The Montana real estate market has a lot to offer in spite of experiencing a shortage of housing due to steady job growth and the limited ability of construction companies to maintain the supply. In this article, our focus will be on the Billings real estate market trends and investment opportunities in 2020.
The Billings housing market is a small and stable real estate market surrounded by hot regional markets like Boise, Boulder and Whitefish. People often overlook the Billings housing market in favor of hotter markets where rental business can flourish by renting to tourists including those visiting Yellowstone. Yet there are many reasons to consider investing in the Billings real estate over the alternatives.
Billings is home to a little over a hundred thousand people. This alone makes the Billings housing market the largest in the state. Billings has several smaller suburbs. The broader Billings real estate market contains roughly two hundred thousand people.
The strengths of the Billings real estate market are low unemployment rate, growing local economy and strong median household income. Additionally, with no sales tax in the state of Montana, Billings has become a very popular retail destination. Montana charges no sales tax on purchases made in the state. The state sales tax rate in Montana is 0%. Montana cities and/or municipalities don’t have a city sales tax and there are no local taxes beyond the state rate.
Another good factor is that Montana has relatively low taxes on residential real estate. The state’s average effective property tax rate is 0.84%, lower than the national average of 1.08%. The taxable value for an owner-occupied residential property is only a small percentage of the property’s actual market value – which the state of Montana calculates using a different formula.
Commercial and business properties are also entitled to receive big tax exemptions. Billings is the most urban city and a regional retail and service hub. Currently, Billings has grown as an energy center and has among the largest coal reserves in the U.S., as well as having large oil and gas fields.
All of these factors indicate that the Billings housing market is on the fire. However, because of these attractive aspects of the city, it can take some patience to find an appropriate property to invest in. Is Billings going to be one of the best markets for real estate investing in Montana? Let’s take a deep look at the latest Billings housing market trends to come to a conclusion.
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Billings Real Estate Market Forecast 2020
What are the Billings real estate market predictions for 2020? Billings housing market 2020 is shaping up to continue the trend of the last few years as one of the strongest markets in Montana. The real estate data from Zillow shows that the current median home value in Billings is $194,600.
Billings is currently more like a seller’s market – which means there are a lot of qualified buyers in the market place and not enough homes for sale in the market. The home prices have risen by 2.1% over the last year. Looking forward into the coming year, the Billings real estate market forecast is that home prices will drop by -1.1%. Since 2011, the median sales price has increased every year from $185,000.
Here is the Billings, MT real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of -1.1% till Nov 2020.
The median list price per square foot in Billings is $190, which is lower than the Billings Metro average of $192. The median price of current listings in Billings is $248,115. The median price of homes that have been sold out is currently not available. The median rent price in Billings is $1,100, which is higher than the Billings Metro median of $1,095.
Zillow reports that 14.7% of the listings in Billings had a price cut in Nov 2019, which is a good thing for buyers. It shows sellers were willing to negotiate on prices as they were finding it more and more difficult to sell homes at asking prices.
Billings Housing Market Forecast 2019 – 2021
Here is a short and crisp Billings housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Billings is 82% and it is predicting a positive trend.
The LittleBigHomes.com estimates that the probability for rising home prices in Billings is 82% during this period. If this price forecast is correct, the Billings home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Billings, MT Real Estate Market Forecast.
Billings Real Estate Market Trends
We shall now discuss some of the most recent housing trends in the Billings such as median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in Billings.
Trulia has currently 1,154 resale and new homes for sale in Billings, MT including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. Some of the most popular neighborhoods in Billings are Heights, West End, Southside, Southwest Corridor and North Park. Here you’ll find the maximum no. of homes for sale.
There are currently 138 homes for sale in Heights, Billing, MT. The home prices in Heights neighborhood range from $31.5K – $5.73M. Additionally, there are 37 rental properties for sale on Trulia and their rent price ranges from $505 – $2K. The schools are rated between 2/10 – 7/10.
Heights is located northeast of the Downtown Core and is further divided into East and West Heights. The Heights is a vibrant and exciting suburb of Billings, MT. It has all amenities you need to enjoy in your daily lives.
There are 56 homes for sale in West End, Billing, MT, and the home prices range from $22.5K – $3M. Additionally, there are 23 rental properties for sale and their rent prices range from $595 – $1.65K. The schools in this neighborhood are rated between 3/10 – 7/10.
West End is one of the fastest growing areas in Billings. It is the home of Rimrock Mall and Billings West High School, the home of the Bears. The local middle school is Will James, and Meadowlark Elementary is for K-6 graders.
There are 1,197 homes for sale in Billings, MT on Realtor.com. The newly listed homes for sale are 28. The asking price of single family homes can start from $42,000 and can go up to $16.5M for a luxury property in the West Alkali Creek neighborhood in the city of Billings, MT.
There are currently 93 rental properties in Billings, and their rent prices range from $433 to $3.2K per month. The median rent in Billings is $1,300. There are 95 new construction homes for sale in Billings within a price range of $156,900 to $16.5M.
According to their statistics, the median list price of homes in Billings, MT was $254.9K in November 2019, trending up 4% year-over-year. The median listing price per square foot was $119.
The median list price in Billings is $153,970 on Movoto.com. The median list price in Billings was less than 1% change from November to December. Billings’s home resale inventories is 1, which increased 0 percent since November 2019.
The median list price per square foot in Billings is $130. In November 2019 it was $130. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in December.
Billings, MT Single & Multi-Family Homes Statistics
Following the real estate market decline in 2007 in the U.S., single family rental homes became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate.
Single family rental properties have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
U.S. single-family rental market has seen steady rent increases between 2010 and 2019. According to CoreLogic’s latest Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and among 20 metropolitan areas, it shows a national rent increase of 3% in April 2019, as compared to 2.8% in April 2018.
The average sales price of new homes sold in the U.S. fell by 1.6% year-over-year in July 2019, to $388,000, according to the U.S. Census Bureau. In fact, the median sales price of new homes sold fell by 4.8% to $312,800 over the same period.
For existing homes, the median price was up by 4.3% to $280,800 in July 2019 from a year earlier, according to the National Association of Realtors. July’s price increase marks the 89th consecutive month of year-over-year gains. Demand remains robust. During the year to July 2019, new and existing home sales increased by 4.3% and 2.5%, respectively.
As per the real estate company called Neigborhoodscout.com, the median house price in Billings, MT is $220,330, which indicates that home prices in Billings are above the national average for all cities and towns in the United States.
Single-family detached homes are the single most common housing type in Billings, accounting for 61.38% of the city’s housing units. Three and four bedroom single family detached homes are the most common housing units in Billings.
Other types of housing that are prevalent in Billings include large apartment complexes, duplexes, homes converted to apartments and a few row houses. Billings has a mixture of owner-occupied and renter-occupied housing.
After the great recession of 2008, renting a home has increased exponentially across the nation. There are currently over 136.57 million housing units in the U.S. In 2018, the total number of homeowner households hit an all-time high of 76.2 million. 36.6% of households rent their homes and 64.4% buy their homes (2018 U.S. Census Bureau).
Currently, there are 415 single family homes for sale in Billings, MT on Zillow. Additionally, there are 73 single family homes for rent in Billings, MT. Under potential listings, there are about 6 Foreclosed and 50 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
Billings, MT Foreclosures And Bank Owned Homes Statistics
As per the Billings foreclosure data by Zillow, the percent of delinquent mortgages in Billings is 0.8%, which is lower than the national value of 1.1%. The rate of delinquent mortgages in the entire Montana housing market is less than one percent.
There are currently 50 properties in Billings, MT that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 602. In November 2019, the number of properties that received a foreclosure filing in Billings, MT was 23% lower than the previous month and 9% lower than the same time last year.
| Total No. of Foreclosures in Billings | 50 (RealtyTrac) |
| Homes for Sale in Billings | 602 |
| Recently Sold | 2,014 |
| Median List Price | $241,900 (1% drop vs Oct 2018) |
Neighborhoods To Choose in The Billings Real Estate Market
If you are looking to invest in the Billings real estate, you should know the best places to invest in. The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. Demand would raise the price of your Billings rental real estate and you should be able flip it for a lump sum profit.
When looking to invest in Billings real estate, you need to find places where the expected property appreciation forecast is positive. The running costs for owning and managing an Billings investment property should be low. The neighborhoods in Billings must be safe to live in and should have a low crime rate.
The neighborhoods should be close to basic amenities, public services, schools and shopping malls. There should be a natural and upcoming high demand for rental properties and a low supply of income properties. Billings is among the most populous and least walkable cities in Montana. There are 35 elementary schools, 12 middle schools, 5 high schools and 16 private & charter schools in Billings.
There are 13 neighborhoods in Billings. Some of the best neighborhoods in Billings, Montana are Billings Heights, West Shiloh and East Central Billings. West Alkali Creek has a median listing price of $579,900, making it the most expensive neighborhood. South Side is the most affordable neighborhood in Billings, with a median listing price of $145,000.
Here are a few good neighborhoods in the Billings real estate market which have the experienced the highest appreciation rates (List by Neigborhoodscout.com).
| 1 | 1st Ave S / State Ave |
| 2 | City Center |
| 3 | 6th Ave N / N 22nd St |
| 4 | S Billings Blvd / King Ave E |
| 5 | Montana State U-Billings / Rimrock Rd |
| 6 | Poly Dr / 17th St W |
| 7 | Broadwater Ave / Shiloh Rd |
| 8 | Shiloh Rd / S Shiloh Rd |
| 9 | Broadwater Ave / 12Th St W |
| 10 | 13Th St W / Grand Ave |
Is Billings a Good Place For Real Estate Investment?
Investing in good real estate markets is touted as a great way to become wealthy. Is Billings a Good Place Real Estate Investment? Many real estate investors have asked themselves if buying a property in Billings is good investment? If you want to find out whether Billings real estate is a good investment or not, you need to drill deeper into local trends. The Billings real estate trends will tell what the market holds for the year 2020.
We have already discussed the Billings housing market forecast for 2020. Purchasing an investment property in Billings real estate is a little different from shopping for your car or primary residence. While you still want to get the most for your money, if you are looking to make a profit, you don’t want to buy the most expensive property on the Billings real estate market and expect to make a good profit on rents.
Perhaps you are looking for a slightly different hold-over, an investment property in Billings that you might move into or sell at retirement in the future! Either way, knowing your profit potential and purpose is the first thing to consider. Let’s take a look at the number of positive things going on in the Billings real estate market which can help investors who are keen to buy an investment property in this city.
1. The Affordable Real Estate Market for Investors
The average price of a home in the Billings real estate market is just over 200,000 dollars. That’s slightly less than the national average. However, this is a bargain by Western US standards. For example, the median home price in Boise is over 300,000 dollars. The Billings housing market is also kept affordable by the relatively large number of second homes in the area.
Between five and ten percent of homes are only occupied during the summer or winter. This creates opportunity for those searching for a bargain, such as when you offer someone a deal to buy out their rarely used vacation home. Conversely, the abundance of these properties mean the rules for renting out a property in the Billings housing market are fairly relaxed.
2. The Steady Real Estate Appreciation
A Billings real estate investment property bought in 2019 would have appreciated 6.5 percent. The housing market is expected to slow down in 2020, but appreciation is still expected to hit 1.5 to 2 percent. While the housing market is warm, it isn’t so hot that we’ll see an explosion in new construction. Given expected rates of appreciation, the Billings housing market should hit an average home value of 250,000 dollars by 2023.
3. The Strong and Diversified Economy
The Billings real estate market is bolstered by the relatively strong, diversified economy. For example, the Billings area is the regional services hub for a large area that’s home to roughly half a million people. The city is the home to several banks, mining companies and service providers.
Employers like oil refineries and sugar beet processors also provide more stable employment than seasonal agricultural employment and boom-bust jobs in the oil sector. The unemployment rate in Billings is roughly two percent and half the national average. This gives it a much more stable housing market than tourism dependent areas, though Billings has more hotel rooms than any other city within easy driving distance.
4. The Lure of Jobs and Its Impact on the Housing Market
The job market is attracting a lot of local migration. This is a continuation of the general trend of people moving from rural areas to cities for work and access to amenities. That trend is seen in cities that don’t have much better employment than the surrounding rural areas but offer schools and hospitals. And Billings offers an unemployment rate a full point and a half below the Montana average. It also offers per capita income about 2K more than the state average, though that’s offset by the high cost of living.
5. The Economics that Drive the Rental Market
The Billings real estate market has about as many renters as the national average; just over a third of people living in the Billings housing market rent. However, the Billings job market is dominated by lower paying service jobs. The 29,000 dollar a year per capita income leaves many struggling with the 1000-1100 dollar a month (or higher) rental rates. This means many would be buyers can’t afford to buy a home in the Billings area.
6. The Relatively Landlord Friendly Jurisdiction
Montana is relatively landlord friendly. We’re not concerned by rules saying you have to return the renter’s deposit within ten days of terminating the lease, because that’s only true if you don’t have to deduct costs like unpaid rent or repairs to the unit. The state allows you to raise rent, but you have to give two weeks’ notice. You can file for eviction if they are three days late on the rent.
Rules requiring notice of entry are reasonable. If you’re going to evict, the state lets you send that notice via text message or email. And because the housing market is not overwhelmed by tourism, you don’t see the prohibitions for short term rentals with Billings real estate investment properties that have been applied in Whitefish and Missoula.
7. The Relatively Large Student Market
Billings as the largest city in the state is going to be home to several colleges. Montana State University Billings is a state school. Yellowstone Baptist College and Rocky Mountain College are private schools. These schools would allow you to have a diversified Billings real estate investment portfolio catering to college students. This large population of renters also drives up rental rates in the Billings housing market.
8. The Strong Demographic Momentum
The Billings housing market has strong, long-term potential for growth. The city’s population is a few years younger that the state and national average. The strong local economy attracts young people from the surrounding area and helps it retain those who graduated from local colleges.
9. The Low Tax Burden
While Montana can’t beat Nevada’s low tax rates, it does beat out a number of surrounding states. Montana comes in 38 out of the 50 states in national ranking of states’ overall tax burden. The average property tax bill is 0.75 percent of the home’s value. For comparison, the national average is 1.1 percent of the property’s value. State income tax rates are in line with the national average.
10. The Low Regulatory Burden
Montana offers a relatively low regulatory burden on businesses in general. It is far better than neighbors Idaho and North Dakota. Montana allows short term rentals in single family homes as long as you get a sales tax permit and business license. You are required to file and pay lodging taxes.
However, you don’t have to form a limited liability corporation in Montana to register with tax authorities, whether you’re renting out a vacation home or buying up a Billings real estate investment portfolio to rent out on a seasonal basis.
Investing in Billings Real Estate: The Conclusion
Maybe, you have done a bit of real estate investing in Billings, Montana but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold.
The Billings real estate market offers strong market fundamentals like decent rates of return and slow, steady growth. It stands out for the low tax rates, low regulatory burden and landlord-friendly legal system. A good cash flow from Billings investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding a good Billings real estate investment opportunity would be a key to your success. If you invest wisely in Billings real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate. Most investors naturally gravitate to residential property investment.
When looking for the best real estate investments in Billings you should focus on neighborhoods with relatively high population density, employment growth and strong appreciation potential. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing locally in the Billings real estate market. As with any real estate purchase, act wisely. Evaluate the specifics of the Billings real estate market at the time you intend to purchase.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process.
They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in Billings real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Best Places To Invest in Real Estate in 2020
The other best place to invest in real estate is Myrtle Beach, South Carolina. The Myrtle Beach housing market offers affordable real estate, decent rates of return, a steady housing market and the opportunity for tourism revenue. It is amenable to property owners, and it is primed for long-term growth.One reason to consider Myrtle Beach real estate investment is the tourism market.
The area is known for its white sandy beaches and many world-class golf courses; there are 90 full golf courses in the area. There are campgrounds and family-friendly resorts. This is why Myrtle Beach is one of the tourism hotspots in the state. And it is growing.
The other best place to invest in real estate is Sioux Falls, South Dakota. The Sioux Falls real estate market is stable, steadily appreciating, growing and affordable to outside investors. These are reason enough to consider Sioux Falls real estate investing, though there are niche markets where you can see even better returns.
Sioux Falls enjoys a surprisingly resilient economy. It isn’t as dependent on government spending as other state capitals. Nor is it a college town, though it is home to multiple educational institutions. The city saw 10 percent growth from 2010 to 2017, nearly double the national average. They aren’t attracting international immigrants.
Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References:
Updated Market Prices, Trends & Forecasts
https://www.zillow.com/billings-mt/home-values/
https://www.realtor.com/realestateandhomes-search/Billings_MT/overview
https://www.movoto.com/billings-mt/market-trends/
https://www.housingpredictor.com/2018-montana-housing-market/
https://www.realtytrac.com/statsandtrends/mt/yellowstone-county/billings/
Neighborhoods
https://en.wikipedia.org/wiki/Sections_of_Billings,_Montana#West_End
https://www.neighborhoodscout.com/mt/billings/real-estate
About Billings
https://en.wikipedia.org/wiki/Billings,_Montana
Lure of jobs
https://www.areavibes.com/billings-mt/employment/
https://billingsgazette.com/news/state-and-regional/montana-s-unemployment-rate-drops-to-in-july/article_ae64852f-0657-59d3-99b4-1cc8e097ad73.html
Affordable real estate for investors
https://www.weknowboise.com/blog/real-estate-market-trends/
Economics that drive rentals
https://www.areavibes.com/billings-mt/employment/
Landlord friendly
https://www.nolo.com/legal-encyclopedia/overview-landlord-tenant-laws-montana.html
https://www.montanalawhelp.org/resource/what-you-should-know-about-evictions-in-montana-1
http://www.montanabusinessquarterly.com/the-rise-of-short-term-rentals/
The relatively low tax burden
https://taxfoundation.org/state/montana/
https://smartasset.com/taxes/montana-property-tax-calculator
Relatively little regulation
https://taxfoundation.org/publications/state-business-tax-climate-index/
https://www.avalara.com/mylodgetax/en/resources/vacation-rental-tax-guides/montana.html
Demographic momentum
https://www.areavibes.com/billings-mt/demographics/
