Montana Housing Market: Immune to Slump?

When John Kunz, owner of The Falls Real Estate agency in Great Falls, attended a national Coldwell Bank convention not long ago, the atmosphere was a bit gloomy.

“A lot of the [mortgage brokers], especially from out on the East Coast, were kind of down in the dumps,” he said. “Their markets are flat and slow now, after a few years when everything was increasing so much and moving so fast.”

Kunz, on the other hand, a 12-year veteran of the local Montana housing market, is in a pretty good mood.

Montana is among the top four states when it comes to housing appreciation rates, according to the Office of Federal Housing Enterprise Oversight. Appreciation increased 11.7 percent between the first quarter of 2007 and 2006 in Montana. Utah had a 17 percent increase, Idaho’s was 12.3 percent and Wyoming tied with Montana.

During the same period, appreciation values in the Michigan housing market, and Massachusetts dropped .7 percent and .6 percent, respectively. They are among the 19 states with appreciation rates lower than the national average of 4.25 percent.

Nationwide, home sales dropped 6.6 percent and the median price fell 1.8 percent in the first quarter, according to the National Realtor Association.

“Property prices in Montana are still very reasonable, comparatively,” said Kunz when asked why Montana skipped the national housing slump. “Especially in Great Falls.”

The local real state market is following the state’s appreciation trend, said Realtor Jan Popa. Last year, the average selling price of a single family home was $148,620.

This year, so far, the average price is $165,585.

It’s not quite a hot sellers’ market, however.

“Our market is turning some what, but it’s not a crisis,” she said. “There are about 100 more homes in the market now than at this time last year. But we are insulated from the national bubble burst. We were left out of the boom, but that means we are getting left out of the bust too.”

Julie Topel-Evans, a Realtor with The Falls Real Estate, says not long ago Great Falls Montana mortgage holders were seeing appreciation levels of 12 to 18 percent a year.

“That’s done,” she said. “We are back at 3 to 4 percent, which is more typical of the Great Falls market.”

Other areas of Montana, most notably Bozeman and Kalispell, are beginning to see their markets stall, said Kunz.

“Those are the areas that saw huge increases just a couple of years ago,” he said.

The Flathead area, for instance, has two to three times the number of homes on the market compared to last year, said Greg Strable, owner of Mountain Front Appraisal Services.

“They are actually starting to see property values decline,” he said.

In contrast, Montana home prices in Great Falls continue to increase at a stable pace.

It’s a market Strable and his wife, Adria, are confident enough to invest in. After fixing up Greg’s mother’s home at 2526 1st Ave. N. for sale, the couple decided to buy a fixer upper to rehab then sell.

“This isn’t a boom or bust market. With the right property, you can make a profit,” Adria Stable said.

Right now they are listing Greg’s mother’s four bedroom, two bath home with a one car garage for $158,000, its appraised value. There’s been a lot of interest, but no offers so far.

“We’re getting great feedback, but it’s just a matter of waiting right now,” Adria Stable said.

SOURCE: The Great Falls Tribune