As we have been saying for quite some time now, the Missoula residential real estate market continues to indicate that Missoula is trending toward a more stable market and normalizing at the levels we’ve been experiencing for some time now. While there has been a seasonal decline the number of homes actively listed and homes sold over the last few months, the market is performing better than it did in the same months of the last couple of years; homes are currently staying on the market an average of nearly 4.0 months before being sold. Though sales will continue the seasonal decline we believe there are still plenty of active buyers in the market to absorb any additional homes that may come on the market in the coming months.
By the numbers:
- November sales were down 6.7% from October
- Approximately 86% of homes sold in November were under $350,000
- Average home prices were 1.5% higher than last month and 7.4% higher than in the same month last year
- Average list-to-sale price has been at 97-98% for well over a year
- Absorption rates are still favorable for sellers and are running slightly faster than a normal market
- Total number of homes on the market is 346 with an additional 120 homes under contract
Buyer Recommendation: Despite the slight decrease in homes on the market, there are buyers out in the market looking and sellers whose homes are competitively priced continue to entertain multiple offers and are selling very close to asking price. Prior to beginning or resuming your search, we recommend that you be prepared with a loan pre-approval letter and ready to look at and make an offer on the good homes immediately to avoid possible multiple offer situations. Average lender rates for mortgages have been fluctuating over the last six months; if rates rise too high or too quickly, we anticipate a downward pull on affordability for buyers in the market for a new home. Be prepared to pay 97-98 per cent of asking price, on average.
Seller Recommendation: With inventory starting to decrease a bit we recommend putting/keeping your home on the market, especially since there are currently plenty of buyers in the market to absorb any increase in inventory. However, while it seems it is still a seller’s market and average sold prices could increase a little during this time, it remains very important to list your home with a reasonable and competitive price.
Supply & Demand
The inventory of homes listed for sale in Missoula decreased from 385 at the end of October to 346 at the end of November and there were 70 homes sold throughout the month; at the end of November there were approximately 120 homes under contract. Despite the fact that active listings at the end of November were lower than in October, sales figures remained relatively consistent between October and November. This indicates to us that there are still plenty of buyers in the market despite the usual seasonal decrease in activity. October sales were down by about 5 sales from last month and from the same month last year.
Despite the seasonal decrease in active listings, there is still plenty of buyer demand and sellers continue to garner between 97 and 98 per cent of asking price.
Approximately 22 per cent of inventory turned over this month, with most of the sales activity (roughly 86 per cent) in the under $350,000 price range.
Days on Market (DOM)
DOM has increased slightly; homes sold in November were on the market for an average of 119 days in November compared to 113 days in October and compared to 110 days in the November of last year.
Foreclosure/Bank Owned (REO)
Short sale and REO properties accounted for only about 2 per cent of the active residential listings this month. At the end of November, the MLS was reporting 4 active short sales and 3 bank-owned properties out of a total of 346 single-family listings. We anticipate seeing more of these homes coming on the market in the next few months.
Average Sold Price
Average sold price in November was $268,050, up 1.5 per cent from last month and was up approximately 7.4 per cent from the same month last year. The following graph shows average sold price trends since January 2012.
5-Year Home Sales by Month
The number of home sales in Missoula decreased slightly this month to a total of 70 and under contract volume decreased from 141 properties at the end of October to 120 properties under contract at the end of November. The following chart provides a monthly snapshot of total homes sold since January 2010. (Green columns represent Under Contract properties for the current year.)
Overall Short-Term Market Outlook
Based on inventory levels, sales, absorption rates and our own experiences, we believe we have been experiencing a normalizing market in Missoula over the last year or more.
With low inventory in the beginning of the year buyers had little to choose from, so when a good home that was priced well was listed, sellers were entertaining multiple offers and signing contracts with buyers at near asking price. Over the summer inventory increased and, despite the typical seasonal decrease in homes for sale, remained healthy as fall settled in. Inventory has decreased a bit further since fall, however, based on the absorption rates it is clear there are plenty of buyers in the market and homes are selling quickly and sellers are still getting very close to asking price. That being said, buyers still have limited options compared to years past, thus creating the possibility of a seller getting an offer close to asking price.
Qualified buyers that are prepared to buy are looking to purchase a reasonably priced home. Sellers whose homes are competitively priced continue to entertaining multiple offers and are getting very close to asking price or more than asking price. Sellers are currently closing the sale at an average of 97 per cent of asking price.
Full PDF Copy: Nov 2014 Market Report