The Real Estate Market in the Valley is Getting Hot

REAL ESTATE TODAY

Real estate sales in the Seeley Swan and Blackfoot valleys are on a run with dramatic increases in both land and home sales over the last 12 months. Although the number of both homes and land that has sold has increased dramatically, price appreciation is a steady 3.4 percent. The current market is very healthy and represents a rising market environment that has led to investors and buyers gaining confidence and returning to purchase local real estate.

The investors have been absent from the local market for more than seven years. There are some great land deals in the Double Arrow Ranch, starting with two, one acre lots in Phase 2, with paved roads, city water and utilities at the road offered for under $30,000 each.

There are five real estate brokerages and thirteen licensed real estate agents in the valley today.

In the trailing 12 months, they have combined for nearly $58 million dollars of sold real estate volume in the valley. That is an increase of more than 15 percent of the sold real estate volume in 2014, which was considered a great year.

Active inventory of homes and land currently listed for sale has been dropping. The dwindling availability will continue to result in price appreciation, especially on homes. In the present market, there is good demand for lakefront, lower priced land and, the sweet spot for home sales is in the $180,000 to $325,000 range.

A spec home is a home that is built new and offered for sale by a builder or an investor. There is currently one spec home for sale.

There is strong market appetite for new or newer, single level homes with some custom finishes that could be offered in the $250,000 to $325,000 range. This offers the opportunity for a builder or investor to build and offer a spec home to the market. There are several pieces of land available in the $25,000 to $45,000 range that would work well for this type project.

RESIDENTIAL SALES

Currently there are 51 homes currently for sale, plus 11 homes that are currently under contract to be sold. This is the lowest inventory number we have experienced since the real estate boom in 2006. Interestingly, at one point in 2009, there was five years of home inventory on the market, now there is less than one year worth of inventory currently for sale!

The average of 334 days on market for homes sold in the last twelve months, represents the fact that many homes are selling that have been on the market for several years. Once again, this is a good trend.

Also, when days on market numbers go down, in this case from 355 to 334 indicates a strong market.

Home sales have been driven by buyers with all cash, or large cash downs as well as "cheap money", financing currently available at mortgage rates that are near their lowest point in 30 years. Interest rates are currently around 3.625 percent for a 30 year fixed rate mortgage and 2.875 percent for a 15 year fixed rate mortgage. These rates are the lowest many have seen in their lifetime.

Many buyers can still qualify to purchase homes for very little down payments under government and private loan guaranty programs such as Rural Development, Montana Board of Housing, HUD, and Neighborworks. With credit approval, it remains possible to obtain a loan at $455 a month per $100,000 borrowed- plus taxes and insurance.

It is also a great time to consider refinancing. For example, if you were to refinance your existing mortgage of $200,000 at 5 percent interest and get it reduced down to the current interest rate of 3.625 percent, your payment would be reduced by around $160 per month.

LAND SALES

Vacant land sales are substantially improving. There are currently 87 land parcels for sale. The listed parcels have a median listing price of $231,000 and an average of 420 days on the market. This means there is currently 42 months of land inventory for sale at the current sales pace. It is anticipated that the pace of land sales will continue to increase as home inventories are reduced.

WHO IS BUYING REAL ESTATE AND WHY

Lake properties are selling very well and inventories are very low. Usually, the lake properties are being purchased by Montanans for their families. Homes in the Double Arrow Ranch and around the valley are being purchased for two primary reasons – the first group are Montanans purchasing weekend/ summer homes and cabins. Most of these buyers are from Missoula, Helena, Great Falls and Butte as well as farmers from the farming areas north of Great Falls. The second group are retiring or those who haven't reached an age to traditionally retire but have done well financially out of state.

Buyers are buying here, as we enjoy and offer many qualities of life that can't be found anywhere else in Montana or the world. Our many lakes, streams, trees, wilderness accesses, wildlife and huge holdings of public land all provide recreation and scenery beyond compare. The quality of life in the valley beyond recreation is well known. Our residents are caring and kind and are quick to help those in need. We have a first class, nationally recognized public school system offering a fantastic curriculum including a focus on outdoor activities and education. We have cultural organizations and events that attract attendees from all over the world.

If you have any questions regarding the local real estate market or the purchase or listing of property, please contact your local real estate professional.