The following analysis of the Montana real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you in making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.
According to the Labor Department, Montana added 7,400 non-agricultural jobs between September 2017 and September 2018, representing an annual growth rate of 1.6%. For perspective, the U.S growth rate is about 1.7%. The state experienced pretty substantial monthly increases in employment over the last few months and I hope this will continue even as we see a slowdown in employment in the agricultural and coal mining sectors. By the end of the year, I believe Montana’s non-farm employment will increase by 1.9%. In September, the state unemployment rate was a healthy 3.6%, down from 4.1% a year ago.
HOME SALES ACTIVITY
1,847 homes sold during the third quarter of 2018, an increase of 1.5% over the same period in 2017.
Total sales activity rose in four of the counties analyzed in this report. The largest annual increase was seen in Madison County, which had a substantial 205% increase, from 21 home sales to 64. Sales fell in the five remaining counties. The greatest decline was in Jefferson County, where sales were down 19.6% (representing a drop of 27 units).
The number of homes for sale remains somewhat tepid, with an average of 1,670 active listings in the counties contained in this report.
Inventory levels remain an obstacle to sales because the number of listings is well below buyer demand. I believe it is unlikely we will see any significant increases as we close out the year, but I am hoping the spring market should bring some relief to buyers.
The average home price in the region continued to rise in third quarter, with a year-over-year increase of 8.8% to $334,112.
Price appreciation was strongest in Missoula County, where home prices rose by a substantial 18.5%.
In addition to Missoula County, two other counties had solid price increases when compared to a year ago. Ravalli County sales prices were essentially the same as a year ago.
The takeaway from this data is that demand is still exceeding supply, which continues to drive up home prices.
DAYS ON MARKET
The average number of days it took to sell a home dropped 26 days compared to the third quarter of 2017.
Homes sold fastest in Gallatin County and slowest in Lewis and Clark County. In six counties — Ravalli, Lake, Broadwater, Jefferson, Gallatin, and Madison — days on market dropped when compared to the third quarter of 2017.
During the third quarter, it took an average of 126 days to sell a home in the region.
The takeaway here is that, in most markets, supply continues to exceed demand.
The speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors.
For the third quarter of 2018, I have kept the needle well in sellers’ territory. There continues to be a shortage of homes for sale, and those that are well-priced and well positioned are selling relatively quickly. Housing affordability remains a concern in some markets, which is something I will be keeping an eye on as we move through the fall and into 2019.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics and has more than 30 years of professional experience both in the U.S. and U.K.