The Missoula urban area’s median sales price has soared to $305,500 through the first six months of this year, a record and the first time home prices here have topped the $300,000 mark.
That represents a jump of over $15,000 from the median sales price for homes sold in all of 2018, which was $290,000.
"This market has been so crazy," said Brint Wahlberg of Windermere Real Estate. "There's tight bidding wars and houses under contract Day 1. Items that you would consider affordable in Missoula, maybe not in other places, but what's available, is so few and far between that when it comes up it's a crazy competition and it gets bid up and away goes the median sales price."
There have been 624 homes sold in the urban area so far this year, and 153 of those were sold in June. The average number of days those homes were on the market is 136.
For all of Missoula County through the first six months of the year, the median sales price was $307,100.
On July 8, there were 302 active residential listings in the urban area and 483 in the county.
Wahlberg said late spring saw a "new record low" of listed availability.
"This is most definitely the first time Missoula's median sales price has eclipsed $300,000," he said. "What we saw in April and May was a surge of houses go under contract, and extremely tight supply."
Then, when those sales were finally recorded in June, it led to a spike in the median sales price.
Wahlberg said he expects the market to cool down this fall and winter as it did last year, but he still wouldn't be surprised if the median sales price climbs another $10,000 or $15,000 by year's end.
"Our median in August of last year was like $297,000 and through the fall peeled back as the crazy summer, the insane part of the market, cooled down and we hit the regular fall market," he said. "But what this probably means now is when a neighbor down the street sees a house sold for $305,000, they're not going to list theirs at $295,000 now. They're going to list at $305,000 and the median will keep climbing."
John Brauer, a past president of the Missoula Organization of Realtors, said out-of-state buyers with money are definitely helping to push up prices.
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“I’d have to say I believe that one of the things that was missing in our market when pricing was not accelerating as fast as it is now is that out-of-state influence,” he said. “Now that these buyers have seen their markets improve elsewhere, they now have been able to get properties sold in other places and now we’re seeing more out-of-state buyers than we have in some time.”
“That’s all part of this demand," Brauer added. "I don’t know that we point fingers at (out-of-state buyers) and make them responsible, but they’re part of the equation.”
Wages are higher in places like Seattle, where the median income is roughly double that of Missoula, so when those people move here they find housing prices very reasonable.
"We still see this big blend of out-of-state people coming in," Wahlberg said. "They sold their house for $750,000 or $1 million and it's $400,000 here, that's a screaming deal for them."
The price increases also keep people who are ready to move from their first house to a larger house out of the market.
"You get the tough challenge of people can move up but it's too intimidating," Wahlberg explained. "They're ready to upgrade but they can't make competitive bids. The market's supply kind of handcuffs sales volume, and that's a national trend."
Brauer said Missoula simply doesn’t have enough houses for sale to keep up with the demand of everyone trying to buy.
“It’s really as much a function of supply and demand as it is anything,” he said. “It is definitely still a seller’s market because of the high demand numbers we’re seeing and very low inventory. So the challenge obviously is going to be: How do we create more affordable housing and streamline our processes and get to a point we're more creative in getting affordable housing on the market?”
The median home sales price in Missoula has risen by over $105,000 since 2010, a 52% increase. Meanwhile, wages in Missoula have not kept up. The Missoula Organization of Realtors estimated last year that a family would need a median income of over $95,000 to afford a median-priced home, while the actual median income in Missoula is only around $42,000.
Brauer said he doesn’t see prices dropping any time soon.
“A lot of this depends on what happens with our supply side,” he said. “I don’t see any reason that we’re going to have any large increases in inventory. Having said that, I see much of the same for quite some time. Interest rates could have a pretty significant impact on demand as well. If interest rates for some unforeseen reason take a big hike and that demand softens, we could stabilize.”