Kelley’s Market Trends: Residential Land Sales 3 to 10 Acres

The number of sales has started to come back, but is still far below what it was

By Jim Kelley

Last week I discussed small residential building lots, so this week let’s look at small acreage tracts of land in Flathead County. This includes all residential tracts that have sold that are between 3 acres and 10 acres. Waterfront tracts are excluded because they tend to be higher value sites that are in a class by themselves.

The price pattern is very similar to that of small building sites, with the median price peaking in 2007 at $152,000, which represented a median of around $23,000 per acre. That median price dropped from $152,000 in 2007 to a low of $73,750 in 2012. That represents a 52 percent drop in price, which is similar to the 56 percent drop seen in small building lot prices.

The market for small acreage tracts started to collapse in 2007 with the number of sales dropping from 191 in 2007 to 100 in 2007 and reaching a bottom in 2011 with only 36 sales.   The number of sales has started to come back, but is still far below what it was at anytime between 2000 and 2006.

Today there are around 255 of these tracts that are on the market and, according to the Montana Department of Revenue’s property tax records, there are 2,337 vacant rural tracts in Flathead County that are between 3 and 10 acres.   Looking at the number of these tracts that are selling, compared to the existing inventory as well as the number that exist in the county, it is reasonable to conclude that it will be a number of years before there is demand for new small acreage subdivisions.

In 1981, Jim started Kelley Appraisal in Kalispell and has since built an extensive data base of economic and real estate-related data on northwestern Montana. Over the last several years, he has published annual reports on the Flathead Real Estate Market and been a guest speaker on numerous occasions for various groups in the Flathead.