The Booming Rental Market

By Beacon Staff

Summer is the season of movement in the Flathead, when the valley shakes off the cold and wet of winter and spring and shifts forward to the relative consistency of warm weather and blue skies.

It’s not just hikers and anglers who take advantage; summer is also the easiest time to move a household, and while the real estate market is still finding its legs after the recession, the rental market is booming.

“We’re very busy; anything that we have doesn’t last very long,” Debra Hill, a licensed property manager at CoRental Property Management in Kalispell, said. “They’re flying out the door, and we have quite a few applicants for every property.”

CoRental manages more than 400 properties in the valley, Hill said, and as of last week all but eight were full. And those eight properties already had multiple interested parties, she said.

“It’s almost a waiting list,” Hill said. “People have applied, are approved and waiting.”

Matt Bubar, owner and operator at Integrity Property Management, reported a similar level of interest in the rentals his company operates.

“We can’t keep an inventory of places,” he said. “I wish I had 300 more places to rent out.”

Not only are the rentals filling up quickly, but they’re also filling up with people signing 12-month leases, showing signs of stability for these
rentals.

“Everybody’s coming here for the summer and everybody is signing year leases,” Bubar said. “Everyone is coming here to work.”

Real estate activity in the Flathead continues to improve from the recession, and at the beginning of the year, the real estate market was showing plenty of promise that it would continue to pick up steam.

In April, the median price of residential sales in Flathead County was $218,460, a nearly 13 percent increase from the same time in 2013, when the median home price was $194,000, according to Jim Kelley at Kelley Appraisal.

The median residential sale price dropped to $214,000 in May, and Kelley reported that the number of residential sales were even with 2013 through the first quarter, but dropped by 26 percent in April, and another 7 percent in May.

Kelley believes the market is stabilizing, and the lack of cheap housing – foreclosure and bank-owned sales are down – coupled with a strengthening employment rate leads to the current rental market.

“The rental market seems to be real hot right now; there’s hardly any vacancies at all,” he said.

In the past decade or so, there has typically been a rental vacancy rate of 4 to 5 percent, he said. Currently, Kelley would put the vacancy rate at less than 2 percent, which he predicted would lead to higher rent prices, and likely more apartment construction projects.

“There’s eventually going to be some balancing out, but right now the rental market is certainly hot,” he said.

At CoRental, Hill said she couldn’t pinpoint one type of rental that seemed the most popular – all of the properties, of all sizes, are in demand. Families are renting multi-bedroom houses, and single, young people are after smaller places.

While summer is typically the busy season for rental companies, Hill said, this level of activity has been consistent all year.

“It hasn’t slowed down, it’s been like this all winter even,” she said.

Some potential renters have called and tried to secure a place, sight unseen, before moving here, she said.

Bubar said Integrity Property Management’s rentals have been popular across the board as well, from four-bedroom houses to two-bedroom apartments. There have been a significant number of people moving here to work in firearm manufacturing, he said, and he’s also noticed plenty of retired military personnel looking for a place to rent as well.

As with any type of commerce, rentals follow the law of supply and demand, and when the demand is high, prices will likely reflect the lack of supply, Hill said.

“This is unprecedented, and that creates a shortage, and then the rents reflect that,” she said.

Hill said her company rolls with the real estate market, noting that CoRental has lost many of its properties to sales, and that the owner places it on the market and it is snapped up within weeks.

She’s also seeing renters move out to buy homes, which opens up rental space for new clients, completing the real estate cycle.

And while it may be frustrating for rental companies to have to turn away potential clients, staying busy is a problem they don’t mind having.

“It’s here today and gone tomorrow,” Bubar said.

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