News & Features

Seeking a Safe Haven

Realtors have “never been busier” as out-of-area homebuyers flood the Flathead Valley

After spending eight years in Chicago, 46-year-old physician Robert Valleau grew tired of the city life.

He was burned out from the bar-and-restaurant, shopping-and-museum scene of Michigan Avenue, the explosive taxes and his box-sized apartment. He preferred fresh mountain air to bustling city streets. But most of all, he wanted to get away from people.

“I found there was a stress level in Chicago,” Valleau said. “When you’re not in your apartment, which is your safe space, I find the tension rises.”

So after visiting the Flathead, a part of the country he had until recently never heard of, in November 2018 to look at a physician position, he moved to Whitefish a year later.

While Valleau moved to Northwest Montana months before the coronavirus pandemic disrupted people’s lives across the country, realtors in the Flathead Valley are noticing an influx of buyers moving to the area for the same reasons.

“Two things are happening,” said Wendy Brown, Northwest Montana Association of Realtors (NMAR) MLS president-elect. “People are really sick and tired of living on top of each other in the big city, and number two, everybody’s figured out how to work from home … So that’s probably our biggest driving factor — some of the barriers that kept people from being here before are no longer barriers.”

After chatting with out-of-state clients and friends, Brown also speculates the less-severe impact that COVID-19 has posed on Montana is another driving factor. Although cases are rising, Montana had the lowest number of COVID-19 cases in the country with 734 infected individuals and 163 active cases as of June 22, according to the state’s COVID-19 tracker.

The low volume of coronavirus cases, shift in remote work and growing dislike of cities have likely contributed to the booming housing market in the Flathead Valley, according to realtors.

“It’s never been busier,” Brown said.

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This May, Flathead County closed 2,115 sales, compared to 1,921 sales in May 2019, according to Montana Regional MLS data. Lake County closed 443 sales this May compared to 360 in May 2019. Lincoln County has stayed relatively the same with 306 closings this May compared to 302 last May.

Because Montana is a nondisclosure state, meaning sold data is inaccessible, there’s no way to compare the number of out-of-state buyers to in-state buyers. Anecdotally, realtors have noticed more out-of-state buyers than usual, including many who are relocating from California, Washington, Oregon and Texas, although realtors say people are coming from all over the country.

Brown is also noticing Montanans moving to and from other parts of the state. “It’s a lot of life-changing kind of things that drive the market more than anything,” Brown said.

Life events like starting a family, promotions, divorce or kids moving out of the house are all driving factors in buying property, Brown says.

“And because we have recreation, people are always going to want to be here,” Brown said. “More than anything, I think it’s about the ability to work from home, and that will allow people to get out of the city where they didn’t want to be anyway.”

While realtors say clients are looking at a wide range of home prices, Brown describes the $300,000 to $350,000 range as an “absolute battleground.”

New homes under construction in the Silverbrook Estates neighborhood in northern Kalispell on April 23, 2020. Hunter D’Antuono | Flathead Beacon

Flathead County’s median sale price in May 2020 was $335,000 compared to $319,500 in May 2019, according to MLS data. Erica Wirtala of NMAR says the rise in median price is likely due to the high number of second homes in the area. While the $300,000 price range is most common right now, Brown says more homes are selling on Flathead Lake than she’s ever seen. Last year between June 19 and Aug. 19, there were 13 closed properties on Flathead Lake, according to MLS data. Once contracts close in August, Brown says there will be 29 home closings in that same time frame for 2020.

But while people from all over the country are seeking the safe haven of Montana, Tracy Rossi, a realtor at Sotheby’s in Whitefish, has some Canadian clients who are frustrated about the closed border.

After selling a home to a Canadian family last December, Rossi says her clients haven’t been able to travel to their new home since they bought it last year. While Rossi hasn’t seen much interest on the buyer side from Canadians since the pandemic began, she is, however, receiving calls from Canadians who are evaluating how much their homes in the Flathead are worth.

The pandemic has also changed the way people are buying homes. Clients are touring homes via drone footage, FaceTime and video since many people can’t travel right now. The competitive market is also incentivizing buyers to act quickly before they lose their chance.

“I’m hearing from a lot of realtors they are selling homes that (clients) have never stepped inside before,” Wirtala said.

Rossi similarly speculates that buyers don’t have time to travel to look at homes first because of how competitive the market is.

“I’ve been in multiple-offer situations where the buyer loses because they don’t act fast enough or there’s a stronger offer that comes in,” Rossi said. “People don’t want to be in their cities anymore.”

Eric Perlstein of Keller Williams Realty in Whitefish says he’s had a few out-of-state clients sign contracts sight unseen, which he says is likely due to the already “super-tight” inventory. Like Brown, he says the majority of his clients are from California and Texas, some who are shifting to permanent remote work.

Brown says she’s been closing homes at 99% of the list price, and sometimes buyers are even paying cash.

“If you’re selling your house in California and moving here, you’ve got a pocket full of cash,” Brown said.

Valleau has noticed this firsthand, and says he put an offer on a house last fall that someone swooped in to buy with cash.

“I offered full price and didn’t get it,” Valleau said.

Wirtala at NMAR says she’s been hearing similar anecdotes from other local realtors that buyers from more expensive states are taking advantage of the Flathead’s comparatively lower prices.

“We just (complain) that the housing prices are so high here, but when you’re coming from California or New York, people say, ‘Oh what a bargain.’” Wirtala said. “That’s just nothing to them. They’re not even flinching.”

But while inventory is limited in the Flathead Valley right now, developers in Kalispell are in the process of building a variety of new housing ranging from apartments to single-family homes, Wirtala said.

Brown is noticing a lot of requests for three-bedroom, two-bath homes on roughly one-and-a-half acre lots in the $300,000 range. “It’s all about the garage and the acreage,” Brown said. “People want space and they want chickens.”

A development in southern Whitefish on June 17, 2020. Hunter D’Antuono | Flathead Beacon

And space is exactly what Valleau was looking for when he moved to Whitefish last fall. He’s thankful he relocated before the pandemic and protests enveloped the world.

“I’m so happy that I moved here because I averted a mess in Chicago,” he said. “It’s a disaster. They’ve been stuck at home … All they talk about is COVID. It’s their entire life.”

If he hadn’t already been here before the pandemic and protests began, he would certainly be looking to relocate now.

“The truth is, I would, for sure,” he said. “I say that hesitantly because I don’t want people to move here and it’s annoying even though I’m the guy who moved here.”

But Valleau is not alone. Rossi speculates the pandemic sealed the deal for buyers who had always fantasized about moving to Montana.

“It might be the Montana dream where people have thought about this for years and years but they haven’t acted on it,” Rossi said.

maggie@flatheadbeacon.com

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