Housing most affordable it's been in 30 years

The local housing market is slowly but surely finding its footing. A new report shows a limited recovery in Whitefish to both new construction and sales that is predicted to continue through 2013.

Flathead Valley appraiser Jim Kelley recently distributed his annual year-end report. His analysis points to numerous areas that indicate an improving market — a decline in the number of REO sales, an increase in the number of homes sold and an improving employment picture.

Residential sales in Flathead County increased last year to 1,332 units, about 29 percent more than in 2011, while the median price increased 4.2 percent to $187,500 after falling for four straight years.

While signs of a recovery are evident, Kelley told the Pilot it’s still a buyer’s market.

“Housing continues to be the most affordable that it has ever been in the last 30 years,” Kelley notes in his report. “With the current low interest rates, the affordability level is substantially higher than the median home price.”

Prices boomed from 2004 to 2008 with the median home price in the Flathead reaching about $250,000. Prices bottomed out in 2011, were stable in 2012 and will likely remain that way in 2013, Kelley projects.

Affordability is likely the main reason why the number of home sales in Flathead County increased by nearly 30 percent, Kelley suggests. In fact, nearly 60 percent of new listings in the Flathead sold last year.

“This is the highest it’s been since 2005 and illustrates a significant increase in demand,” Kelley said.

In Whitefish within 3.5 miles of city limits, 256 homes were sold last year, an increase of 17.4 percent over 2011 when 218 sold. The median price of homes sold last year was $245,000, down slightly from 2011.

These numbers compare to years like 2007 when 278 homes sold at a median price of $335,000.

About 3 percent of sales last year in the Whitefish area were short sales, while 20 percent were real estate owned. Kelley says REO sales have contributed to total sales volume in recent years, but predicts those sales will continue to drop.

“As the number of REO sales decrease, I would guess that would give us a slow down in the total number of sales,” he said.

Whitefish’s median sale price in 2012 was at the top when compared to other nearby cities. The next highest was in Bigfork with a median sale price of $238,840. The median sale price in the Columbia Falls area was $162,000, and $160,000 in Kalispell.

Eighteen homes along Whitefish Lake sold last year at a median price of $1.09 million, a 14 percent decrease from last year.

New construction continues to increase after bottoming out in 2009. Whitefish reported 60 new homes constructed last year within city limits. That number compares to the 14 new homes built in 2009.

Subdivision activity in the county, however, is at an historic low and not expected to improve in the immediate future, Kelley said.

Kelley’s full report can be downloaded at www.kelleyappraisal.net.