Missoula Real Estate Sales Overview:
Driven by low inventory and a 21% increase in year over year sales, Missoula’s real estate market continues to improve. 411 active residential homes for sale in the Missoula market at the end of June accounts for a 32% decrease from the same time last year. Residential home sales for both the month of June and YTD June were higher than sales for the same time period since 2008. Under contract figures have remained strong for several months now and have been climbing despite low inventory.
Buyer Recommendation: Take advantage of low interest rates before they rise and be prepared to pay approximately 98% of asking price on average. With a shortage of inventory, sellers who have their homes competitively priced are sometimes entertaining multiple offers and getting very close to asking price or over 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 the good homes immediately to avoid possible multiple offer situations.
Seller Recommendation: Inventory is so low right now that we recommend putting/keeping your home on the market. Buyers currently have limited options, creating the possibility of getting an offer close to asking price now that supply is not quite meeting demand. However, while it seems that average sold prices could increase a little throughout summer it is still very important to price your home reasonably and competitively as the seasonal influx of new listings hit the market in-step with the warmer weather. There has been a seasonal increase in competition which could hold some homes back from selling if they are overpriced. With low inventory, expect more flexibility in home prices for the lower price ranges.
Missoula’s Absorption Rate:
The health of the Missoula real estate market is 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.
Overall, the Missoula market is performing just a little better than a normal market. At an absorption rate of 5.2 months in June, the Missoula market is continuing the trend of the best absorption rates in five years.
Prior to October 2012, Missoula’s absorption rate performed at a slower rate than that of a normal market but has been performing at a better rate ever since. As the market improves, look for consumer confidence in the higher priced homes to increase as a positive indication of overall market health.
A 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.
Keep an eye on inventory and absorption rates as 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.
Inventory of Homes Listed for Sale:
Over the last several months Missoula has had a shortage of homes on the market and the trend continued through June. We expect inventory levels to increase as we continue the full swing of summer, though we don’t anticipate seeing the level of active homes to increase to prior year levels.
The following chart presents the total inventory of homes listed for sale at the end of each month since January 2010.
5-Year Home Sales by Month:
Under Contract volume decreased from 228 properties in May to 195 properties in June and, though we saw sales drop off for the winter season, home sales throughout the summer months have either matched or outpaced most all of the last five years when compared to the same months in prior years. Based on the number of homes under contract at the end of May, we anticipated seeing more homes sold in June than we did. This could be due to several factors including sale fails and/or closing dates were pushed into the next month. For the month of July, we will be watching for a greater percentage of under contracts turning into sales.
According to the Missoula MLS, 108 homes were sold in June this year, the most number of homes sold in the month of June since 2010. The following chart provides a monthly snapshot of total homes sold since January 2009. (Green columns represent Under Contract properties for the current year.)
Click here for a FULL PDF Report: Missoula Real Estate Market Report
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