MISSOULA — While it remains to be seen how the COVID-19 pandemic and economic downturn will impact Missoula's housing market going forward, there's no question the city continued to feel the impacts of a tight supply of housing last year.
That's one of the takeaways from the Missoula Organization of Realtors (MOR) 2020 report, an important annual snapshot of Missoula's housing market. The report was compiled prior to the significant impacts being created by the COVID-19 pandemic in recent weeks.
The report finds that in 2019, Missoula home sales were on pace with the past several years, although short of the record set in 2017. Sales of multi-family units like townhouses and condominiums also remained strong.
However, the report shows Missoula continued to fall behind when it came to creating new housing to meet a population that grew by more than 9% between 2009 to 2018.
MOR says new housing construction remained essentially flat in 2019, with 459 new homes. But total housing permits for single family homes was down 22% over the five year average, which multi-family permits were down 42% over the five year average.
That pushed the housing supply, tracked as the "absorption rate", down to as little as three months in 2019. Consequently, housing prices continued to climb, with the median price hitting a new high of $315,000 last year. That's the ninth year that key indicator has climbed.
Land for development continued at a premium as well, with the median price of residential lots in the Missoula urban area increasing by more than 28% to $115,000. Sales of residential lots dropped by 16%.
Those factors continue to impact who can afford to buy homes. MOR. notes "it would be a struggle" for a family making the median income of $51,375 to $73,313 to be able to buy a median priced home, even if they could secure a 20% down payment.
The full report can be viewed here.