Blue Skies Over Montana...
Continued Real Estate Recovery
By Robyn Erlenbush, CRB, CRS, GRI
As we reflect back on 2013, it was a fine year for business traction and growth across our state, including non-farm earnings up 2.3%, lower unemployment at 5.2%, increased tourism spending over $11 million, and a very strong comeback for real estate in every market with over 13% statewide sales gains. The most recent estimated population figures show 1,015,165 Montanans with a 1% increase over 2012. The revised county population numbers confirm that the fastest growing counties include Gallatin at 2.3%, Flathead at 1.6%, and Yellowstone at 1.5%. It is quite amazing how quickly the real estate world changed from a lackluster situation with distressed sales and an over-supply of housing inventory to a robust, active market filled with buyer demand and price appreciation. Let’s take a trip around the state to have a closer look at the major markets. The following real estate sales data is provided by local Realtor® boards from each market.
If we combine Bozeman city limits, Bozeman outskirts, Belgrade, Manhattan/ Three Forks, Gallatin Canyon/ Big Sky, and Park County (areas 1-6 of our multiple listing service), there were 1,456 single family home sales reported in 2013 versus 1,250 in 2012. Sales of single family homes in just the Bozeman city limits increased from 434 to 490 with an average price jump from $293,786 to $309,986 and median price gain from $255,000 to $277,605. Condos/ townhomes also increased from 553 to 627 sales in 2013, the average price rose to $233,638 from $187,395, and the median price grew to $174,000 in 2013 from $147,500 in 2012. This certainly signifies a market correction that we have been anticipating. Big Sky saw a fabulous “come back” year with strong freestanding residential sales up 19%, condos up 60%, and vacant land sales up 75%. Unprecedented new construction is scheduled for the Yellowstone Club in 2014. And, clearly the second homebuyers are back in the market with purchases, instead of just looking. Gallatin County population is 94,700.
Billings, our largest market (pop. 154,200), displayed nice gains in the number of single-family sales for 2013 at 2,248, increasing from 2,038 the previous year. The median sales price increased to $209,625 from $195,000 in 2012 with an average of $229,318, up from $215,091 the year prior. The days on market decreased from 72 to 63 days. A quick glance at condos/townhomes shows a dip from 244 units in 2012 to 224 last year but with increases in both the median ($159,300) and average ($165,942) prices. The strong oil and gas play in eastern Montana continues to push growth in Billings, as a regional trade center and a Bakken Gateway City. Seven new hotels are slated to open in 2014 and retail growth is very strong.
The Flathead market (pop. 93,100) saw a healthy increase in the number of sales, up to 1,801 single-family units in 2013 from 1,543 in 2012. And as the other markets, the median price was up to $210,000 from $190,000, with an average at $289,286 versus $275,258 in 2012. Condos/ townhomes also improved in number of sales from 222 to 249; median price of $187,000 over $161,250; and average price of $241,684 compared to $217,768. This area was one of the hardest hit and has made an astounding recovery. The resort and second home purchaser has returned for lake frontage and ski retreats properties, and Canadian investors are helping to fuel sales.
Helena (pop. 65,300) saw sales gains of single-family homes and townhomes combined up to 835 in 2013 from 767, and the average price moving to $221,822 from $213,500. Great Falls (pop. 82,400) had a bit of a jump in number of residential sales from 1,007 in 2012 to 1,050 last year, but the average price stayed stable at $183,734 ($183,170 in 2012), and the median price also remained flat at $158,000 ($156,500 in 2012). These two markets generally exhibit the most consistent stability in terms of the reliability of government-related industry.
The Missoula market (pop. 111,800) also showed a strong increase in single-family sales to 1,185 for 2013 from 968, yet a minimal median price increase from $209,500 to $215,000. Bitterroot posted nice gains in single unit home sales with 470 in 2013 versus 416 in 2012; average price increasing from $201,961 to $226,407; and median price growing to $185,100 from $176,100. Missoula is a very stable market with a large area of trade. All sectors have recovered and commercial is rebounding and growing.
Data that is available via the mt.gov Web site shows Montana faring quite well versus the nation as a whole when it comes to employment. Our seasonally adjusted unemployment rate, which was available as of the end of November 2013, was 5.2 compared to the U.S. average of 7.0. Montana numbers ranks 11th lowest in the nation. Not surprisingly, North Dakota has the best unemployment rate at 2.7. Within our state’s borders, the rate ranges from 1.5 in Fallon County (Baker) to 13.5 in Lincoln County (Libby). Unemployment figures for the counties that we featured above include 4.7 for Gallatin (Bozeman), 6.6 for Park, 3.6 for Yellowstone (Billings), 7.3 for Flathead, 3.8 for Lewis & Clark (Helena), 4.3 for Cascade (Great Falls), 4.5 for Missoula, and 6.7 for Ravalli (Bitterroot).
What should we expect in 2014? I would suggest, similar growth numbers and increased real estate appreciation. The real estate sales numbers will be impacted or limited only by the availability of inventory, so new construction and shovel-ready building lots will tell the tale.