{{featured_button_text}}

An audible gasp went through the crowd on Thursday when local real estate agent Brint Wahlberg announced that the median sales price of housing in Missoula climbed 8.1 percent to a record high of $290,000 last year.

“This is (an) historic point, an unprecedented point that we’ve seen in our market,” he said, referring to the fact that the average house sold for 98.6 percent of the original list price, a higher number than even during the housing bubble before the Great Recession.

Wahlberg was speaking at the DoubleTree hotel for the Missoula Organization of Realtors’ press conference to present the annual Missoula Housing Report, an in-depth look at the statistics of the market here.

The trend of rising prices doesn’t surprise anyone, as the median sales price of a home in Missoula has increased by 39 percent in the last 10 years, but the numbers are still eye-popping. Last year was the first time since 2011 that Missoula’s price increase was considerably above the national rate of change, according to the report.

Wahlberg said the MOR’s data shows that the price increase is largely attributable to a lack of supply, especially of houses under $275,000.

“Lack of available options, especially in the affordable price ranges, leads to a more competitive market,” he said. “People are paying as close to list price as we’ve seen, even before the housing bubble. And Missoula’s strong economy is pushing the sales price up."

The total number of homes sold in 2018 fell by about 4 percent from the year before to 1,482. And in price ranges most people can afford, the availability is falling fast.

“At this point last year there were 93 listings under $275,000,” Wahlberg explained. “Our active listings under $275,000 right now is just 53 total. The amount of competitive activity you see is what’s pushing these prices. The prime market below $175,000 has just one month of listed supply, so anything between $150,000 and $275,000 is a seller’s market.”

And while affordability is getting easier for homeowners due to higher wages, it’s worsening for the half of Missoula County that rents.

Jim McGrath of the Missoula Housing Authority said that while incomes for homeowners in Missoula increased 17.5 percent in 2017 to $76,000, renter incomes decreased 4.5 percent to $28,800. Approximately 49 percent of people within Missoula’s city limits rent, he said.

“When we are talking about half of our community with rising incomes and half of our community with lowering incomes, I take note of that,” he said.

The percentage of renters in Missoula who are cost-burdened, meaning they spend more than 30 percent of their take-home pay on housing, climbed from 41 percent to 49 percent, he added.

“That means they are at risk,” he said. “In tight situations there’s not enough money to pay for transportation, savings, debt, food and education, so they are increasingly precarious. So half the people in Missoula rent, and half of those people are paying too much (for housing) relative to income.”

The Missoula Housing Authority uses a variety of funding tools, such as tax credits, to produce about 26 units of affordable housing every year. No new affordable housing was built by the MHA in 2018, but in 2020, they hope to complete a 200-unit affordable housing apartment complex, which would be the largest in state history. Still, McGrath noted that it’s not enough, because there are nearly 2,000 households in Missoula where people are paying a higher rent than they can afford.

As of September 2018, there were 1,777 households on the Missoula Housing Authority's waiting list for affordable housing vouchers that subsidize rent. That's an increase of 8.5 percent from 2017. The MHA provided 774 of these Section 8 vouchers last year.

Overall, rental prices declined 1.55 percent in 2018. The average rent for a one-bedroom apartment in a multiplex in 2018 was $581, while the average rent for a three-bedroom house was $1,136.

From 2009 to 2017, Missoula's average rent increased 5.5 percent while Montana's average rent increased 11.4 percent. Several large apartment complexes have opened in Missoula over the last several years, so the city saw an annual vacancy rate of 3.9 percent in 2018. That's slightly higher than recent years but is still considered a tight rental market.

Multiplexes saw a bigger increase in vacancy rates, but homes and duplexes had vacancy rates of 2 percent or less.

The pace of construction dipped slightly in Missoula in 2018, with multi-family building permits declining by 64 percent in the city and 48 percent in the county. Only 18 residential subdivisions, all outside of the city, were approved in 2018.

"Building costs and possible regulatory issues may have contributed to the slowdown of new construction," explained Dwight Easton, the public affairs director at the MOR, in the executive summary of the report. "Sales of new construction units declined 37 percent in 2018 while the median price of a newly constructed single-family home increased 26 percent, to $383,500."

The city's Office of Housing and Community Development is expected to unveil a broad set of policy change proposals to address rising prices.

Get local news delivered to your inbox!

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.
You must be logged in to react.
Click any reaction to login.
0
0
0
0
0