No shocker here: Housing is getting less affordable in Missoula County every year.
Combined with a dwindling supply of affordable homes, Missoula saw its most active year on record for both home sales and new construction in 2017, while the median sales price of homes increased by 5.2 percent to a record $268,250.
It’s the seventh year in a row that housing prices have risen here, a jump of nearly 30 percent since 2010. It was a good year for real estate agents in town, as an unprecedented 1,543 homes were sold, including a very active third quarter when the valley was choked with wildfire smoke.
That’s all according to the 2018 Missoula Housing Report, an annual collection of data compiled by the Missoula Organization of Realtors (MOR) and other partners as a community service.
Rental prices also increased in 2017 in nearly every category after a dip in 2016. The average rent for a one-bedroom apartment in a multiplex was $632 while the average rent for a three-bedroom house was $1,130.
“We will be releasing a survey result next week to the community and the City Council that tells us that the most pressing problem in Missoula today in the eyes of citizens is housing — housing affordability and access to housing," said Mayor John Engen. "And the city of Missoula is taking that seriously.”
Engen said Missoula is in the best position it’s been in a very long time to address this critical community concern.
“We’re doing that in some meaningful ways,” he said. “Today we’ll have probably the fifth meeting for our Housing Steering Committee, and the city of Missoula is ready to make two critical commitments to addressing the issue of affordable housing and access to housing."
The first action, he said, is addressing policy changes.
"We are looking at every way we stand in the way of quality development, quality housing being produced in our community," he continued. "We have worked over the years to break down some of those barriers, but many still exist. And this council and this community, I believe, is ready for us to break down more of those barriers in a systematic and formal way through policy, resolution and ordinance.”
The second way is that the city is “willing and able” based on citizen input to make “direct investment in housing.”
“We are not going to move the needle on the numbers that you’re seeing here today without public investment in housing,” Engen said. “The form that takes is yet to be determined. But we know that we have enough support and enough resources that we can begin to buy down the cost of housing for folks in our community in lots of different ways to really make a difference.”
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Brint Wahlberg of the MOR and Windermere Real Estate was joined by Paul Forsting of Territorial Landworks, Jim McGrath of the Missoula Housing Authority and Brandon Bridge of the Bureau of Business and Economic Research to give a detailed presentation on the data behind Missoula’s lack of affordable housing.
“Last year there were no condo sales or townhome sales under $100,000,” Wahlberg said. “It hasn’t been a big part of our market for quite some time, but now it’s pretty much completely disappeared.”
However, the number of condos sold went up 24 percent over 2016. The median sales price for condos last year in Missoula was $205,600. It was $236,000 for townhomes and $305,140 for detached homes.
McGrath said that approximately 47 percent of Missoula renters and 25 percent of Missoula homeowners are “cost-burdened,” which means they spend more than 30 percent of their income on housing costs. That leaves little room for education spending, health care, retirement savings, food, clothing, transportation and emergency bills.
“The demand for housing remains high,” he said. “If you look at folks that are rent-burdened, the number of units that are developed to be rent-restricted and affordable to folks averages about 30 units a year (in Missoula). That’s 301 units in the last 10 years, so that production is fairly low relative to what we need to see.”
The estimated median income for all households in Missoula County in 2016 was $46,550, which is below the national average of $57,617. While Missoula homeowners have a median income of $64,612, renters have less than half that, with a median income of $31,146. Wages have stagnated in Montana as housing prices have risen steadily in the last decade.
And even if people can afford a home, they often can’t find one in Missoula due to a chronic lack of inventory. Based on population estimates from the U.S. Census, the number of households county-wide increased by 2,944 between 2010 and 2016, but only 2,532 housing units were built in that same time.
McGrath said 1,637 people were on the waiting list last year for a Section 8 voucher, a federally subsidized housing program for low-income people. Homeword, a local housing nonprofit, and the MHA were able to preserve a combined total of 257 rent-restricted housing units last year by purchasing two large housing complexes in danger of being converted to private, market-rate rentals.
“We could have seen, in one moment, nearly a decade’s worth of affordable housing go away,” McGrath said. “We were fortunate, and we need to applaud the vision of our nonprofit housing folks for stepping forward and being able to keep those in the game.”
The number of homeless people in Missoula is trending downward. As of January 2017, there were an estimated 344 homeless individuals in the city, which is a 12.9 percent decrease from the 395 individuals counted the previous year.
The Missoulian will have more on the housing report in the coming weeks. The full report can be viewed at missoularealestate.com/market-trends/missoula-housing-report/.