Missoula Investment Properties | For Sale

We have put together an updated list of all multi-family properties listed on our local MLS in the Missoula area.  These investment properties are currently for sale and will update regularly.  If you would like a list sent to you daily, please call or email Jeremy Williams & Associates at jeremywilliams@kw.com. When you consider working with us, we offer our clients a commercial investment property anaylist that can help properly evaluate your potential investment opportunity.  Research includes APOD’s, Cap Rates, IRR and Cash on Cash returns.

We cover Western Montana so if you are looking of a property in an area other than Missoula,

call us at 406-926-6767

 



We made the move!

Keller Williams
Dear Friends,
This year is already off to a great start and we have some very exciting news to share.  During the week of March 21, 2016, we will be moving our real estate business to Keller Williams Realty.  KW is the largest real estate franchise in the world currently with 134,000 agents and rapidly growing.  My family has also been given the amazing opportunity to become personally involved in the new Keller Williams Missoula-based office.  Not only does this opportunity bring a large national and global audience to our client’s properties, Keller Williams also offers our clients a wide reach across the sate of Montana with market centers in Kalispell, Bozeman, Billings, Helena and a smaller business center in Great Falls.  While the Keller Williams brand is new to Missoula, the leadership team and owners are local families that have been in the Missoula and the Bitterroot Valley real estate business for 10-20 years respectively.

What does this mean for our clients?  Keller Williams offers excellent exposure on properties, more tools for our buyers and sellers, and top notch technology.  Over 87% of buyers are finding the home they purchase on the internet and then use an agent (a National Association of Realtors statistic).  With the technology and internet reach that Keller Williams offers, we will have added on-line exposure of our listings to capture those buyers.  Our clients will continue to have the same great service we have provided for the last 10 years with additional tools to better serve you.

We are extremely grateful to Windermere Real Estate, our broker John Brauer, and the Mytty family for our time shared together.  Our appreciation and respect for everyone at Windermere Real Estate remains steadfast. We didn’t leave because we were unhappy.

We are very excited for this next chapter in our real estate careers and to be part of Keller Williams.  We look forward to sharing the KW experience with our friends and clients.  So, if you, or anyone you know, is looking to buy or sell real estate, we would appreciate you sharing our new contact information with them.  Referrals are a very important part of our business, and we look forward to helping you, your friends and your family with all of your real estate needs.  Please notice that we do have new email addresses:  jeremywilliams@kw.com

 and kimw@kw.com.

 

With gratitude,

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Jeremy Williams

Keller Williams Realty

406-926-6767 (Direct)

jeremywilliams@kw.com


Missoula Residential Real Estate – December 2015


BY THE NUMBERS

  • Homes sold December 2015: 56
  • Average days on market: 119
  • List-to-sale price: 98%
  • Median sold price: $224,750
  • Homes sold YTD December 2015: 1,034
  • Median sold price YTD December 2015: $253,529
  • Homes actively listed for sale at the end of December 2015: 262

DESPITE LOW INVENTORY, HOME SALES GREW 14% in 2015

Despite a dip in December, home sales in 2015 outpaced 2014 sales nearly each month of the year; the year ended with a total of 127 more sales than in 2014, a 14 percent increase. Homes continued to sell between 97 and 98 percent of asking price with homes selling, on average, in about three and a half months. There were 262 homes on the market at the end of the year.

missoula residential real estate by the numbers December 2015

OVERALL SHORT-TERM MARKET OUTLOOK

Missoula residential real estate market performance throughout 2015 demonstrated that it is still a seller’s market and unless something drastic happens with inventory or interest rates over the next couple of months, it appears it will continue to be a seller’s market into the first part of 2016.

2015 inventory levels were lower than 2014 levels and year-to-date sales outpaced 2014 by about 14 percent. Both inventory and sales typically decrease during the winter months but based on the sales data we have seen over the last several months, we believe homeowners who list their homes while there is still snow on the ground will see that there are plenty of qualified buyers out there looking to purchase, especially in the under $350,000 price range.

Seller Recommendation: As is typical for the winter months, many homeowners have taken their homes off the market. With inventory at the lowest levels we’ve experienced in years (262 active listings at the end of December) there are many buyers out in the market who are unable to find a home that suits their needs and wants. We strongly recommend to sellers that they either keep their home listed or put it on the market now while there is minimal competition. Homeowners who are competitively priced may entertain multiple offers; sellers are currently getting between 97 and 98 percent of asking price.

Buyer Recommendation: With the lowest inventory levels we’ve seen in years buyers are having a difficult time finding homes to purchase – so be prepared to pay between 97 and 98 percent of asking price, on average, for a reasonably priced home. Prior to beginning your search we recommend that you be prepared with a loan pre-approval letter and ready to make an offer immediately to avoid a possible multiple offer scenario. Your choice of Realtor will also be extremely important, as a proactive agent will not limit their search to the active listings on the MLS and will likely be more creative in finding homes for their buyers.

Download a copy of the full Missoula Residential Real Estate market report here:  Market Report_December 2015

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Keller Williams Real Estate – Missoula,MT


Missoula Residential Real Estate Market Performance – September 2015


By the Numbers:

  • Homes sold this month: 90
  • Average days on market: 101
  • List-to-sale price: 98%
  • Median sold price: $257,000
  • % homes sold under $350,000: 81%
  • Homes sold YTD: 783
  • Homes sold last 12 months: 1,004
  • Homes actively listed at end of month: 376

Homes inventory Missoula September 2015

Low inventory, steady sales, median sold prices continue to rise

The trend of rising median home sale prices in Missoula continued in September; 90 homes were sold with an average median price of $257,000. Throughout 2015, the number of homes listed for sale in Missoula has been consistently lower than last year, however, sales have been stronger this year than last; the number of homes sold year-to-date is about 14 per cent higher than last year and flat to 2013. The combination of low inventory and solid buyer demand continues to push median home sales prices higher, up about 5 per cent over last year and 10 per cent over 2013.

Inventory Homes Sold Median Price Missoula September 2015

Overall Short-Term Market Outlook:

Missoula’s residential real estate market performance over the first nine months of the year has demonstrated it is still a seller’s market and, unless something drastic happens with inventory or interest rates over the next couple of months, it appears it will continue to be a seller’s market throughout the remainder of the year.

Inventory levels are behind last year’s levels and year-to-date sales are outpacing last year by about 14.1 per cent. Both inventory and sales typically decrease during the winter months but based on what we have seen so far this year we believe homeowners who list their homes during the coming few months will see there are plenty of qualified buyers out there looking to purchase – this is especially true in the under $350,000 price range.

Seller Recommendation: During the fall months, we typically see homeowners taking their homes off the market; we recommend that sellers either keep their home listed or put it on the market now, while there is less competition out there. We have cautioned in the past and continue to maintain that sellers price their homes reasonably, as those whose homes are competitively priced may entertain multiple offers and have been getting very close to asking price or more; sellers are currently closing the sale at an average of 96 to 98 per cent of asking price.

Buyer Recommendation: Keep an eye out for reasonably and competitively priced homes; many sellers in the market are priced well so be prepared to pay 96 to 98 per cent of asking price, on average. Prior to beginning or resuming your search we recommend that you be prepared with a loan pre-approved letter and are ready to look at and make an offer on the good homes immediately to avoid possible multiple offer situations.

Download the full report here:  Missoula Residential Real Estate Market Report – September 2015

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Missoula Residential Real Estate Overview – June 2015

Over the last few months we have seen the normal seasonal increase in the number of homes actively listed and in the number of homes sold; in terms of sales, the market appears to be outpacing last year and is comparable to the number of sales in 2013 when inventory was higher. This leads us to believe there are still plenty of active buyers in the market to absorb any additional homes that may come on the market in the coming months.

Missoula Residential Real Estate by the numbers:

  • June 2015 sales were up 60.5% from May, up 10.4% from same month last year
  • Approximately 84% of homes sold in June were under $350,000
  • Average sold prices were 9.2% lower than last month but 1.0% higher than in the same month last year
  • Average list-to-sale price has been at 97-98% for well over a year, June 2015 list-to-sale price was 98%
  • Absorption rates are very favorable for sellers and are running much faster than a normal market
  • Total number of homes on the market at the end of June was 402 with an additional 206 homes under contract
  • Homes that closed in June were on the market for an average of 99 days before the sale was finalized

Selected Highlights

Though the inventory of homes listed for sale is lower than what we are accustomed to seeing this time of year in in Missoula, inventory has increased each month since the beginning of the year and at the end of June there were 402 homes actively listed for sale. There were 138 homes sold throughout the month; at the end of June there were approximately 206 homes under contract.

Despite that the volume of current active listings is slightly behind last year’s volume, sales figures have outpaced last year each month since the beginning of the year, telling us that there are still plenty of buyers in the market. June sales were up by about 60.5 per cent (52 sales) from last month and up by 10.4 per cent (13 sales) from the same month last year. Due to steady demand sellers garnered about 98 per cent of asking price in June.

Overall, for the six months ended June 30, 2015 there have been 459 sales, which is about 19 per cent more than what was sold over the same time frame in 2014.

Inventory of Homes Listed for Sale

Active homes inventory is running behind last year’s level and look more like inventory levels in 2013. We saw the typical seasonal decline in inventory over the winter months and have been watching it slowly increase since the beginning of the year. Though we are behind last year in terms of active listings, based on our evaluation of the absorption rate and the continued interest we are seeing from buyers in the market, we believe there are plenty of buyers in the Missoula residential market to absorb any additional inventory that may come on the market in July and August.

Active Homes Inventory-Missoula-June 2015

Absorption Rate by Price Range

Inventory and absorption rates are an indicator for how fast our market is turning over. If the number of homes coming on the market is proportional to the number sold, our market will continue to strengthen. If there is a substantial increase in homes that are not absorbed by the number of buyers in the market, expect our market to soften until they are absorbed by the buyers.

A low absorption rate in your price range may indicate an opportunity to list your home at a higher price and, conversely, a higher absorption rate in your price range may put downward pressure on your market value. The following graph demonstrates absorption rate by price range. Absorption rates below the 6-month line show which homes are selling faster than a normal 6-month market and rates above the 6-month line are selling slower.

Absorption Rate by Price Range-Missoula-June 2015

5-Year Home Sales by Month

The number of home sales in Missoula increased to a total of 138 in June and there were 206 properties under contract at the end of the month. The following chart provides a monthly snapshot of total homes sold since January 2011. (Green columns represent Under Contract properties for the current year.)

5 Year Home Sales-Missoula-June 2015

Overall Short-Term Market Outlook

After reviewing Missoula’s residential real estate market performance of the first six months of the year, we believe we will continue to witness a seller’s market throughout the remainder of the summer months, possibly into early fall. While inventory levels are behind last year’s levels, year-to-date sales are outpacing last year by nearly 19 per cent and homes are selling about nearly two weeks faster, on average.

Inventory may increase but we do believe, based on absorption rates, there are buyers out there to absorb it. Qualified buyers are looking to purchase a reasonably priced home; sellers whose homes are competitively priced may entertain multiple offers and are getting very close to asking price or more. Sellers are currently closing the sale at an average of 96/98 per cent of asking price.

Click here for full June 2015 Market Report

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Former Marshall Mountain ski area for sale for nearly $3M

JUNE 23, 2015 5:00 AM  • 

If you’ve got about $3 million on hand, a treasured piece of Missoula history is for sale: the former Marshall Mountain ski area.

Situated just seven miles northeast of Missoula in Marshall Canyon, the ski area began operation in the winter of 1941. Night skiing by kerosene flames began in 1958, and more runs were cut over the decades as snow-making capabilities extended the season.

The little hill operated continuously until 2003, when financial complications – including a property seizure by the IRS – forced owners Bruce and Kim Doering to cease ski operations.

Since then, the area has hosted weddings and mountain bike races, but the iconic pink chairlifts have been idle for more than a decade.

The lower 156 acres of the area, including the old ski school/rental building and the main lodge, are listed by Jeremy Williams of Windermere Real Estate for $2.95 million. It has been listed for about 30 days.

The property is a popular access site for hunters, horseback riders, hikers, backcountry skiers and snowboarders. It’s zoned C-A1 Open and Resource Lands, and permitted uses include commercial recreation like country clubs, campgrounds, riding stables and, of course, ski areas.

The long list of potential uses are what Williams hopes will capture the imagination of some plucky entrepreneur.

“It’s a great property,” he said. “The reality is that this mountain has been such a focal point and such a part of the community for so long. A lot of people learned to ski at Marshall Mountain, and there’s a large mountain biking community there.

“In an ideal world, if we had something similar there moving forward, it would be ideal. Who knows what’s going to happen next, but we would love to see it stay in the community’s hands. That’s going to be the continual focus. That would be important.”

Bruce Doering has said in the past he would rather see the site used for recreational purposes rather than “just a rich person building a house.”

The road up to the site is nearly all paved.

“It’s not too far away, and it’s just beautiful land,” Williams said. “So many people are familiar with it and it’s an iconic piece of Missoula. It’s really been encouraging the amount of interest we’ve had in a short amount of time and the potential ideas for uses.”

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The top 480 acres of runs and ski lifts are owned by Five Valleys Land Trust and the Lolo National Forest.

Because Marshall Mountain historically leased the top section from Plum Creek Timber Co., that portion of the mountain was divested and acquired by Five Valleys Land Trust last year.

That organization has said it is committed to working with a new buyer and is open to discussing possible lease options to facilitate similar, non-motorized use of the land, including a ski area.

According to county information, the two buildings on the site were constructed in 1958 and 1975, but both have undergone extensive renovations over time, including construction of metal roofs to mitigate wildfire threats.

The property comes with water rights and piping for snow making.

Williams said Marshall Mountain is suitable for athletic events, corporate outings, family gatherings, holiday parties, company picnics, community and charity events, and weddings.

The area has a varied topography, including flat and gently sloped areas near the base of the hill and mountainous terrain farther up.

With a down payment of $590,000, a credit score of more than 740 and a 30-year fixed mortgage, a buyer could own the property for a monthly payment of $12,668.99, according to Windermere Real Estate’s online listing for the property.

http://missoulian.com/news/local/former-marshall-mountain-ski-area-for-sale-for-nearly-m/article_44f8d154-0002-5665-a9da-33db15b64261.html

 


Missoula Residential Real Estate Market – August 2014

Market Overview

Missoula real estate activity has been on the rise over the summer, giving the appearance of trending toward a more stable market. Active listings, under contract numbers, and sales are all on the rise. With a steady stream of buyers actively looking for homes to purchase, we believe if additional homes become available over the next month, there are buyers out there to absorb them.

By the numbers:

  • August sales are down 16.7% from July
  • Approximately 80% of homes sold in August were under $350,000
  • Average home prices are up 10.5% from the same month last year
  • Average list-to-sale price has been at 97-98% for a little more than a year
  • Absorption rates are still favorable for sellers and are running slightly faster than a normal market after starting the year as a buyer’s market
  • Total number of homes on the market is 484 with an additional 159 homes under contract

Buyer Recommendation: Despite the increase in homes on the market, with buyers out looking, sellers whose homes are competitively priced have been and still are entertaining multiple offers and getting very close to asking price. Prior to beginning or resuming your search, we recommend that you be prepared with a loan pre-approval letter and ready to look at and make an offer on the good homes immediately to avoid possible multiple offer situations. Average lender rates for mortgages have been increasing steadily and, if rates continue to rise, we anticipate a downward pull on affordability for buyers in the market for a new home. Be prepared to pay 97-98 percent of asking price, on average.

Seller Recommendation: With inventory increasing over the last couple of months, and despite the increase in buyer activity, we still recommend putting/keeping your home on the market, especially since there are currently more buyers in the market than we have seen in the last several months. However, while it seems it is still a seller’s market and average sold prices could increase a little during this time, it is still very important to list your home with a reasonable and competitive price.

 

Absorption Rate

Overall, the Missoula market performed at a slightly faster pace than a normal market, producing an overall absorption rate of 4.2 months in August, compared to 4.7 months in July. This means homes sold faster than in a normal market where it takes approximately 6 months to sell a home. Overall absorption rate history for the last four years is presented in the following graph.

Msla Absorption Rate History_Aug 2014

 

 

 

 

 

Inventory of Homes Listed for Sale

Over the last year Missoula had been experiencing a significant shortage of homes on the market, however, in the last few months, inventory picked up significantly through late spring and throughout the summer. At the end of August, there were 484 homes actively listed for sale. Inventory levels are still behind the levels of 2010, 2011 and 2012, however, based on our evaluation of the absorption rate we believe Missoula has been moving more toward a normal market.

Missoula Active Homes Inventory_Aug 2014

 

 

 

 

 

5-Year Home Sales by Month

Missoula home sales decreased slightly this month to a total of 100 and under contract volume increased slightly from 150 properties at the end of July to 159 properties under contract in August. The following chart provides a monthly snapshot of total homes sold since January 2010. (Green columns represent Under Contract properties for the current year.)

Missoula 5-year Sales Trends_Aug 2014

 

 

 

 

 

 

 

Overall Short-Term Market Outlook

With more active listings on the market and under contract numbers remaining steadily high, it is evident there are currently buyers actively looking for homes to purchase and we believe we have been experiencing a normalizing market.

With low inventory in the beginning of the year buyers had little to choose from, so when a good home that was priced well would be listed, sellers were entertaining multiple offers and garnering near asking price. Over the last few months inventory has begun to increase. Now that Sellers have put more homes on the market in the last two months and since there are currently more buyers in the market than we have seen in the last several months, sellers are still getting very close to asking price. Buyers still have limited options compared to years past, thus creating the possibility of a seller getting an offer close to asking price.

Qualified buyers that are prepared to buy are looking to purchase a reasonably priced home. Sellers whose homes are competitively priced continue to entertaining multiple offers and are getting very close to asking price or more than asking price. Sellers are currently closing the sale at an average of 98 percent of asking price.

Full PDF Version: Aug 2014 Market Report

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Missoula Real Estate Report – May2014

Missoula Real Estate Market

OVERVIEW: Over the last two months, real estate activity has been on the rise after having been incredibly slow over the winter months. We are feeling more confident that we are beginning to see a stabilization of the Missoula market. Active listings, under contract numbers, and sales are all on the rise.

By The Numbers:
• Sales are up 5.7% higher than previous month
• 81% of homes sold are under $350,000
• Average home prices are up 2.8% over last year
• Overall sales are down 26.7% from this time last year but catching up fast
• Average list to sales price is hovering around 98%
• Absorption rates back to a normal market after starting the year as a buyers’ market
• Total number of homes on the market is 445 and an additional 203 homes are under contract

Buyer Recommendation: Despite the increase in homes on the market, with buyers out looking, those sellers whose homes are competitively priced have been entertaining multiple offers and getting very close to asking price. Prior to beginning or resuming your search, we recommend that you be prepared with a loan pre-approval letter and ready to look at and make an offer on the good homes immediately to avoid possible multiple offer situations. Average lender rates for mortgages have been increasing steadily and, if rates continue to rise, we anticipate a downward pull on affordability for buyers in the market for a new home. Be prepared to pay 97-98 percent of asking price, on average.

Seller Recommendation: With inventory increasing over the last couple of months, and despite the increase in buyer activity, we still recommend putting/keeping your home on the market, especially since there are currently more buyers in the market than we have seen in the last several months. However, while it seems average sold prices should increase a little during this time, it is still very important to list your home with a reasonable and competitive price.

Absorption Rate

The health of any real estate market can be recorded by absorption rates, which is the correlation between the number of active homes on the market and the number that sell per month, on average.  According to the National Association of Realtors, a normal market is six months of inventory. For the purposes of this discussion we are utilizing a 3-month average for sales.

Absorption Rate - June 2014

Inventory of Homes Listed for Sale

Over the last year Missoula has had a significant shortage of homes on the market and, even with seasonal increases in inventory, inventory levels were constantly running behind prior year levels. However, in the last two months, inventory has picked up significantly and at the end of May, there were 449 homes actively listed for sale. Inventory levels are still behind the levels of 2010, 2011, and 2012, however, based on our evaluation of the absorption rate, we believe that we may be witnessing Missoula’s ascent toward a more normal market.

ActiveHomesMonth_2014-05

5-Year Home Sales by Month

Missoula home sales increased this month to a total of 75 and under contract volume increased from 155 properties at the end of April to 203 properties under contract in May. Based on the low number of sales in the first quarter of the year, we believe there may have been some properties that were under contract at the end of March that did not end up closing until April or May.

The following chart provides a monthly snapshot of total homes sold since January 2010. (Green columns represent Under Contract properties for the current year.)

5YRSalesTrebd_2014-05

Overall Short-Term Market Outlook

With more active listings on the market and under contract numbers on the rise, there are currently buyers actively looking for homes to purchase and we believe we have been experiencing a normalizing market.

Since inventory was so low in the beginning of the year, buyers had little to choose from, so when a good home that was priced well would be listed, sellers were entertaining multiple offers and garnering near asking price. Over the last two months inventory has begun to increase. Sellers have put more homes on the market in the last two months and since there are currently plenty more buyers in the market than we have seen in the last several months, sellers are still getting very close to asking price. Buyers still have limited options compared to years past, thus creating the possibility of a seller getting an offer close to asking price.

While it seems average sold prices could continue to increase over the coming months, qualified buyers that are prepared to buy are also looking to purchase a reasonably priced home. Sellers whose homes are competitively priced continue to entertaining multiple offers and are getting very close to asking price or more than asking price. Sellers are currently closing the sale at an average of 98 percent of asking price.

FULL PDF Version:  May 2014 Market Report 
 
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Jeremy Williams
Williams & Associates
jeremywilliams@kw.com

MISSOULA RESIDENTIAL REAL ESTATE

February 2014 Market Trends

Feb 2014 Market Report

The first two months of the year have resulted in a slow start to the year in Missoula residential real estate, causing us to consider whether this is simply a seasonal slowdown or the beginning of a stabilizing market for Missoula. However, with under contract numbers on the rise and a recent influx of buyers actively looking for homes to purchase, we believe we are experiencing a winter market rather than a stabilizing market. We believe if more homes become available as we move into spring, there are buyers out there to absorb it.

The Missoula residential real estate market closed out the second month of 2014 with a total of 26 sales, with nearly three-quarters of the homes sold priced under $350,000. The overall average sold price was $253,947 and homes that closed in February were on the market for approximately 192 days before the sale was finalized. At the end of the month there were 110 homes under contract and 322 homes actively listed for sale.

Buyer Recommendation: With continued low inventory and more buyers out looking, sellers whose homes are competitively priced have been entertaining multiple offers and getting very close to asking price or more. Prior to beginning or resuming your search, we recommend that you be prepared with a loan pre-approval letter and ready to look at and make an offer on the good homes immediately to avoid possible multiple offer situations. Average lender rates for mortgages have been increasing steadily and, if rates continue to rise, we anticipate a downward pull on affordability for buyers in the market for a new home. Be prepared to pay 97-98 percent of asking price, on average.

Seller Recommendation: With inventory at such low levels for the last several months, we recommend putting/keeping your home on the market, especially since there are currently more buyers in the market than we have seen in the last several months. Until more homes are listed for sale buyers will have increasingly limited options, thus creating the possibility of a seller getting an offer close to asking price because supply is not quite meeting demand. While it seems average sold prices could increase a little during this time, it is still very important to price your home reasonably and competitively.

Highlights

Supply & Demand

The inventory of homes listed for sale in Missoula decreased to 322 at the end of February, coupled with 110 homes under contract. There were a total of 26 residential sales for the month, continuing the trend of the lowest number of sales in any given month since January 2011.

The Missoula market is still suffering from a lack of inventory and decreased again in February. Despite the gradual rise in mortgage rates, the lack of inventory is helping sellers garner between 97 and 98 percent of asking price.

Price Range

Approximately 11.4 percent of inventory turned over this month, compared to 15.8 percent last month and 20.8 percent in December. Most of the activity (roughly 73 percent) occurred in the under $350,000 price range.

Days on Market (DOM)

Homes sold in February were on the market for an average of 192 days, compared to 113 days last month and 132 days in February of last year.

Foreclosure/Bank Owned (REO)

Short sale and REO properties accounted for approximately 6 percent of the active residential listings this month. At the end of February, the MLS was reporting 12 active short sales and 6 bank-owned properties out of a total of 322 single-family listings.

Average Sold Price

Average sold price in February was $253,947, down approximately $3,200 from last month which had the highest average sold price for the month of January for the last couple of years. Prior to January, average sold price had been declining for several months. We believe this increase to be partially attributable to low inventory. However, after a year of increasing average sale prices we do anticipate a levelling out over the next several months as the fed releases its control on the interest rates interest rates begin to rise/fluctuate on their own.

The following graph shows average sold price trends since January 2012.

AvgSoldPrice_Feb14

Absorption Rate

The health of any real estate market can be recorded by absorption rates, which is the correlation between the number of active homes on the market and the number that sell per month, on average.  According to the National Association of Realtors, a normal market is six months of inventory. For the purposes of this discussion we are utilizing a 3-month average for sales.

Overall, the Missoula market performed just below a normal market this month, producing an overall absorption rate of 8.8 months in February, compared to 6.3 months in January. Under contract figures increased significantly from January, some of which may be homes that were under contract in January but did not actually close in January. The area experienced extreme weather in February which, we know in some cases, caused some closings to be delayed.

The increase in the number of under contract properties, reduced number of sales in February, and a slight decrease in inventory likely nudged up the absorption rate. We have been speculating that low inventory over the last several months could be an indication of the Missoula market’s new “normal”. We have also considered that buyers are likely doing one of three things: cancelling transactions because they unable to lock in an affordable rate before it rises; holding off buying and staying in their current homes; or, they waiting for more homes to come on the market (more choices). Whatever it is they are doing, it is clear there are not many home purchases being made. With warmer weather just around the corner, we have noticed buyers beginning showing interest in looking at homes again however, if inventory levels remain low, the absorption rate should not increase much further unless there is a continued decline in sales.

AbsorptionRateHist_Feb14A low absorption rate in your price range may indicate an opportunity to list at a higher price and, conversely, a higher absorption rate in your price range may put downward pressure on your market value.

Inventory and absorption rates are an indicator for how fast our market is recovering.  If the number of homes coming on the market is proportional to the number sold, our market will continue to strengthen.  If there is a substantial increase in homes that are not absorbed by the number of buyers in the market, expect our market to soften until they are absorbed by the buyers.

AbsorptionPriceRange_Feb14This graph demonstrates absorption rate by price range. As can be expected, absorption rates rise at each price-change increase – with one exception – homes priced from $250,000 to $299,000. It is our belief that this price-range is skewed a bit due to homes which are actively listed but not yet built.

Inventory of Homes Listed for Sale

Active HomesInv_Feb14Over the last year Missoula has had a significant shortage of homes on the market. Even with seasonal increases in inventory, inventory levels have remained below that of the last few years. At the end of February there were 322 homes listed for sale.

5-Year Home Sales by Month

Missoula home sales decreased to a total of 26 for the month of February, the lowest number of sales in three years. Under Contract volume increased from 85 properties at the end of January to 110 properties under contract in February. Based on the low number of sales in February, we believe there may have been some properties that were under contract at the end of January that did not end up closing in February.

The following chart provides a monthly snapshot of total homes sold since January 2010. (Green columns represent Under Contract properties for the current year.)

5YrTrend_Feb14

Average List-to-Sale Price

List-to-sales price, the ratio of the price at which a home sells to the price at which it was listed, signifies pricing trends in the market. (For example, if you sold a home for $100,000, sellers are, on average, accepting offers of $96,000 – $98,000, or between 2 and 4 percent less than asking price.)  When inventory increases, average list-to-sales prices generally decrease due to added competition in the market. When lower list to sales prices are seen, usually in the summer months, it can be attributed to high absorption rates, primarily because during these months there are more homes on the market, meaning more competition. In that scenario, motivated sellers might have to take less for their home in order to beat out the competition.

The following graph provides the average list-to-sale price, by month, for the last three years:

AvgList-Sale_Feb14For the last couple of years homes have been selling at 95 percent to 96 percent of list price and, for the last several months, list-to-sales price has been better than in prior years – hovering between 97 and 98 percent. The lowest list-to-sales ratio in the last year was in March 2013, when sellers averaged 95 percent of asking price. In the summer months following, this percentage moved up to 98 percent. List-to-sale price this February averaged 97 percent.

Overall Short-Term Market Outlook

With under contract numbers on the rise and a recent influx of buyers actively looking for homes to purchase, we are hopeful we have been experiencing a winter market rather than a slowing market.

However, with inventory at such low levels we need to see sellers putting/keeping their homes on the market. Since there are currently more buyers in the market than we have seen in the last several months, buyers have limited options, thus creating the possibility of a seller getting an offer close to asking price. While it seems average sold prices could increase over the coming months, qualified buyers that are prepared to buy are also looking to purchase a reasonably priced home. Sellers whose homes are competitively priced have been entertaining multiple offers and getting very close to asking price or more than asking price. Sellers are currently closing the sale at an average of 97 to 98 percent of asking price.

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Full PDFof the Missoula Market Report:  Feb 2014 Market Report