Missoula, MT

It's bee a time of reflection for me, just about 1 year ago my mother decided to close down the local RE/MAX franchise that she'd owned for 16 years. As a group most of our office joined up with the local Windermere office and we've loved it. The Missoula market was very choppy at that time, our early winter/spring was the worst we'd seen in terms of volume. We came out of the winter with a solid summer market but the lasting effects of a down winter wound up putting Missoula's volume of sales at another decline compared to the years before.

So it got me to thinking about 2012 so far and the market leading into it. This year we're finally comparing "apples to apples" as we look at 2011's market to 2012's. I've been interested in seeing how our market is doing this year and so I've put together two quick comparisons. First off the Nov/Dec/Jan market comparisons and then just YTD to YTD for 2011 and 2012.

Starting with looking at 11/1/2010 through 2/1/2011 and comparing that to 11/1/2011 through 2/1/2012.

• In the prior year for Missoula there were 152 sales with a median sales price of $215,500. Of those sales 16 were foreclosures, or 10.5% of all sales.

• Jumping forward to this current comparison there have been 177 sales with a median sales price of $201,000. Of those sales 21 were foreclosures, or 11.9% of all sales.

So the good news? Missoula's volume is up in a big way for it's "slowest" time frame of the holidays and winter months. We've seen an improvement of almost 16.5% in volume. That's big, especially considering that the market conditions were relatively the same, and foreclosures have not dramatically had an increase in the market. The dip in the median I expected for the main reason that this time last year the market had just exhausted it's first time home buyers as the tax credit time-frame to close a sale ended in September of 2011. This time around our market of buyers is much more diverse and we've seen more sales across the full spectrum.

Now lets just look at 2011 YTD to 2012 YTD (1/1 through 2/11):

• For 2011 there were 55 sales with a median sales price of $212,000 with 7 foreclosures sold that consisted of 12.7% of the market

• For 2012 so far we've had 62 sales with median sales price of $188,750 with 11 foreclosures sold that consisted of 17.7% of the market

Volume is up, which is good, a 12.7% increase, however in the shorter range the median sales price dip is a trend worth watching, if that stays this low we're going to see that the 2011 median sales price increase for our market as a whole be a one time thing. It's still way too early to determine of 2012 is going to keep putting downward pressure on sales prices and values, but this early start suggests it might. Also the bump-up in foreclosures re-sold is worth watching, as the robo-signing delays are now in the past it's expected that more foreclosures will infiltrate our market, that's another trend that could punch values down some more.

I had a nice opportunity to do a little interview with our local NBC affiliate. The only thing I wish I would've done better was notice my tie! It's all I see when I watch this, should've not worn it or tightened it, haha.

http://www.nbcmontana.com/news/30355875/detail.html

Brint Wahlberg

REALTOR®

Windermere Real Estate

406-529-4663

While the Missoula Organization of Realtors (MOR) releases a much more comprehensive market report that won’t occur until the early spring. All of the data I’m providing I retrieved from the MOR multiple listing service.

Numbers for just Missoula (does not include Lolo, Frenchtown, or Bonner and further east)

- 776 residential sales in 2011. (a 6.5% decrease in activity from 2010)

- 830 residential sales in 2010.

- median sales price of $205,250 in 2011. (an increase of 2%)

- median sales price of $201,240 in 2010.

- current market supply (absorption rate) is 9.37 months

* This means that based on the last year’s activity in sales there is currently 9.37 months’ worth of inventory listed for sale in Missoula. Comparing to previous years this is very low and shows that inventories (listed homes for sale) are very low compared to where they’ve normally been at this time of year. 9.37 is considered a marginally healthy market with a slight over-supply. Usually MOR’s winter months have seen absorption rates in the 12 to 18 month range.

Numbers for outside of Missoula (stretches down Hwy 93 past Hamilton and as far north as Polson, as far east as Lincoln and Phillipsburg, as far west down I-90 to the MT/ID border as well as the Noxon area). These numbers reflect the whole area outside of Missoula in our MLS and aren’t the best representative of a certain town/community.

- 903 residential sales in 2011 (an 11.7% increase)

- 808 residential sales in 2010

- median sales price of $175,000 in 2011. (a decrease of 11.7%)

- median sales price of $198,239 in 2010.

- Current market supply (absorption rate) is 23.5 months of supply.

Foreclosure numbers for 2011. These are homes that were re-sold in our MLS after bank foreclosures. MOR began tracking this in mid-2010 so we do not have accurate numbers to compare 2011 and 2010.

Missoula area: 86 sold, 11% of the total market

Outside of Missoula: 244 sold, 29.4% of the total market

New construction. Many builders do not report a portion of their sales to the MLS, this is not the most accurate portrayal of new construction in our area, but it is the best our MLS can provide. I would suggest looking at the amount of building permits the city/county approved in 2011 compared to 2010 as a better indicator.

Missoula:

- 33 sold in 2011

- 76 sold in 2010

Outside of Missoula:

- 28 sold in 2011

- 33 sold in 2010

Comparing general numbers to historic peaks. Per www.MissoulaRealEstate.com which is owned by the Missoula Organization of Realtors. These numbers are for the Missoula area only.

- Peak volume was in 2006 with 1443 sales, putting the current 776 as a 46% decrease in volume from the peak.

- Peak median price was in 2007 at $216,900, putting the current $205,250 at a 5.4% decrease in median sales price off the peak.

This video has been making the rounds on facebook and via email. THis was put together by a local student here in town that stiched together this animation that consists of many of the familiar sights you see around town.

It's pretty cool, I thought it'd be fun to share!

http://www.youtube.com/watch?v=LDpabLDK83E

So now that we've done single re-caps of the segmented neighborhoods and surrounding communities of Missoula, lets put this data together in some easy to understand charts and data.

First off, looking at how each area did from 2010 to 2011 in terms of their median sales price. You'll see in the chart below that we're looking at most areas still are experiencing a negative affect on their median values over the course of 2010 to 2011. I had speculated that some areas could see a bit of median recovery in 2011 due to the exit of the overwhelming presence of first time home buyers. That speculation was largely wrong with the exception of the Mullan Road area which was highly influenced by 1st time home buyers.

Moving on, now we take a look at the DOM or days on market. This is for the sold homes only and isn't exactly a fair representation of what is going on in the market as it does not take homes that failed to sell into account. However it's the best of what we can do when looking at things historically. We can see that in many cases sellers over the past year in Missoula experienced extended market times.

Two down, two to go. This next chart is the one that is the "hot button" issue in our area, the impact of foreclosures. In each of my individual neighborhood blogs I'd reported the bulk number of foreclosures. This chart compares 2010 to 2011 again, as the others have. However it compares not the bulk number but the % of overall sales in the area that were foreclosed homes selling. So when you see a result showing 10% in 2011 that means 10% of the total sales in that area for 2010 were foreclosed homes. Hope that makes sense, I wanted to put this together in a format that is easier to read and understand.

And finally absorption rates, which represents the amount of inventory currently listed for sale in each neighborhood/area. These rates were taken from my neighborhood blogs which calculated the last 12 months worth of area sales and compared it to the amount of listings currently actively listed or under contract. What this means is that based upon the last 12 months activity, if things remained the same, it would take this many months for this inventory to be sold.

Absorption rates change daily, so this is really just a snapshot of right now. New listings and sales impact rates regularly, however this 12 month look back shows a little more well-rounded and stable numbers as compared to what a 30 day look back would do.

I added two lines for reference, based upon a general rule of thumb. Anything over the red line (10 months or more) represents what would be considered a buyer's market as right now these areas are in over-supply. Anything below the orange line (4 months or less) represents what would be considered a seller's market as right now there is an under-supply of listings. In between the two lines is a more "normal" market with a healthy amount of both buyers and currently listed inventory.

Grant Creek, the Goodan/Keil roads, and Butler Creek make up the more northwestern area of Missoula, a little more isolated from the rest of town these areas feature a few pocket-subdivisions that consist of mostly higher-end homes and then a mix of newer housing that sits of good sized parcels of land. Many of which of these properties you'll still find barns, pastures, and horses on!

Starting with 2010 we saw just 18 sales with a median sales price at $305,250. The average days on market for these 18 sales was 189 days. The median listing price was at $314,900, suggesting that these homes sold for 97% of their original listing price. There was just 1 foreclosure sale in 2010 for this area.

Moving ahead to 2011 the amount of sales jumped up to 36, with a median sales price of $290,000. The average time on market for these sales was 117 days. The median listing price was at $299,900 which suggests that these homes sold for about 97% of their original listing price. The amount of foreclosures sold went up from 1... to 2.

This area was pretty hard-hit in 2010 and appears to be making a decent recovery if 2011's trends hold firm. With the amount of sales doubling and the median not taking a huge hit, buyers are returning to this area but still see it holds solid value. Overall these neighborhoods represent a smaller portion of Missoula's overall housing market as they don't grow very rapidly, but the outlook here is fairly positive, especially with minimal foreclosure impact on the market.

The absorption rates right now sit exactly on 8 months of inventory listed, based upon a 12-month calculation. That's a little low but Missoula's inventories are down in just about every neighborhood so this isn't a big shock.

Looking forward hopefully this area continues to see volume increase. Consisting of some of the more higher priced homes in Missoula an increase in sales here will help keep median prices all over town stronger. That said I honestly wouldn't be surprised to see it recede just a bit off it's volume for the year. It could have been that in 2011 some "on the fence" buyers were waiting and saw a good time to pick up properties in the area after a slow 2010. Those buyers would now be out of the market and it could have some effects in this area.