Page 43 - Flathead Beacon // 6.29.16

KELLEY’S MARKET TRENDS
FLATHEAD REAL ESTATE IN PERSPECTIVE
BY JIM KELLEY
WHEN I FIRST STARTED IN THE REAL ESTATE INDUSTRY IN the 1970s, I was told that buyers could typically qualify to pur- chase a home that was approximately two and a half times their annual income. In 1970 the median home price in Flathead County was around $14,200 and the median household income was around $7,500, therefore the housing multiplier was 1.9 times income. In 1983, the median home price was $47,500 and the median household income was around $20,509 with a housing multiplier of 2.3, then stayed around 2.5 until 1992.
This week’s graph shows how this income multiplier has changed over the years, reaching a high in 2007 with the median home price equaling 5.5 times the median household income in Flathead County. Nationally, it reached a high of 4.8 in 2005 and the current national median is around 3.8 times national median income.
In Flathead County, this multiplier dropped to four times the median income in 2012, but is now over ve.
Mortgage interest rates are shown on the bar graph and illustrate how the drop in rates has contributed to the increasing income multiplier. One of the basic factors of value is “E ective Purchasing Power.” A 1 per- cent drop in the mortgage interest rate increases the home purchasing power by approximately 10 percent. With current mortgage rates below 4 percent, the home purchasing power is the highest it has ever been, which increases demand and does contribute to increasing home prices.
Note: The last median income estimates from the U.S. Census are for 2014. This graph uses the 2015 and 2016 median home price and the multi- plier is calculated using the 2014 median income for both the national and Flathead County multiplier in the last two years.
Housing Income Multiplier
Multiplier
6 5
4
Flathead Multiplier National Multiplier
Int. Rates Percent 10%
5.3
4.1
8% 6% 4% 2% 0
3
2 2.5
3.4
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2009 2011 2012 2013 2014 2015 2016
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.
BY GEORGIA CHRISTIANSON
PRICE: $295,000
WHAT: Two-bedroom, three-bath home SQUARE FEET: 1,026
This turnkey condominium in Mountain Harbor is conveniently located near ski- ing, dining, walking paths and White sh Lake access. Enjoy the open oor plan with high ceilings and plenty of natural light.
Montana West Realty
MLS#: 21605810
FLOORSPACE
WHAT CAN YOU BUY FOR ABOUT $300,000 NEXT WEEK: $350,000
KALISPELL
LAKESIDE
WHITEFISH
COLUMBIA FALLS
121 Palmer Dr.
211 Bear Canyon Rd.
1750 E. Lakeshore Dr.
315 Dunwoody Ln.
PRICE: $285,000
WHAT: Three-bedroom, two-bath home SQUARE FEET: 2,050
Enjoy endless mountain views from this remodeled home on the golf course. It features a spacious living room, large master suite, double garage, under- ground sprinkler and new Trex decking. National Parks Realty of Montana, LLC MLS#: 21606655
PRICE: $290,000
WHAT: Two-bedroom, three-bath home SQUARE FEET: 1,345
This home sits on nearly 9 acres and includes a heated shop, RV pad, fenced chicken coup, garden, greenhouse and re pit. Perfect for anyone who wants privacy with room to roam and entertain guests.
Keller Williams Realty Northwest Montana MLS#: 21606586
PRICE: $315,000
WHAT: One-bedroom, one-bath home SQUARE FEET: 994
This log home sits on more than 11 acres with a spring-fed pond. It includes two- car garage and two accesses. Portion of property permitted as a gravel pit. Chuck Olson Real Estate, Inc.
MLS#: 21606325
If you would like your property listed in the Floor Space section,
please e-mail editor@ atheadbeacon.com. Entries are compiled by the Beacon sta and Georgia Christianson, Montana Brokers.
What would 30 years of successful real-estate experience do for you?
Call Georgia, a certi ed residential specialist for a free one-hour consultation.
JUNE 29, 2016 // FLATHEADBEACON.COM
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