All posts tagged Statistics

Missoula’s housing situation has improved greatly in many ways in the last few years, rebounding from the burst of the housing bubble. In 2015, sales were up, foreclosures were down, interest rates stayed low,and the market value of homes continued to increase. However, that strong real estate market, coupled with a growing population, also brings with it affordability and housing supply challenges.

Both the number of sales and the median price of a home increased in 2015, with the median price hitting an all-time high of $238,700. Prospective homebuyers found a tight supply of affordable houses in Missoula, and many buyers opted to build instead, with lots sales and the median price of residential lots also increasing in 2015.

The Missoula housing market still faces a number of other challenges, mostly having to do with affordability and available supply. While several organizations are working hard to alleviate issues of affordability and homelessness, the demand for their services remains significant. The waitlist for Section 8 vouchers increased by 8 percent in 2015, and the homeless population was estimated to be around 500 people.

As the county’s population increases by about 1 percent each year, housing demand also grows. Missoula’s vacancy rate for rentals remains relatively low, and the cost of rent continues to increase. However, most of Missoula’s building permits in 2015 went towards multi-family units, which may help address the growing population.

Meanwhile, the data show that 54.3 percent of renters and 27.2 percent of homeowners spend more than 30 percent of their income on housing costs. (Ideally, they should spend no more than 25% of their income on housing.) This shows that Missoula still has a significant population that struggles to find affordable housing.

Overall, 2015 statistics showed many positive trends for the Missoula housing market and the economy, but they also highlighted a number of challenges for buyers and renters. With strong programs working on affordability and homelessness issues, it is clear that Missoula is striving to create a vibrant community that we can all call home.

Download the 2016 Missoula Housing Report

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

By almost all measures it looks like the housing market is finally on the rebound. With the number of home sales nationally at its highest level in five years and the median home price increasing, there is definitely reason to be, at least, cautiously optimistic. The fact that the trend in Missoula is mirroring the national trend means that Missoulians also have good reason to be optimistic.

An increase in home prices is great for homeowners but not great for those wanting to buy their first home. Fortunately, the ability of people to buy homes is looking good as well. Lawrence Yun, the chief economist for NAR stated that “The housing affordability index shows that the national median income of families was almost double the income needed to buy a median-priced home in 2012, so most buyers are able to stay well within their means. Even with rising home prices, conditions are expected to stay very favorable with the index averaging 161 in 2013, which would be the third best on record.”

The increase in income and decrease in interest rates has allowed homes in Missoula to be more affordable in 2012 despite an increase in median home prices. With a 20 percent down payment, a four person household has an HAI of 133. However, since most families do not have that ability, the actual HAI is 101. If median home prices continue to go up, Missoula will face the recovery still dealing with issues with housing affordability.

Pairing these indicators with today’s low interest rates, the real estate market should continue improvements throughout 2013. It is important to remember, however, that not everyone is able to take advantage of the current interest rates to buy a home. While lower interest rates are enticing for homeowners who want to refinance their existing mortgages, current lending standards remain tight and there have been instances where seemingly qualified buyers have come across issues obtaining financing.

While the signs are pointing in the right direction, this economic recovery has been longer and more complicated than most of us hoped for. The Bureau of Business and Economic Research stated in its Economic Outlook 2013 that “There are probably too many uncertainties directly ahead for the national economy to hope for much more than modest growth in 2013. But…in many ways the U.S. economy is in better position for faster growth than it has been in years.”

While growth may still be slow, the local market has finally returned to “normal” absorption rates suggesting we are as close to what is expected to be a normal market in terms of absorption (supply and demand) than we have seen in over five years.

But let us not forget that in Missoula we are still experiencing higher-than-average median home prices and lower-than-average median incomes. Additionally, distressed sales in Missoula continue to rise. Couple these issues with an increase in poverty and homelessness, and locally we still have much work to do.

Download the 2013 Missoula Housing Report

Today, both a pessimist and an optimist could find persuasive indicators to satisfy their outlooks for the Missoula housing market.

The pessimist might cite data indicating a continuation of the downturn, such as the still-declining annual number of existing home sales, the now 6-year slide in the number of single family building permits issued by the City of Missoula, the persistently high county unemployment rate, and continuing declines in inflation-adjusted income.

The optimist might counter by pointing to data giving hints that a meaningful recovery in the local housing market and the overall economy may at last take hold, such as the year-long 2011 increase in median sale prices of existing homes, an all-time historic low in mortgage interest rates, signs of a clearing from the home sales market of foreclosures and short sales, and late-2011 plus early-2012 declines in unemployment at all levels – local, state, and national.

Clearly, the data send mixed signals. But that, in itself, is a hopeful sign, as the past three of our annual reports to the community, for 2009 through 2011, contained very little data supporting an optimist’s perspective on the near-term future. Today, for example, much more so than in recent years, we can have greater confidence that our housing market, as well as our overall economy, is likely to escape a ruinous “double-dip” downturn.

Which is not to say that we are free of grave concerns – perhaps most prominently, affordability of decent housing. While our local housing market, like the national market, has seen several years of increasing affordability, the impact of those gains in Missoula has been much weaker than in the U.S. as a whole.

In this regard, the local rental market is especially worrisome. Rental prices, both in our region and nationally, have firmed considerably over the past year. Though the increase is moderate, it exceeds the inflation rate, while income gains have lagged the inflation rate. And in this time of severely strained government budgets, prospects for increased assistance from public programs – locally, statewide, or nationally – are at best dim and at worst nil.

Harvard’s State of the Nation’s Housing 2011 observes that “income gains have lagged housing costs for decades for an increasing share of renter households, and affordability pressures are making their way up the income scale. Rising demand is already pushing rents higher while stubbornly high unemployment is keeping the lid on wage increases. If these trends continue, affordability problems will worsen as the economy recovers.”

Concerning that economic recovery, one of the few certainties the data provide is that it is the weakest ever experienced – in no small measure owing to the absence of a pronounced turnaround in housing. For most Americans, the Great Recession’s officially declared end-date of June 2009 and 34 months since of recovery seems ludicrous.

Experts at the national and local levels have been confounded by the feebleness of recovery. Billionaire investment guru Warren Buffett admitted in February 2012 that he was “dead wrong” in his 2011 forecast that the U.S. housing market would begin to recover by now. In the same month, Patrick M. Barkey, Director of the Bureau of Business and Economic Research (BBER) at the University of Montana, said that Montana’s economic recovery “remains stuck at the starting gate” – citing data showing that the state’s economy actually slowed down in 2011 after having grown in 2010 (Big Sky Business Journal, Feb. 21, 2012).

Nonetheless, our consensus opinion remains, as in the past, that the Missoula market has telling advantages that help us cope better in these difficult times. One of these is the lesser severity of decline locally versus nationally, in the overall economy generally and in the housing market specifically. Another advantage is that Missoulians are resilient and pragmatic people: When confronted with challenges such as those of recent years, we collectively roll up our sleeves and say, “Let’s make things better.”

In 2011, particularly its final months, and early 2012, we began to see signs of success in that effort. With your help, those signs will proliferate this year and beyond.

Download the 2012 Missoula Housing Report