Momentum Continues to Build for Flathead Valley Real Estate Sales
Upward trends for sales and prices continue.
Fall has fully arrived with the explosion of color on the birch, maple, and tamaracks. The only question left to answer is whether or not it will snow before Halloween this year in the Flathead.
The third quarter has historically been the pinnacle on the calendar for Flathead Valley real estate. It stands to reason that the late summer months of August and September mark the transactions closing from the summer selling season. This year’s sales numbers have held to form along our road to recovery, with the highest sales volume for any quarter going back to the third quarter of 2007.
Yearly increases were significant, with a 36% increase in total volume over the same period last year. Median prices have also continued to increase by double digits. The primary driver for increased prices is the significant reduction of distressed sales in our market (see “Impact of Distressed” below). We are at a multi-year low of only 10% distressed sales. Reducing these discounted sales has the direct affect of increasing prices.
Secondary drivers include a reduced inventory, strong financial markets, and a sustained real estate recovery in “feeder markets” elsewhere in the country. It is yet to be seen if the decreasing affordability increase driven by higher interest rates and home prices will have a significant affect in our market.
Total Residential Sales from NMAR MLS
Impact of Distressed Properties on Local Market
Distressed sales continue to play a role in the Flathead Valley real estate market, but not nearly as significant as in the past 2 years. Sales of distressed homes dropped to 1 in 10 from 1 in 3 for the same period last year.
Another good sign in the distressed sales segment is the market’s relatively low inventory of bank-owned properties. Based on our current absorption rate, there is less than a one month inventory of bank-owned residential listings currently on the market compared to a 11 month inventory for the overall residential market.
Based on low inventory of distressed property, I expect to see continued upward pressure on pricing in the coming year.