The Missoula Real Estate Blog

Recognizing the growing issues of housing affordability facing the greater Missoula area, in the winter of 2016-2017 the Missoula Organization of REALTORS® began assembling both private and public-sector partners towards the goal of commissioning a study to analyze the housing market conditions and provide recommendations for strategies to promote more housing affordability.

In March 2017, Werwath associates was retained to collect data and research that characterized the demographic and housing market conditions, analyze the current state of housing affordability, survey both housing consumers and the building industry, analyze both regulatory and no-regulatory housing development constraints, and to provide concise recommendations for new strategies to increase housing affordability.

The process of compiling this report included a deep review of housing, workforce, and demographic information from the Census and local sources, over 30 stakeholder interviews (see Appendix I for a complete list), a review of housing market and housing development cost data, as well as a review of key regulations impacting housing development for both the City of Missoula and Missoula County.

The process of compiling this report was overseen by a diverse advisory group that included representatives from the city, county, building industry, REALTORS®, lenders, local businesses, and planning/engineering fields who met four times throughout the process of drafting the report to provide feedback on report drafts as well as to provide overall feedback on the approach and direction of the project. In addition, the drafts were reviewed by affordable housing service providers including the Missoula Housing Authority, Homeword, and NeighborWorks Montana, who provided invaluable feedback. There was also broad community and industry support for this project, and continued support around implementation is what will be required to create systems-level change in the various areas that impact housing affordability.

This project would not be possible without the direct support of our project partners including the City of Missoula, Missoula County, the Missoula Area Chamber of Commerce, Missoula Building Industry Association, and the Missoula Economic Partnership. Additional sponsorship support was provided by First Security Bank, Edgell Building, Pew Construction, Territorial LandWorks, St. Patrick Hospital, First Interstate Bank, the National Association of REALTORS®, and the Montana Association of REALTORS®. We would also like to recognize the time and valuable input volunteered by our advisory group members: Collin Bangs, Clint Burson, David Edgell, Janna Geier, James Grunke, Ruth Hackney, Scott Hansen, John Horner, Merry Hutton, Mike Nugent, Pat O’Herren, Eran Pehan, Tom Pew, Jason Rice, Nicole Rush, Sam Sill, and DJ Smith.

Download the Making Missoula Home report

The median sales price of a Missoula home reached a record high of $255,000 in 2016. With low interest rates, a higher demand for housing, and low unemployment rates, the outlook for Missoula is strong in many respects. However, at the same time, for residents of Missoula, housing is becoming less affordable, the real estate market has an incredibly tight supply, and renters are also faced with a low vacancy rate and rents that are often not proportionate to their income.

The stresses on the Missoula housing situation include a growing population, which reached 114,181 this year, a 9.4 increase since 2006. In addition, incomes in Missoula have not increased at the same rate as rent or home prices, causing housing affordability to decline.

The central issue in this year’s report reveals a tight supply of housing, both for sale and for rent, which has created challenges. In response to a tight supply of real estate and higher prices, 2016 saw significant increases in home buyers either opting to build (the median price of a lot did not increase) or purchase more affordable condominiums or townhomes (which had median prices of $207,900 and $235,000, respectively). In addition, despite the work of organizations that offer services for low income renters, the demand for their services still far outweighs the number of vouchers or affordable housing units they can provide.

With the addition of the new City Office of Housing and Community Development in 2016, we hope to see a positive impact on housing and many of the issues this report presents. In addition, the Missoula Organization of REALTORS® has partnered with the City of Missoula, Missoula County, Missoula Economic Partnership, Missoula Area Chamber of Commerce, Missoula Building Industry Association, and a number of private sector organizations on a study to identify barriers and solutions to developing greater amounts of attainably priced housing. We believe this study, which should be released in the summer of 2017, will help the community address the affordability of housing.

As Missoula grows and attempts to adapt to its growth, we face both opportunities and challenges. While affordability and supply emerged as key issues in this year’s report, it is clear that this community is dedicated to finding solutions to address homelessness, affordability, and quality of life.

Download the 2017 Missoula Housing Report