Home Mortgage Demand, Sales Strong in Montana’s Bitterroot Valley

According to the Billings Gazette, Montana’s Bitterroot Valley appears to be keeping the national real estate slump at bay… at least for now.

Hall and Hall, a real estate brokerage firm, recently announced the October sale of a 1,200-acre ranch near Stevensville - for a hefty $14 million.

Closings at the high end of the Montana housing market aren’t necessarily trend indicators, but other factors also point to a relatively healthy housing market in the Bitterroot Valley.

“I really don’t see a big drop in sales. I don’t see a big drop in price,” said Layna Lyons, executive officer for the local Realtors’ group.

• In the Bitterroot, the market slowed for a couple years in the 1990s, but in 2000 it picked up again and continues to grow.
• In 2000 through December 14, the median price for a residence under one acre was roughly $93,000, according to the Bitterroot Valley Board of Realtors.
• This year, that price increased to $169,500.

“Quite a jump,” Lyons said.

Over the same period, condos increased from roughly $98,500 to $125,000. Bob Pauley, incoming president for the Board of Realtors, said the 2006 Montana real estate market looks similar to the previous year’s market.

“I haven’t noticed a very big dip,” Pauley said.

He said homes in the $200,000-300,000 range have sold well this year for his firm, Private Properties. The firm hired two more real estate brokers, too, for a total of seven.

The national picture appears bleaker as foreclosure rates are up across the nation, according to the National Association of Realtors, which predicted that home sales in 2006 will be 9 percent lower than sales in 2005. Since August, home prices have fallen, according to the association.

National trends, though, can take a while to hit Montana.

“There’s … truth to the notion that there’s a lag time,” said Hall and Hall’s Bill McDavid.

McDavid said the relatively stable market in Western Montana has surprised some buyers, offering more affordable mortgage loans than they’d expected. Many expected to find real estate in Western Montana following the decline in the rest of the country.

While Bitterroot real estate doesn’t appear to be heading into the tank, Lyons said she sensed the market cooling slightly over the summer.

“I can’t say that it was anything real drastic,” she said.

Pauley said sales of homes in the $100,000-180,000 range slowed a little, at least in the past four months. At that level, qualifying for a home loan is a bigger stretch - and market fluctuations tend to carry the most weight.

She doesn’t expect the Bitterroot to experience a crash, but she doesn’t believe the valley will escape unscathed from the national housing market downturn, either.

“I think we all feel like there’s going to be some kind of change,” McDavid said.

Any market fluctuations won’t have a huge effect on parties searching for multimillion-dollar properties, such as the Kootenai Springs Ranch.

“They don’t care to wait for it (the market) to settle. They want it. They want it now. They’re going to buy it,” Lyons said.

And that’s exactly what’s happening. Hall and Hall experienced a record year in 2005, and 2006 looks strong, too. Its partners work with buyers who aren’t subjected to the threat of rising home mortgage rates, McDavid said. Most buyers purchase with cash.