A Year in Review – 2013
Over the last two years, Realtors and analysts across the country have repeatedly emphasized the recovery of the housing market – with many agreeing that it was one of the stronger points of the economy last year, increasing household wealth and spurring new home construction. Low interest rates played a huge role, giving buyers more buying power than in years past, however, interest rates have been on the rise since early summer causing some to wonder if sales will be hampered. We believe that while increasing interest rates are important to consider, and they HAVE been edging up over the last couple of years, rates are still hovering near 30-year lows. While rising rates will impact home sales, we anticipate sales will decline only modestly due to this, if at all. Missoula continues to experience very low inventory levels, which we believe will be the primary driver behind any decrease in sales.
Residential home sales in the Missoula area have been on the rise over the last two years. This is especially impressive for 2013 when low inventories and an escalating interest rate are considered. For the year ended December 31, 2013, there were a total of 968 residential home sales in the Missoula market, reflecting the most number of homes sold for the year since 2007 when more than 1,000 homes sold during the course of the year. The majority of home sales in 2013 occurred in the Mullan Rd. West area with 131 sales, followed by Central Missoula with 121 sales and the South Hills area with 96 sales for the year.
Overall, homes were on the market for an average of 99 days. Homes in the South Hills sold the fastest, with an average of 13 days on market (DOM) followed by the Rose Park/Slant Street area with an average of 70 DOM and the University District with 73 DOM. Homes in the Upper Miller Creek area took the longest to sell, at an average of 175 DOM, followed by homes in Big Flat area which averaged 165 DOM.
Average and Median home prices have been increasing steadily over the last two years. Sold price in the Missoula residential market for 2013 averaged $256,647, with a median sold price of $233,500.
Throughout the course of the last twelve months, sellers have been averaging 96-98 percent of asking price. When looking at the year as a whole, on average, sellers garnered approximately 95.2 percent of asking price, with the largest disparity between asking and selling prices being in the Blue Mountain and Big Flat areas. Sellers in the Expressway-N of Broadway/S of I90 area saw the smallest difference between asking and selling price, averaging 99.7 percent of asking price for the year.
Bank owned (REO) and short sale properties accounted for fewer listings in the Missoula market than in the last couple of years. Earlier in the year, anywhere from 7-10 percent of active listings were either an REO or short sale and, after April, accounted for no more than 4-5 percent of active listings. In terms of sales, there were a total of 42 short sales and 66 REOs sold throughout the year. The majority of REO homes sold were in the Mullan Rd West, Central Missoula, and South Hills areas. Short sales tended to be spread around the market area a little more evenly, with the South Hills/Linda Vista areas having just a couple more short sales than in other areas in town.
Over the last twelve months, the Missoula residential home market has experienced one of the slowest years in terms of active listings. By this we mean that fewer sellers put their homes up for sale in the last year, causing a shortage of homes for buyers to choose from. However, with fewer homes on the market sellers were, on average, selling their homes for very near asking price or, sometimes, over asking price.