With residential sales increasing and prices strengthening slightly after hitting rock bottom, the Flathead County real estate market seems to have turned the proverbial corner, according to a report from Jim Kelley of Kalispell’s Kelley Appraisal.
Kelley said Flathead County home prices appear to have bottomed out in the last quarter of 2011 and have risen in the first half of 2012. Sales are up considerably while foreclosures and foreclosure notices are decreasing. Kelley’s market trend reports are widely referenced in the Flathead real estate industry.
Kelley says the numbers are cause for “cautious optimism” since there are still “a lot of red flags,” including the national economy and European debt crisis.
“I think what we’re seeing is that in 2011 we kind of bottomed out and we’re seeing a slight rebound, but I emphasize slight,” Kelley said.
At the end of 2011, the median home price in Flathead County was $169,000, which Kelley said was the lowest since the start of the housing crisis. Since then the median price has climbed slightly to $177,000 in May.
“Now we’re trying to find that point of stabilization,” Kelley said.
Taking advantage of low prices and low interest rates, homebuyers have picked up their activity through the first five months of 2012. Kelley documented 475 residential sales in Flathead County from January through May. There were 361 during the same time last year.
The total number of sales through May, according to Kelley, was the highest since 2007 when there were 544 sales. The low for the five-month period was 231 total sales in 2009.
Kelley’s report notes another encouraging sign: while the total number of sales increases, the number of bank-owned property sales decreased again in May.
“This is continuing evidence that the housing market bottomed in the fourth quarter of 2011,” the report states.
Officials from the Northwest Montana Association of Realtors are encouraged by the subtle signs of improvement. Rick Doran, NMAR’s president, said “time will tell” whether the market has indeed bottomed out, though his view of the market largely agrees with Kelley’s. He said some consumers might be waiting to see what happens with the November elections before making long-term decisions.
“We’ve seen a little uptick in activity, mostly in the starter-level, lower-range homes but also some improvement in the mid-level homes,” Doran said, adding: “It appears that the flow of foreclosures is stemming a little bit.”
Doug Zignego, president of the NMAR Multiple Listing Service, said median prices are still declining in some areas of the county but overall he feels that property values are beginning to solidify.
“My feeling is that the market has basically bottomed out and we’re starting to climb back out of it,” Zignego said.
Zignego said there were 101 total sales in the Whitefish area through May, up from 88 during the first five months of 2011. There were also 122 pending sales, compared to 92 this year.
Canadians purchasing second homes continue to be major drivers in the Whitefish area, though Zignego estimates at least 75 percent of the market consists of non-Canadians.
“Talking to other Realtors, they all pretty much have deals going, which is such a nice change from the past couple of years,” Zignego said.
Zignego and Doran say land sales are still lagging, with large amounts of land inventory sitting stagnant. According to Kelley’s report, there were 120 Flathead County land sales through May, the most since there were 137 in 2008 but far off the 2005 total of 502.
Doran said many people who are considering buying land in Montana and building a home in retirement are tied down to their homes elsewhere because of the struggling housing market and overall economy.
“Once you see the economy improving on a larger scale, maybe at that point we’ll start seeing those people coming here and this abundance of vacant lots will start to sell,” he said.
He added: “Builders have been reluctant to step in to the spec home market and rightfully so.”
Zignego is pleased to see “glimmers of light” and says the Flathead will always have one thing on its side: “The bottom line is that we have a real nice place to live.”
“We’ve been in a funk,” he said, “and I think we’re just working our way out of it.”