While Montana may not be suffering as severely the economic and housing slowdown that the rest of the country is grappling with, the Flathead real estate market in the first half of 2008 appears to be declining significantly from the boom of the last several years.
“There’s some reality that we have to face up to,” Bryan O’Connor, a real estate agent at Trails West Eagle Bend Realty in Bigfork, said. “No two ways about it, our volume is down, but I’d rather be here than Las Vegas or a lot of other places.”
The Flathead Valley, including portions of Lake and Lincoln counties, has a record high number of homes for sale currently, with more than 3,300 homes on the market, and more than 7,500 total listings. That’s up from 2005 and 2006, during the peak of the boom, when there were usually around 4,000 total listings.
“Our market is down 30 percent for 2007 any way you want to slice it,” O’Connor said. “It’s a buyer’s market, and that’s not necessarily a bad thing.”
Jim Kelley, who runs a real estate appraisal and consulting firm in Kalispell, backs up O’Connor’s assessment, and anticipates the number of homes sold in Flathead County in August of this year will be the fewest homes sold in August – normally the largest month for residential sales – in 10 or 20 years, depending on what the final numbers reported for the month show.
The median price of homes sold in Flathead County also declined 4.8 percent in the first half of 2008, from $241,500 in the first half of 2007 down to $230,000, according to Kelley’s July report.
Home sales in Flathead County were down 28.4 percent in the first half of 2008 from last year at the same time. Among the Flathead communities, the high end of the market appears to be taking the biggest hit. The number of homes sold in the Whitefish area in the first half of 2008 is down 31.4 percent over last year; in Bigfork that number is 46 percent, and Lakeside saw declines of 27.3 percent. The number of homes sold on Flathead Lake is down 33.3 percent. The two homes sold so far this year on Whitefish Lake mark an 83.3 percent decline from this time in 2007.
Kalispell and Columbia Falls also show declines in home sales. Kalispell’s home sales are down 23.2 percent in the first half of 2008, while Columbia Falls home sales have dropped off 27.9 percent, according to Kelley’s July report.
But a relatively healthy market still exists for homes $300,000 and under. According to Kelley’s calculations, that segment accounts for more than 70 percent of the homes sold in Flathead County. For homes priced at $1 million and up, Kelley calculates an 8.7-year inventory on the market, at current sales rates. For homes listed at $2 million and up, a 9.4-year inventory exists.
One factor in the slowdown of home buying here is the tightening of the credit markets, making loans harder to come by.
“Finding and acquiring credit is difficult,” said Susan Naive, senior vice president of Crescent Capital Management in Whitefish. “It’s really challenging in this environment.”
Cal Scott, president of the Northwest Montana Association of Realtors, agreed that there is a robust market for homes under $250,000, and said the main problem in the Flathead is that a glut of homes above that price sit on the market, when 80 percent of the population here can only afford homes in the $150,000 range.
“We don’t have an adequate supply of housing here for our workforce,” Scott said, adding that the tougher national slowdown also compels possible buyers here to wait.
“They watch the TV, and they see what’s going on in Las Vegas,” Scott said, “and they automatically apply that to here, and they freeze.”
He warned against generalized assessments of the entire Flathead real estate market.
“The buyer’s market differs from community to community and price ranges,” Scott said. “I would encourage people to identify a location, a specific price range and make their own assumptions.”
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