Brint Wahlberg

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

Our final stop in the Bitterroot Valley is 9 miles south of Hamilton where we hit Darby, a small town of less than 1000 people Darby features a unique western-themed downtown that’s main attraction is a large candy store. Darby provides access to great fishing spots all over and isn’t much further from the pass leading to the Montana/Idaho border and the Lost Trail Ski Area.

Numbers for Darby showed me that in 2010 there were 35 total sales with a median sales price of $325,000. There were 6 foreclosures and the median time on market was 326 days. In 2011 the amount of sales dropped by 1 down to 34 sales and the median price went all the way down to $161,700. There were 4 foreclosures sold in the MLS and the time on market was 290 days. I had to check and then double-check the median because of such a sharp drop. What I found was that in 2010 it appeared that Darby was the place to buy homes over $500,000 as that was a large amount of their sales. Come 2011 those sales disappeared and the lower-end dominated the market. The overall market hasn’t lost that much in value… but the activity shifted very sharply, as you can see in the median change.

Calculating the running 12-month absorption rates we see that Darby right now has 36 months’ worth of inventory listed. Being one of the smallest markets Darby currently has over 103 active listings and that amount of supply is making sales times really long right now.

Our next stop is the hub of the Bitterroot and Ravalli County, Hamilton. Hamilton is a town of about 4400 people overall and was originally founded and mapped out by Marcus Daly himself as it was right next to his estate. Hamilton has a very strong community identity and hosts many local events throughout the year. It provides access to the further southern Bitterroot as well as to many trails and national forests that surround it. Hamilton also features labs for GSK and has an exclusive golf-course called The Stock Farm Club which is a private course where you have to prove you’re worth millions to come play at.

The 2010 numbers for Hamilton show 126 total residential sales with a median sales price of $178,750. There were 22 total foreclosures sold and the median time on market was 150 days overall. Moving ahead to 2011 the amount of residential sales went up to 142 and the median price went up as well to $185,950. The amount of foreclosures sold actually went down to 19 and the median time on market extended out to 191 days.

Looking at the running 12-month absorption rates for Hamilton we get 20.5 months’ worth of supply listed for sale right now. It’s one of the lowest in the Bitterroot, but it’s still a sign of vast over-supply, a trend that plagues the whole valley.