Looking for a home in Missoula for under $250,000? Well, real-estate experts say you better be prepared for a battle.
While 2016 saw a record high median house price of $255,000, this year has been even more friendly to sellers -- and more challenging for buyers. This is especially true in lower priced homes, like those under $250,000.
Ruth Hackney with the Missoula Organization of Realtors says the main thing that drives prices up is simply supply and demand.
"The first quarter information we have is showing a tightening even further of our inventory," Hackney said. "From about 4½ of supply to just under three months of supply."
So how is supply calculated? Hackney says they take the number of homes sold and divide it by the number of homes available in each price range. This leaves them with an estimate of how long it would take for that supply to run out if no new homes were placed on the market.
During the recession, there were up to nine months of supply in certain price ranges.
The median house price for homes sold so far in 2017 has already topped $265,000, which is about $30,000 than it was this time last year. Hackney says a lower than usual spring supply may drive that number up even higher this summer.
"Going into the summer we usually see an increase in the amount of inventory and it decreases from the summer months," Hackey said. "So it will be interesting to see how that plays out this year, with the summer housing market."
The rising prices have prompted the City of Missoula, the Missoula Organization of Realtors, and other local partners to join forces to come up with a plan to address Missoula's housing needs.
Missoula Mayor John Engen says it isn't as simple as just building more houses, which is a challenge in itself.
"We have a wage housing gap," Mayor Engen said. "So we either need to increase wages or increase housing availability at a certain price. We're trying to attack it in both ways. It's about raising that wage base and increasing inventory, understanding where to build, how to build and what to build and how to do so effectively is another piece of the puzzle."
"It's not going to be one answer," Hackney said. "It's going to be a mixture of ten. It's going to be a lot. It's going to build the right kind of momentum to make an actual change happen so that we don't turn into a community where you have to live in Florence to work in Missoula."
Hackney says typically, supply is high this time of year as sellers are looking to sell. But so far this year, that supply has been significantly lower than in years past. Hackney told MTN News that she's interested to see if a great seller's market will motivate more sellers to list as a result.
"I think overall you're just going to continue to see some more competition for the same amount of listings," Hackney said. "So having somebody to represent you is a really important part of that especially if you're a first time or move up buyer. Ensuring you have somebody there to negotiate on your behalf is incredibly important."
Hackney says they hope to have the findings of their study revealed to the public by the end of the summer. From there it will be up to elected officials and developers to put those plans into action.