Is Your Market Hot, Or Not?
As I said in my previous post, it has been a wild summer within the real estate market. Homes are being sold at an increasingly fast pace when compared to previous years. In the midst of the pandemic, housing demand has driven prices up creating an exciting seller’s market of sorts. Record-low mortgage rates and the housing inventory shortage have kept the US housing market strong. Buyers are moving quickly to beat out competition and lock in low mortgage rates. Housing prices have surged, but low mortgage rates are helping buyers to offset the increased cost and the Federal Reserve has made it clear that it has no intention of raising interest rates anytime in the near future. They are expected to stay at or near 3% over the next 18 months. Housing inventory is not expected to be on the rise so the real estate market seems to be in the seller’s favor for an unforeseen time.
For the first time, the national median sales price is above the $300,000 level and Montana numbers have shown an increase in price, with the exception of a few areas. I’m going to break it down in the neighborhoods that I service to give you an idea of the change in market over the last three years.
In 2018, the median home price in Missoula was $285,000, jumping 8.5% in 2019 to $310,000. Now, in 2020 the median home price has climbed another 8.7% to a high of $337,000. Bonner seems to be holding steady with 2018 being $300,000, $330,000 in 2019 and $325,000 in 2020. In nearby Clinton, the three-year surge is up just over $100,000 from 2018. That’s huge! In 2018, the median home price in Clinton was $244,000, then down 2% in 2019 to $239,000. In one year, prices rose a whopping 44.4% to $345,000. It’s craziness! However, if you're a homeowner, your home is your investment, and it is working in your favor.
Although, prices for the most part are at a high in Granite County, the diversity of the area paints a picture of what just a half hour drive can do in the real estate market. In 2018, Philipsburg showed a median home price of $173,000. It went up 11.2% in 2019 to $193,000 and then another 29% in 2020 to the current price $249,000. Travel 20 miles down highway 1 to Hall and the numbers show a three-year rollercoaster ride. 2018, showed $209,000 and then dipped downward 21.3% to $164,000 in 2019. But, in the crazy market of COVID and riots and all the other craziness 2020 sailed in with, the median home price in Hall skyrocketed up 155.3%, putting numbers at $420,000. And, as we venture down the road, another 6-ish miles, Drummond has an entirely different story to tell. The median price has plummeted 33.2% from last year. 2018 reported $123,000 and had an increase of 69.1% to $209,500 in 2019. Currently, 2020 is showing the median home price at $140,000.
However, there is a reason for the lower prices in Drummond. Most of the home sales this year have been in city limits and the homes in town are lower priced. In the last year, homes sold in town have been two-bedroom, one-bathroom homes. Homes that are selling for $130,000 this year, would have sold for $100,000 last year. The sales price of homes out of town are much higher, but sales of those properties have been scarce, because of the limited inventory on the market.
All this information might be a snore to a lot of people, but I find it fascinating in my line of work. Those of you who own a home should as well or it should generate some excitement if you are a homeowner in a hot market. Who knows what will happen? The outcome of the election could play another roll. Or, lingering concerns with the virus. I can’t see into the future, but talking with clients and other people in the real estate industry, prices will most likely stay up for some time. Until there are more homes to sell to offset the current number of buyers it’s going to remain a seller’s market.
(Statistics have been taken from your local MLS, Montana Regional)