Submitted by Anonymous on Wed, 10/31/2007 - 20:07.
Missoula housing trends: Home prices are soaring, but affordability is declining
The Missoula Organization of Realtors released their report on Thursday, revealing the median home price in Missoula has reached $206,850 last year - a whopping $20,000 increase over the year before.
This price increase has put buying a home out of reach for the median income family, a condition largely caused by a lack of land to build on.
The Realtors' report shows that in order to afford the median home price, a family would need to earn at least $58,128 a year. However, the median income for a household in Missoula is $43,200. At that income level, a family could afford to buy a house for $143,000, and at the time the report was completed, there were all of nine such houses for sale.
Mae Hassman, chief executive officer of the Realtors' group, pointed out that Missoula County continues to grow at a rate of about 1.7 percent a year, for an annual net population increase of about 500 people.
The Missoula Organization of Realtors president, Mary Marry, said, “The main thing that we saw from the report is that there's demand but no land, and that's what's driving the pricing up,” Marry said.
In particular, the number of empty lots sold each year has been steady, but is bound to reach a crisis point as the city runs out, Hassman said. The median price for a bare lot has already more than doubled, from $43,450 in 2001 to $95,000 last year.
The lack of open lots has helped push prices up, but it has also kept the city from overbuilding, said Collin Bangs, a local real estate agent and housing developer.
“The lack of land availability is what kept us from overbuilding,” he said. “In a way, it sort of saved our bacon in the short term. In the long term, it's going to be a problem.”
The fact that Missoula doesn't have enough space to overbuild has turned out to be a blessing, Marry said. It means sellers here are prevented from flooding the market with homes, which would drive down prices and cause an overstock of available housing.
High real estate prices have yet to put a damper on home sales in Missoula County, and sales volumes have been on the upswing since since 2002. Last year, nearly 1,500 homes were sold in the Missoula area, a 10- percent increase over the year before.
Sales of new single-family units are particularly strong and don't show signs of slowing, Hassman said. Likewise, the average number of days a house for sale spends on the market remained steady in 2006 at about 110 days.
The number of foreclosures filed in Missoula County, she noted, has increased by 22 percent, from 176 in 2005 to 215 in 2006.
Of course, homeownership isn't the only housing option in Missoula, and the report reflected that by including information about the rental market for the first time. According to information compiled in the 2007 Missoula Housing Report, 53 percent of housing units in Missoula County are owner-occupied, 37 percent are renter-occupied and the remaining 10 percent, which includes seasonal homes, are vacant.
The overall rental vacancy rate, according to the report, is a low, low 4 percent, and average apartment prices are currently ranging from about $450 to $980 a month.
The report also made clear the income disparity between homeowners and renters; it pointed out that the median income for Missoula County's homeowners was $54,710 - more than double that of renters, which was $21,570.
While the region's per-capita income has been rising 2 percent a year, to more than $30,000 at last count, the number of households living below the federal poverty level has also been increasing. As it stands, some 15 percent of households in Missoula County live below that threshold.
The U.S. Census Bureau shows household incomes in the county can be grouped into three major brackets: households earning $60,000 to $74,999, households earning $25,000 to $29,999 and those earning less than $10,000. Interestingly, the MOR report found that these peaks correspond with Missoula's three major employment groupings: professionals, service sector employees and retirees/students.
Source: http://www.missoulian.com/articles/2007/03/09/news/top/news01.txt
This price increase has put buying a home out of reach for the median income family, a condition largely caused by a lack of land to build on.
The Realtors' report shows that in order to afford the median home price, a family would need to earn at least $58,128 a year. However, the median income for a household in Missoula is $43,200. At that income level, a family could afford to buy a house for $143,000, and at the time the report was completed, there were all of nine such houses for sale.
Mae Hassman, chief executive officer of the Realtors' group, pointed out that Missoula County continues to grow at a rate of about 1.7 percent a year, for an annual net population increase of about 500 people.
The Missoula Organization of Realtors president, Mary Marry, said, “The main thing that we saw from the report is that there's demand but no land, and that's what's driving the pricing up,” Marry said.
In particular, the number of empty lots sold each year has been steady, but is bound to reach a crisis point as the city runs out, Hassman said. The median price for a bare lot has already more than doubled, from $43,450 in 2001 to $95,000 last year.
The lack of open lots has helped push prices up, but it has also kept the city from overbuilding, said Collin Bangs, a local real estate agent and housing developer.
“The lack of land availability is what kept us from overbuilding,” he said. “In a way, it sort of saved our bacon in the short term. In the long term, it's going to be a problem.”
The fact that Missoula doesn't have enough space to overbuild has turned out to be a blessing, Marry said. It means sellers here are prevented from flooding the market with homes, which would drive down prices and cause an overstock of available housing.
High real estate prices have yet to put a damper on home sales in Missoula County, and sales volumes have been on the upswing since since 2002. Last year, nearly 1,500 homes were sold in the Missoula area, a 10- percent increase over the year before.
Sales of new single-family units are particularly strong and don't show signs of slowing, Hassman said. Likewise, the average number of days a house for sale spends on the market remained steady in 2006 at about 110 days.
The number of foreclosures filed in Missoula County, she noted, has increased by 22 percent, from 176 in 2005 to 215 in 2006.
Of course, homeownership isn't the only housing option in Missoula, and the report reflected that by including information about the rental market for the first time. According to information compiled in the 2007 Missoula Housing Report, 53 percent of housing units in Missoula County are owner-occupied, 37 percent are renter-occupied and the remaining 10 percent, which includes seasonal homes, are vacant.
The overall rental vacancy rate, according to the report, is a low, low 4 percent, and average apartment prices are currently ranging from about $450 to $980 a month.
The report also made clear the income disparity between homeowners and renters; it pointed out that the median income for Missoula County's homeowners was $54,710 - more than double that of renters, which was $21,570.
While the region's per-capita income has been rising 2 percent a year, to more than $30,000 at last count, the number of households living below the federal poverty level has also been increasing. As it stands, some 15 percent of households in Missoula County live below that threshold.
The U.S. Census Bureau shows household incomes in the county can be grouped into three major brackets: households earning $60,000 to $74,999, households earning $25,000 to $29,999 and those earning less than $10,000. Interestingly, the MOR report found that these peaks correspond with Missoula's three major employment groupings: professionals, service sector employees and retirees/students.
Source: http://www.missoulian.com/articles/2007/03/09/news/top/news01.txt
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