Real estate market ready for summer season

INTEREST RATES, CASH AND BUYER CONFIDENCE

Thirty-year mortgage rates have more than doubled this year, and after running up above 7%, now have settled out around 6.5%, and 15-year rates are currently at 5.95%. Compared to prior decades current mortgage rates are good, however over the past 8 years most homeowners have obtained new mortgages with 3 to 4% interest rates, and many have been unwilling to sell their current home and give up their 3% mortgage rate and move on to a new home with a 6.5% interest rate. This has resulted in less homes being placed on the market and less market turnover, slowing the entire housing market.

It may seem that higher interest rates would cause real estate prices to drop, but minimal inventory is keeping prices high. That’s good for current owners but difficult for someone looking to buy.

Although there are a lot of buyers sitting on cash, they are less willing to use cash to purchase real estate than they were previously. This is primarily because they can now receive over 4% interest on their savings and an overall lack of confidence to part with their cash resources given the current economy.

NEITHER A BUYER’S MARKET NOR A SELLERS MARKET

The real estate market in the Seeley-Swan Valley is currently neutral, not favoring buyers or sellers. There is a very short supply of homes and land currently on the market. Although the number of homes currently on the market in Seeley Lake has remained steady over the past nine months, most are no longer selling quickly as they have in the past. Looking at homes currently on the market, the average is 192 days on the market, over six months. Although the number of months of housing supply has risen over the past year, it is largely because homes are taking longer to sell, not because there is a dramatic increase in number of houses coming on the market. As a result, property values in the Seeley- Swan have remained steady thus far in 2023. The steep curved price increases that occurred earlier in the COVID-19 pandemic have subsided and have now flattened and stabilized.

MORTGAGE PAYMENTS AT CURRENT INTEREST RATES

In the past 12 months, the Federal Reserve has raised interest rates 10 times. Rates are currently around 6.5 % for a 30 -year fixed rate mortgage and 5.95 % for a 15 -year fixed rate mortgage. For each $100,000 borrowed at 6.5% the monthly principal and interest payment would be $632.

WHAT WILL YOU GET FOR THE MONEY?

Seeley Lake – A completely refinished mountain cabin on 2.8 acres in the Double Arrow Ranch, 3BR, 2 BA, 1200 sq ft, pine finished interior, heated tile floors, new cabinetry, sauna, and detached shop/ garage. $535,000.

Condon – 1295 sq ft total comprised of 2 site-built cabins on 1.62 acres on the Swan River, along with a workshop and carport $625,000.

Ovando- A 1670 sq ft 3BR, 1BA home located on 2 lots totaling just under an acre on Main Street. The home is finished with hardwood floors, multiple heat sources, covered front porch and flagstone patio. $375,000.

AFFORDABLE HOUSING IN SEELEY LAKE

With the average list price of a home in Seeley Lake being around $650,000, I am often asked if affordable housing is a possibility in Seeley Lake. My response is that unfortunately, affordable housing may never be a reality in Seeley Lake. I attribute this to several factors, the lack of available land for development, high cost of development – purchase of underlying land and engineering, installation of roads, utilities, and infrastructure. High density housing such as apartments, condominium units, housing clusters are prohibitive because of the amount of land required to support a septic system.

Another limiting factor is that the Seeley Lake Water District has less than seven new water hook ups available for development, then they are at capacity.

THE LAST 30 DAYS BROUGHT TEN NEW LISTINGS

It has been a common occurrence for buyers to wait until spring to buy as new listings begin to hit the market. This spring we saw 10 home listings come on the market. Three of those are currently pending sale. It is not anticipated that we will have significantly more listings added through 2023.

GOOD NEWS FOR RENTERS AND THE LOCAL WORK FORCE

Over the past few years as values increased dramatically, many homes that were rentals providing local housing options had the lease terminated and the homes were sold. Now with declining home prices and longer days on market to sell homes, property owners may become more interested in renting their home and waiting out the market. Declining home values will result in investment returns in owning rentals looking better than they have in the past for home investors.

SEELEY LAKE RESIDENTIAL SALES FAST FACTS

Thus far in 2023, there has been a total of eight homes sold. There were 11 sold in the same period last year. There were 45 total homes sold in 2022. In the past year, the average home price in Seeley Lake rose slightly from $575,000 to $588,000. The average home closes in 185 days after being placed on the market in Seeley Lake. There are currently 15 homes active on the market. The homes range from $535,000 to $12 million. There are currently five homes under contract to be sold.

CONDON RESIDENTIAL SALES FAST FACTS

Thus far in 2023, there have been no homes sold. The same period last year resulted in three homes being sold. In the past year, the average home price in Condon has risen to $915,000. There are currently 8 homes active on the market in Condon. Three of these are listed over $1 million, and the least expensive is $625,000. One home priced at $459,000 is under contract to be sold.

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.

 

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