Missoula Real Estate Market Report July 2012
For years savvy home buyers have been waiting on the sidelines for the perfect time to purchase a home – the time when home values are low but the market is building in a positive direction. The goal is to purchase right before the Missoula real estate market starts to appreciate, therefore maximizing appreciation and minimizing the time needed for the investment to generate an acceptable return.
Whether a seasoned investor or first-time home buyer, nobody wants to purchase a home only to find out it is worth less the very next year. There is no crystal ball when it comes to home appreciation, especially when so many of our investments reley on a global economy. However, there are trends that can that can help us make educated decisions and these trends are why I feel the next 4 months are going to be the best time to buy a home.
Top reasons the Next 4 Months will be the best time to buy a home!
1 .Five year sales trends
Missoula real estate sales are up 33% over this same time last year, showing strong, consistent growth that we have not seen in a few years. Real estate sales should slow down as we head toward the end of the year, however, expect sales to continue to outperform last year’s numbers. Next month, watch for a higher percentage of year-over-year sales as a sign of sales momentum heading into fall. If inventory continues to decrease, look at median and average sales price as an indication market growth.
Sales figures are for the Metro Missoula area only and do not include areas such as Lolo , Clinton, and Frenchtown.
Missoula’s housing inventory has been decreasing over the last month. This is a common trend toward the end of the year, however, we usually see this start later in the year. In Missoula, homes in several price ranges are selling faster than they are being replenished. Low inventory combined with higher sales is a sign of a growing market. Look for inventory to continue to decrease as we head into fall. Buyers should expect multiple offers on well-priced homes.
3. Interest Rates
Interest rates have remained incredibly low for an extended period of time. As the stock market rebounds and the elections conclude, look for interest rates to increase. Rates will have a huge impact on a buyer’s payments and purchasing power. For example, the difference between a $200,000 home at 3.5% compared to 6% is several hundred dollars a month. If price and/or rates increase, buyers will lose purchasing power. Click here for more
4. Absorption Rates
Absorption Rates are an indication of the health of the real estate market. According to the National Association of Realtors, a normal market is 6 months of inventory. Price ranges with more than 6 months of inventory indicates more of a buyer’s market. Coversely, homes in price ranges under 6 months of inventory are in favor of a seller’s market. The overall absorption rate for Missoula has been decreasing at a steady rate. Look for absorption rates to continue to improve as inventory decreases in the winter months.
Market trends indicate that the market is on the verge of rebounding. If current trends continue, it stands to reason that prices should follow. If you are in the market to purchase a home, the next 4 months could be your best time to maximize your value.
Williams & Associates | Keller Williams Realty