MISSOULA - As troubling as the latest Missoula housing report is, 2022 isn't showing a reversal of fortune from last year, as the median home price tops half-a-million dollars for the first time in the first quarter.
That threshold is one of the newest, and most stark facts showing how out-of-balance Missoula's housing market has become.
The newly-released report from the Missoula Organization of Realtors shows housing supply hitting an all-time low for both the metro area and the surrounding county. But it's the dollar signs that are the most attention grabbing. In 2020, MTN News reported the median price had topped $300,000. Just two years later you'd be the luckiest home buyer in the Garden City to find that house.
"Year end median sales price in Missoula metro was $450,000," lead report author Brint Wahlberg told his colleagues Tuesday. "End of first quarter median sales price in Missoula $500,000. So in three months up another 50,000."
"Now put that in perspective. Last year our median sales price went up 100,000, so we've already done half of what we did in one year and three months."
The Realtors say the "absorption rate", the number of homes listed for sale divided by actual sales, plunged to less than a month in 2021. In normal conditions that be three to nine months.
"Those that want to buy are seeing less and less things to buy in this market. We have not had a steady amount of normal supply in our market now since quarter one of 2016," Walberg explained.
Not only are homes in the "affordability index" found in just two or three of Missoula's 27 neighborhoods, but many homes are selling above list prices. And Wahlberg says cash sales are up.
"That's over one-fifth. So one in every five homes that we see right now in our MLS are selling for cash in the Missoula metro. At least they were last year."
And while building permits are up in some categories, the gap in supply was well over 6-hundred homes at year's end.
"We're not replenishing that inventory with new projects that meet today's standards and requirements of the city," Paul Foresting, a Senior Land Use Planner with IMEG Corp reported. "These are older projects that have different standards, different requirements, and so the question is, how do they fare in the new environment that we have for permitting?"
Interest rates are above last year's record 3.25% on a 30-year fixed mortgage. That climb, and inflation might impact the market, but will it be enough to put out the fire? Wahlberg isn't sure.
"As interest rates continue to climb and inflationary pressures really hit more broad spectrums of our market, it's it's going to get into housing. And so it's probably a sign that these type of gains aren't a thing of, it's not a long term process that we're going to see," Wahlberg said. "We've got to see something that's going to blunt this sooner or later."