Real estate market improving on Flathead Lake

The local real estate market may have turned the corner.

Home prices on Flathead Lake are steady and remain near pre-real estate bubble prices. The total number of sales of Flathead Lake property increased 55 percent last year over 2011, although the median price decreased. There were 48 sales of Flathead Lake property in 2012 and 31 sales in 2011, according to John Pearson, a Realtor at Trails West Eagle Bend Realty. The median price of Flathead Lake property dropped from $650,000 in 2011 to $595,000 in 2012, and this first quarter of 2013 is “virtually the same as last year,” Pearson said. “It is interesting, that sales have increased dramatically but prices have lowered.”

Sales of residential property in the Bigfork area are trending up over last year. The first quarter of 2013 saw 25 sales, compared to 23 in the first quarter of last year. The median price on those homes rose to $257,000 from $199,000, reflecting a two-year trend of increasing prices.

The year 2012 had 161 residential sales, compared to 93 in 2011, and the median price rose from $245,000 in 2011 to $250,000 in 2012.

“We’re getting back into realistic pricing,” Pearson said.

On the land side, there were 34 sales in 2012 compared to 30 sales in 2011. The median price on land purchases dropped to $102,500 from $121,000 over that time.

“It’s a good sign we’re seeing a bit of movment, because in the previous three years there was none,” Pearson said. “I’m very encouraged. The 2012 numbers were a huge improvement over 2011, and statistically we’re ahead of 2012. I feel really strongly we’ve turned the corner.”

Pearson has 14 years experience as a Realtor in Bigfork. “I saw the bubble form and saw it go away,” he said. One reason for the upswing in sales volume this year could be that some metropolitan areas in the United States have come “roaring  back,” Pearson said, and Montana tends to follow those markets.

According to Realtor David Fetveit, 2012 showed a significant turnaround for the local real estate market. “Questions remained as to whether this initial recovery trend would continue through the winter months and first quarter of 2013,” Fetveit said. All indicators showed an increase for the first quarter of 2013 compared to the same period last year, Fetveit said, and the distressed segment of the market has diminished significantly overall, with inventory levels at 5-year lows. “These trends can only begin to move prices upwards,” he said.

Based on market-absorption rate, there is less than a 4-month inventory of bank-owned residential listings on the market, compared to a 20-month inventory for the overall residential market.Flathead Lake real estate sales continued along at a steady pace, posting seven closed transactions for the month of March. The first quarter of last year started out with 10 transactions for just over $8 million in sales. Northwest Montana has closed 12 transactions for the first quarter of this year, for slightly less total volume at $6.5 million, according to Fetveit.

Inventory of waterfront properties is nearing record lows, he said. “It will be interesting to see if there are enough spring listings that come onto the market to keep prices where they are, or if the lack of supply will begin to apply upward pricing pressure,” he said.

The adjusted average price per foot is up over last year. However, the first quarter of 2013 has been lower priced, value buys, pushing the average price per foot substantially lower for the year-to-date numbers, Fetveit said. “I do not believe prices are continuing to drop, just that fewer prime frontage pieces have sold in the first three months of this year,” he said.