MISSOULA – The trend continues as it’s more expensive than ever to buy a home in Missoula. Earned income is also up, but housing experts say it’s not catching up fast enough.
The 2019 Missoula Housing Report illustrates a continuing tight supply of homes that the average buyer can afford which has led to the highest median home price ever seen in Missoula — $290,000 — which marks about an 8% increase over last year’s previous record setter.
Brint Wahlberg with the Missoula Organization of Realtors says that the median household income in Missoula also went up, but it’s still far below what it costs to afford the average home.
“While wages went up, we had some good economic factors in Missoula, but rising wages did not meet rising median prices. So Missoula’s market as a whole got less affordable,” Wahlberg said.
He adds that there are plenty of homes available in the Missoula area, but ones listed under $350,000 are hard to come by and go up quickly when they get onto the market.
“What happens is when the right property comes up, people are bidding as close as full price, or over full price, and our stats show that. The houses just keep going up, we set the new benchmark, and away you go,” Wahlberg said.
So why does it continue to get worse for buyers? Wahlberg says it all started during the recession in the late 2000s.
“During the times of the real estate bubble and the economic recession, we as a country and Missoula as a city as well too, did not build homes at the rate we needed to. Especially, affordable, entry-level type construction homes. So we fell way behind,” Wahlberg said.
And how long will it last? Wahlberg says it could be awhile.
“So will it work itself out? In time, yes. But the trick is that the cost to build, develop, construction, and the availability of skilled labor- all those things come into play and it’s not something that solves itself overnight. So this is a trend we will probably see for years to come,” Wahlberg said.
With current interest rates and a 5% down payment, the report estimates that a household would need to earn about $96,000 a year to afford a $290,000 home.
Click here to view the full report.