Signs of an improving real estate market

The good news is that home sales have picked up in the Flathead Valley, reflecting the recovery seen across the U.S. The bad news is that the real estate market here continues to lag behind both the state and the U.S.

According to figures provided by Kalispell appraiser Jim Kelley, the number of residential sales in the Flathead for the first seven months of the year is 32 percent higher than for the same period last year. This marks a slow climb back from a low of about 950 units for the year in 2009 to about 1,375 projected for this year. The high point was about 1,800 units sold in 2005.

“I think a lot of it has to do with people getting more optimistic about the markets,” Kelley said. “People think that now is the time to take advantage of the lowest possible prices.”

The median price in the Flathead for January through July was $180,900, about 4.8 percent lower than for the same period last year. More than a third of the homes that sold were bank-owned with a median price of $145,000. Another 7 percent were short sales with a median price of $140,000.

“What I’ve seen is that prices really bottomed out in 2011,” Kelley said. “They’ve come up a little, but they’ve pretty much leveled off. I don’t think prices are likely to increase in the immediate future either.”

There are other signs of an improving economy — unemployment in the county is at 7.9 percent, its lowest level since the recession began four years ago. The tourist industry is healthy — July visitation in Glacier National Park was 9.6 percent higher than last year, and July passenger numbers at Glacier Park International Airport are also about 10 percent higher.

Home prices may be depressed because buyers are reluctant to pay the asking price when so many low-priced properties are on the market, including foreclosed and bank-owned properties, Kelley said.

“If a home is priced at a reasonable price, it’s not going to remain on the market very long, but there are still a lot of homes that are drastically over priced,” he said. “People know they can find something cheaper, or more in their price range, if they just keep looking.”

Increasing housing sales in the Bigfork area is credited with boosting the Flathead’s numbers this year. In Bigfork and the surrounding five-mile area, sales volume increased by a whopping 120 percent in the first six months of 2012 after falling 3 percent for the same period in 2011. The median price, however, fell 27 percent last year and 12 percent this year, reaching $214,450.

The story is a little different in Whitefish. Sales volume for the first six months of the year increased for the third year in a row — by 84 percent in 2010, 16 percent in 2011 and 6 percent this year. At the same time, median prices fell by 7 percent this year after increasing by 13 percent in 2010 and 13 percent in 2011.

Kalispell posts the largest sales volume numbers for all the submarkets in the Flathead, and sales there has ebbed and flowed over the past four years. Sales in the Kalispell area for the first six months of the year increased by 27 percent this year after falling 22 percent last year, increasing 58 percent in 2010 and falling 32 percent in 2009. Median prices fell by 4 percent this year after a modest 1 percent gain last year.

In Columbia Falls, the number of home sales in January through July increased from 42 last year to 66 this year, a 57 percent increase, but the $149,500 median price was a modest 3.5 percent increase over last year’s price. Median prices in Columbia Falls have fallen by 11.4 percent, 7.8 percent and 12.5 percent in 2009, 2010 and 2011 respectively.

Foreclosures continue to impact the local market. While the number of trustee sales increased last year, they declined this year, but foreclosure figures in the Flathead continue to be worse than the state or national averages.

The number of homes in the Flathead that went into preforeclosure, foreclosure or sheriff’s sale has hovered around 10 units per 1,000 since August 2011. But that’s more than double the rate in Montana and half again as high as the national rate.

Statewide, according to the Montana Association of Realtors, 3,725 homes sold in the first six months of 2012, an increase of 7.2 percent over the same period last year. Of the eight major markets, only the Northwest Montana Association of Realtors reported a drop in home sales for that period. The Montana Association of Realtors attributed the improving market statewide to record-low interest rates and increasing consumer confidence.

Across the U.S., the National Association of Realtors reported that sales of previously occupied homes increased by 2.3 percent from June to July this year, while sales over the past 12 months were 10 percent higher.