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
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.
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.
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.)
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