Distressed residential sales continue to be a major factor in the Flathead Valley real estate market, and made a drastic change of course during 2012. After peaking out at 51% of all sales reported in the first quarter of the year, they began a rapid decline; finishing out the year at 24% for the last quarter. This was the key trend that led to our modest price recovery in the market.
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 only a 4 month inventory of bank-owned residential listings currently on the market compared to a 13 month inventory for the overall residential market.
The number of distressed listings in the active market is holding steady at 8% this month, after dropping to a record low of 7% in September.
Based on low inventory of distressed property, I expect to see continued upward pressure on pricing in the coming year in the Flathead Valley real estate market.