BY THE NUMBERS:
- Homes sold October: 124;YTD 1,176
- Median sold price October: $297,500;YTD: $298,000
- % homes sold under $350,000September: 65%
- Homes actively listed at end of September: 445
- Months of inventory at end of September: 3.87
SUPPLY & DEMAND FOR MISSOULA RESIDENTIAL REAL ESTATE
Demand for Missoula residential homes has stayed strong in the first three quarters of 2018. At the end of October, a total of 1,176 homes have been sold year to date mirroring sales in 2017.
The strength of 2018 home sales are in direct proportion to inventory. Lower than expected inventory in many price ranges has slowed home sales compared to predictions. Many sellers have elected not to put there home on the market in fear of not knowing if they would be able to find a suitable option causing a grid lock.
August and September have seen more homes coming on the market than selling. The increase inventory is a welcome change giving buyers more options.
ABSORPTION RATE: SUPPLY AND DEMAND
One of the main indicators of a healthy Missoula real estate market is the absorption rate. Absorption rate is an indication of how many homes are on the market compared to buyers. It is calculated by determining if no other homes came on the market, how long would it take to sell all homes based on the number of homes that are selling previous months. For example: If there are 100 homes on the market and 10 sell every month, there is 10 months of inventory.
According to the National Association of Realtors, 6 months is a normal market. If Missoula home sales are below the 6 month line it is a sellers’ market and if it is above the 6 month line it is a buyers’ market.
Missoula continues to stay in a strong sellers market and very similar level as 2017.
Buyers Recommendations: Watch interest rates and absorption rates as in indication of affordability. For every 1% interest rates increase will give you 10% less buying power to keep the same payment. If rates go from 5 to 6 % and you are buying a 300,000 home, you will not have to buy a $270,000 home in order to keep the same payment. If absorption rates stay under 6 months home prices will continue to increase.
Sellers Recommendations: If you are thinking about selling any time in the next 5 years, now is the best time to strategize. Home prices are at an all time high and pushing affordability in Missoula area. Don’t miss you window to get top dollar for selling your home now and getting into the next home at a low rate.
Click Here: Full October Market Report 2018
Jeremy Williams | Keller Williams Real Estate | 406-926-6767