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Missoula housing prices rose nearly 23% in 2021; Flathead prices also spike

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Local Economies 1

A real estate sign sits at the entrance of a subdivision near Stevensville in February of 2021. Housing prices and availability continue to make an impact on the economy in Missoula and Ravalli counties.

The median sales price of homes sold in the Missoula area in the first six months of 2021 was $430,000, according to a new report from the Missoula Organization of Realtors.

That's a 22.9% increase over the median sales price for all of 2020, which was $350,000.

"Supply shortages of existing homes and limited number of new construction units are contributing factors in the continued increase in median sales price," said Dwight Easton, public affairs director for the Missoula Organization of Realtors, in an email.

The rental vacancy rate for the first half of 2021 in Missoula was 1.6%. A vacancy rate of between 4% and 5% is considered healthy by most experts.

"The ongoing tightening of the housing market and low inventory of rental units continues for the ninth consecutive quarter," Easton said.

Because buyers are forced into bidding competitions, the average sales price was 104% of the average list price. The average number of days a house sits on the market in Missoula has fallen 44% to just 86 days since this time last year.

There is about a three-week supply of homes available on the market, Easton said. 

"A normal range is a supply of housing to support three to nine months of demand," he said. "The estimated supply gap at this point in time, using the midpoint of a normal range and current sales, is a deficit of 535 homes."

The neighborhoods with the lowest inventories are the South Hills, downtown and the Northside, and the Target Range/Big Flat area.

Active listings have declined 70% since this time last year, and there were only 107 homes for sale at the end of June. 

Easton said the city and the county have made improvements on getting more housing on the market.

"Through June, the city has approved permits for 778 housing units, a 41% increase over the entire year of 2020," he said. "In Missoula County, final plats approved through June has increased by 27.3% year over year, creating 144 lots."

In the first quarter of the year, the median family income in Missoula was $84,000, while the median family income needed to purchase a median-priced home was $94,000.

Missoula isn't the only place in western Montana seeing escalating prices. In Ravalli County, home prices jumped 44% from the first quarter of 2020 to the first quarter of 2021.

In Flathead County, the median sales price of homes sold in June of this year was $522,500, a 59% increase over June of 2020.

Kelsey Malsam is a 33-year-old Havre native who serves at two restaurants in the Whitefish area. In late July, her landlord taped a yellow “notice to vacate” on her door with no reason given. She has until the end of August to find something in an extremely tight rental market in a tourist town.

“I had switched to a month-to-month lease in January of 2020 because I had been having a hard time finding roommates and I didn’t want to commit to another year,” she said. “I wasn’t really expecting to get evicted in the middle of summer.”

Although there's been a federal eviction moratorium in place during the pandemic, landlords have still been able to simply let a lease expire and evict tenants that way.

Malsam has two jobs right now because she’s been struggling to pay rent, she said. She found only one apartment available in Whitefish that’s within her budget, and she was told she’s 10th in line on the waiting list. There isn’t anything available in nearby cities either.

“People looking for more affordable housing have already moved to Columbia Falls,” she said. “Whitefish is now turned into out-of-staters and wealthy people."

Almost every day, Malsam gets a firsthand look at how many out-of-staters are looking to buy property in Montana.

"Every other table I serve at both restaurants comes in with a real estate book," she said. "It’s such a weird time. I’m serving people while I’m getting evicted and they’re looking at $4 million houses.”

In the end, she said her best option is probably going to be to move back in with her dad.

“I’m not really that proud of that, but luckily every other person I’ve talked to is feeling the same way as me,” she said.

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