them....in the 80s it was the micro/pc/home computer, the 90s the internet and telicomunications, 2000's was the housing - false and contrived as it was - so what is the next industry that will drive the economy, you just can't dump and give away money to everyone (bush stimulation package), add to all this that - we GAVE away how many millions of manufacturing jobs and then insourced another how many million to the illegals sucking down the wage in the process.....so what are we left with ? It's a scary time for our country. The real cause of the 30's depression as stated by some was that the boom industry of the time, early type electronic items, radios, toasters,etc....had run it course, not going away but just maturing, new industies have that effect then they mature leaving a few companies to dominate, and the rose is off the economic bloom so to say until the next new industry comes about - after the 30's depression it was the WAR and so on...... presently there is a lot of money out there just sloshing around, making for the inflation we are seeing now in every direction.....interesting times......and the government answer is to give away money and lower interest rates in a panic at the federal reserve, and wasn't that what got us in the mess - lower interest rates to ridiculous levels. Oh well.....I just hope you've kept some powder dry. I have. We are now living in a socialist nation wittness by the giving away of everything including free money by the government, it's a reflect and they know what's up, but will never let on....they know their job now is to just print up money and give it away if need be - and isn't that exactly what Bush and his buddies have been doing for how many years now......"Free Free Free at last" it kinda' gives a whole new meaning to Martin Luther Kind's words, doesn't it.
Last edited by JoeJoeMan; 02-09-2008 at 09:01 PM..
Joe, sorry, but as much as I'm aware that the current economic issues we faced are based on how we've dealt with last issues, your post only barely touches on bozeman housing, saying basically, "Well, it may be falling, but they should be cheaper"
The past is useful in knowing how to not repeat it, but we need solutions to the problems, not just reminders of what they are.
I am not a realtor, but I am interested in the topic of "pricing" of products in general. I need to weigh in with some comments re: "the prices aren't what we think they should be". If one visits Seoul, or Hong Kong, Japan, Paris, or any of the great world cities it is common to see undistinguished studio apartments sold as condo's for $1M. It causes not a blink among that population. And if you find that implausible, or unmaintainable there is a fact that makes this even more incredible...there is little or no mortgage market. Meaning, people pay $1M cash for the right to own this place in space. I've watched several waves of immigrants come to my area and upon seeing 4 bedroom houses in nice neighborhoods for only $500K purchase several just to hold as investments. Sure enough the new market dynamic in time creates a basic $1M home market that forms some entry level price in the city proper.
Why am I saying these things? You may, or may not, be oberving a fundamental and permanent change in DESIRABLE AREAS baseline home prices. I suspect there are many areas of eastern Montana, the Dakotas, etc. where price changes are simply reflections the ability to pay of local workers plus inflation. When I lived in NYC I was competing with GM for real estate, some of you are competing with silicon valley millionaires and that's a proposition to fight.
Accept and exploit is not the worst advice you can get.
Those are pretty astute observations TypicalCalifornian! BTW i'm the same person as LSUTigers but I just forgot my password for that screename and couldn't get the support here to email me a new one. I'm glad to hear from others that prices continue to drop in Bozeman... hopefully this will be a new trend for the next several years at least.
Joe, sorry, but as much as I'm aware that the current economic issues we faced are based on how we've dealt with last issues, your post only barely touches on bozeman housing, saying basically, "Well, it may be falling, but they should be cheaper"
The past is useful in knowing how to not repeat it, but we need solutions to the problems, not just reminders of what they are.
Well I was speaking in general terms not specificaly to Bozeman. But also those that don't understand the past are bound to repeat it.
I don't think you can pass enough laws to control market/economic dynamics enough to make any great difference.
It depends on who you are if you think there is a "problem" - if you make 500k for selling you back lot - it certainly not a problem for you, but if you're a young family trying to buy a first time home - It's a problem. There is always money to be made from 'problems' - even Katrina has made a lot of people rich and stimulated the local economies.
My solution to the problem of excessive home prices in montana has always be to simply stop encouraging people from moving here. Left to our own devices our economy simply couldn't support the current prices. It's the outside money coming in, once a local gets 1m for his 4 acres on the river - now that local buys a 500k home, and so on, it all has a rippling effect.
Stopping and slowing the demand will go a long way long way in dealing with the esculating home prices. Why is it that when food, gas, utilities prices inflate it's so bad, but when housing goes up, well that's a good thing ? It's a real hardship on first home buyers and even those moving up are hit with the increases.
My solution is simply for people and government agencies local and state to take on a different attitude - that attitute basically says ...we'd loved to have everyone move up here, but we just can't, for the beauty of our land, for our own children who need to live here and need to be able to afford homes and a halfway decent life, and for all the other problems that growth causes and costs us, and so on.................
Now then, of course you can't tell people they can't move here, but you can do what you can by refusing to, for instance not re-zone to accomondate developments, you can stop promoting MT nationaly, etc...
Who would deny that MT would be much more like the place we all want it to be and live in, if in 20 years foward it is that same place as it is now, or would you perfer the Gallatin Valley having another couple thousand condos in it..what do you want? Even the developers make a good living now will probably wanna leave in 20 years for green pastures when they see what the area has turned into... There is very little upside to 'growth' - and our recent past proves that out, where selling and pimping off our way of life, just like we did with the clear-cutting and the shamless mining practices of the past. And then we end up blaming "those outsiders and back-easters" for coming in and exploiting us and then leaving.......well what's going on now - outsider and insiders we're all to blame now, they're all piling on to make a buck and to hell with the future. I can guarentte you that as sure as you are sitting there, that in 40 years people will be saying......."God what were they thinking when they built all the crap in such a beautiful pristine valley"
I think we should all start wearing T-shirts like the one I saw some old gray haired local sporting and even make some bumber stickers - "Montana sucks now go home and tell your friends"
Stopping the influx of people will go a Looooooooooooooooooooooooong way in curing alot of our problems. YES YES YES I know you CAN"T tell anyone they can't move here - But you don't have to encourage them to come and you can let them know what issues and what hardship they are placing on our kids and the land. AND PLEASE STOP promoting our state, let those national realestate ad people know we don't apprecitate in the slightest way what they are doing........
In short, we all need to stop promoting and encouraging the course of our own demise.
Last edited by JoeJoeMan; 02-10-2008 at 01:05 PM..
The rezoning will take place unless people get envolved in stopping it.
A couple weeks ago, somebody mentioned that the city council was opening up an area for commercial but that it should be left alone.
Somebody else responded with, get envolved. Go to the city council meetings and voice your opinion, go to the county board meetings and let them know you oppose that land being rezoned.
The response he got was:
See, that's what we don't like about outsiders, always telling us what to do.
How else are you going to change it if everybody sets back on their laurels and lets it happen?
The rezoning will take place unless people get envolved in stopping it.
Not sure if I quite get your point...But
I hold very little faith in our current government, state and local. Getting involved will get you nowhere except frustrated and dissolutioned..Noting ample evidence in some recent zoning events in and around Missoula, the council and developers just do what they want....they do a lot of lip service with that 'community involvment' but then just ram thru what they want.....and then tell you....."we got the communities input before making are decission".....
Nope, our only hope is that someday (which will be to late) that enough people will have a large enough collective attitude including the people in government to try and stop the growth monster...And actually I'm not holding out much hope for that.......greed is a much more profus human quality than forsight.....meaning everyone is greedy to a some extend......but only a few rare individuals have forsight enough and wisdom to think about the world past their own nose or for that matter about the next generation...Want proof - just look around you.
For my part I just like to let all those short sighted people who are so bent on developing this place into oblivion one development and condo at a time, well I like to let them know what I and probably a lot of others think of them.....and it isn't much, I hold them all in the lowest esteem for the raping of the last best place, all for the sake of a buck.
Maybe the native americans had it right - as I recall the story of how a group of braves caught up with a pack of gold hungry conquistators and melted their gold, pouring it down their throats.
Personally I'm not near that agressive, and in no way am I suggesting any such thing but there is a lesson or two in that story.
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