With home prices inching up and sales rising, Missoula-area real estate agents heard a modest but positive presentation Thursday during the 2013 Missoula Housing Report.
The number of homes sold in Missoula increased by 22 percent in 2012, the first increase since 2009. Median sales prices inched back up to 2006 levels, with the average being just around $209,000.
“We have seen some real growth in 2012,” said Collin Bangs, chairman of the Missoula Organization of Realtors housing report committee. “I think what we’re seeing is the new normal. ... It seems to be stabilized, moved from just a buyer’s market to more of a seller’s market.”
The report, presented by a handful of Missoula Organization of Realtors panelists at the DoubleTree Hotel, included a call to action by Bangs as the city and county work to implement a 10-year plan to end homelessness.
“We have a lot of reasons to be optimistic,” Bangs said. “But don’t forget those who cannot pay for housing. The job isn’t finished yet.”
The optimistic portion of the report included the fact that compared to 2011, sales were higher in all quarters of 2012. Roughly 325 homes were sold in the peak third quarter, compared to around 260 in the third quarter of 2011.
Total sales were close to 2003 levels, but still lower than the 2006 spike.
Housing supply numbers have been stabilized by stronger sales. Missoula’s “absorption rate” – calculated by dividing the number of active listings by the monthly sales to show a time-on-market statistic – hit a high of 30 months in 2010 after the first-time homebuyer credit and others flooded the market.
The reports show Missoula now has around a 5.5 percent absorption rate. Normal range is between three and nine months, the report said.
A neighborhood-by-neighborhood comparison showed home sales increased in nine of 12 neighborhoods across Missoula. Most neighborhoods also have seen a median home price increase, the report said.
Missoula saw an increase in distressed home sales in 2012, including a 6 percent increase of net foreclosures in the county over 2011.
However, overall numbers show the distressed sales increase was diluted by the increased number of normal sales, said Brint Wahlberg, presenter and broker with the Wahlberg Team for Windermere Real Estate.
Prudential Montana agent Rick Jessen agreed that 2012 report was a positive one.
The market is “trending upward slowly, not at a fast or significant pace,” but the 22 percent increase in sales and the 2 percent increase in prices are two things Jessen said were particularly positive.
“There’s a lot of activity in the under $200,000 (price range). That (inventory) seems to be drying up. More and more people are getting qualified for loans, so anything listed around $200,000 is getting a good look,” Jessen said.
The building industry should be helped by the fact that single-home building permits were up in both the city and the county in 2012.
“We’re seeing demand for single-family homes up in both jurisdictions, that’s important,” said Nick Kaufman of WGM Group, who gave the housing supply and development portion of the presentation.
An influx of mulitfamily housing units around the city helped lower rental rates in 2012.
The number of renters versus homeowners continued to grow in Missoula in 2012, with 60 percent of the population living in homes they own and the rest in rentals. Vacancy rates increased in 2012, hovering between 3 percent and 4 percent and spiking in the fourth quarter to 3.9 percent.
Sheila Lund of First Security Bank highlighted “great” interest rates for buyers and a handful of new federal programs that are making things busy for bankers around town.
“Overall, the mortgage climate in Missoula has been friendly. Lenders have stayed busy. Refinances are busy, but sales taking place, too,” Lund said.
Vicki Corwin of Stewart Title attended Thursday’s presentation, saying she’s noticed the positive trends at her workplace.
“We’ve gotten a lot busier and it’s all sales,” Corwin said. As for what 2013 will bring, Corwin said she doesn’t have any predictions. “But I hope it stays busy.”