MISSOULA – There is some encouraging news on Missoula's housing front as the 2023 annual report shows the market is slowly leveling off.
But it also shows there aren't enough homes available at the price point where most people could afford to buy one.
The median price of a home in Missoula was $520,000 at the end of 2022 which marks a 15.6% jump from the year before.
However, that price point is actually lower than what it was at the end of the third quarter, which shows that prices are leveling off.
In comparison, Kalispell's median home price is higher than Missoula's at $583,500.
Below are some key takeaways from the Missoula Association of Realtors (MOR) annual report about what's happening in Missoula’s housing market.
- Increased interest rates slowed the housing market
- Demand continues to outpace supply for homes below $750,000
- The rental vacancy rate has leveled off but remains low at 1.2% which is below what is considered a 'healthy' rate of between 5% and 8%
- More than 400 income-qualified homes are coming in 2023
The Relators we talked with at Wednesday’s presentation said there are virtually no homes to buy in this area for less than $150,000.
The data also shows there is almost nothing to be found in the $150,000 to $300,000 price range.
However, there is more inventory for houses priced at $750,000 and above.
The sweet spot is for homes priced between $300,000 and $600,000 — and those are also hard to find.
Even as things start to level off, price is still a huge barrier, especially with mortgage rates doubling since the end of 2021.
"The Missoula median household income is about $80,000 and when you compare that to our affordability index for the median sales price of $520,000 to be considered perfectly affordable, the income with a 5% down, was almost double what the Missoula median income currently is. Put 20% you still need to make 40,000, 50,000 more -- [the] biggest disparity to income versus median sales prices." - MOR Data Committee member Brint Wahlberg
MOR President Carly Kelley McDonnell says there is progress to address the supply shortage — which includes public and private developments — that will supply more than 400 new homes this year that she says Missoulians can afford.
The data also shows people looking to move from Missoula County are overwhelmingly checking out properties in Ravalli County. Additionally, out-of-state interest right now is coming from the Phoenix, Denver and Seattle areas.
Click here to view the Missoula Association of Realtors annual report.