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Missoula’s housing market has entered a more stable and encouraging phase. Based on the data in this report, we continued to gain more confidence in the Missoula housing market in 2014. Current homeowners sit in a positive position, with homes continuing to appreciate while inventory numbers, lot sales, building permits, and home sales were all in a healthy range. Coupled with a large drop in distressed sales, it presents a positive picture.

Residential lot sales, as well as their median sales price, increased in 2014. Building permits also increased, with the greatest number of new permits being issued for multi-family development, which will help in addressing Missoula’s growing population and the demand for rental units.

While the total number of home sales decreased slightly in 2014, sales began to outpace previous years by the third and fourth quarters. Condominium and townhouse sales also remained fairly strong. The median price of a Missoula home reached an all-time high of $225,000. Affordable homes saw the highest demand, with 59 percent of all home sales falling in the $100,000 to $250,000 range. Based on the inventory of homes on the market and the length of time they remained on the market, Missoula was solidly in a “normal” market again, after what equated to an oversupply in the market until 2012. In addition, the sharp drop in foreclosures and short sales meant fewer below-market-value sales. Potential home buyers may see a further increase in competition for affordable homes, and sellers may see less downward pressure on prices.

The challenge moving forward for housing is the lack of available supply in some areas. While the higher price ranges and some areas have a normal amount of listed supply, some other neighborhoods and Missoula’s more affordable price ranges are getting tighter and tighter on listed inventory. Lower-listed inventories can cause rapid bidding up in prices, which is good for homeowners but can be challenging for buyers who may be forced to pay higher prices or may get pushed beyond a comfortable purchase price. Low inventories also lead to slower market sales volume; if there aren’t enough listed homes on the market to meet the current demand, sales activity will lag.

While homebuyers now face more stringent lendingstandards, interest rates have remained low, and Missoula residents appear to be entering the homeownership process more financially informed than in previous years.

The demand for rentals in Missoula kept rental vacancy rates below the national average once again, and the cost of rent continued to increase in 2014. However, the growth in multi-family construction and permitting appears to be recognizing this demand. Missoula still faces several challenges, especially in meeting the needs of those who seek financial housing assistance and those who are homeless or at risk of being homeless.

The data on the affordability of rental housing shows that a high percentage of renters in Missoula still spend more than 30 percent of their income on housing. Coupled with a poverty rate of 18 percent, these facts offer evidence of a significant population that struggles to find affordable housing.

The Missoula Housing Authority was able to increase the number of Section 8 vouchers to assist with rental costs in 2014, but the demand for such assistance remains high, with more than 1,500 names on the waiting list.

Missoula began to make headway with the “Reaching Home: Missoula’s 10-Year Plan to End Homelessness.” While the number of literally homeless individuals did not decline in 2014, a large number of homeless people gained housing through various programs. The number of homeless or at-risk children, which had been extraordinarily high and worrisome in previous years, declined significantly, though the problem has not disappeared.

The City of Missoula is currently updating its Growth Policy to guide the future social, physical, environmental and economic growth and development of the city.

Rental prices continue to be high for renters in Missoula.

Overall, Missoula’s housing market exhibits strong statistics for 2014, though the data still reveal a number of challenges for buyers, sellers, and renters. It is clear that the economy is rebounding, the market is stronger, and Missoula is working hard to make this community a viable home for all.

Download the 2015 Missoula Housing Report

Missoula’s housing market is expanding with most of the measures continuing to follow national trends. Current homeowners are in a positive position. Those looking to buy are facing more competition in the most affordable price ranges. Based on the data included in this report, we are gaining confidence in the Missoula housing market, but some challenges will need to be overcome.

Lot sales have seen an increase which can possibly be related to reduced inventory for buyers. An increased demand for housing has left buyers with fewer options, so many aspiring homeowners are deciding to build instead. Fewer building permits were issued in the city overall in 2013, but since multi-family development is growing, the available housing stock should keep pace with Missoula’s positive population growth.

The increase in development also bodes well for economic recovery. During the recession, jobs in construction and related industries took the hardest hit. With an increase in development, we can expect an increase in jobs and an improvement in the overall economy.

Home sales and sales of condominiums and townhouses are up in almost every neighborhood. Multi-family development continues to expand while rental vacancies remain below the national average.

There is less distressed property on the market now, meaning fewer deals than in years past for homebuyers. However, it also means that sellers will face less downward pressure on prices. The increase in competition in the affordable price ranges also is a positive indicator for a seller. For buyers, mortgage interest rates have increased to 4.75 percent, and overall affordability is decreasing. The median home price has increased to $215,000.

A growing number of people are seeking financial housing assistance from the Missoula Housing Authority (MHA), while funding cuts have prevented forty families from receiving the rental assistance promised to them by their vouchers. The number of households on the waiting list for rental assistance has neared 2,000 households.

Most discouragingly, the number of homeless and at-risk children has increased over 30 percent in the last couple of years. Homelessness is not improving.

Many of Missoula’s most vulnerable residents can be encouraged by some of the economic figures. For instance, last year saw a decrease in unemployment and in the percentage of people living below the Federal Poverty Level. Also, “Reaching Home: Missoula’s 10-Year Plan to End Homelessness” began in earnest.

Missoula’s housing market is posting positive statistics overall, with growth in some areas and setbacks in a few others. While the market as a whole shows numerous positive indicators, there are still issues facing buyers and sellers alike. At the end of the day, it is Missoula’s community that keeps us all home.

Download the 2014 Missoula Housing Report