Residential sales see boost as prices settle out

Signs that the real estate market in Flathead County might be making a come-back is welcome news to buyers and sellers, but it has come with a price as the market adjusts to the past four years of recession.

According to figures released from Kalispell-based Kelley Appraisal, residential sales in 2012 from January through September were 29 percent higher than for the same period last year. Multiple Listing Service data show a total sales volume of $60 million for September alone, the highest monthly figure since October 2007.

The 1,002 units sold this year compares well to the 743-unit average for the same calendar period over the past four years, but it’s still 21 percent below the average for the same period in 2005 through 2007, according to Jim Kelley’s data.

While sales volume figures spiked, prices appear to be settling out. Median prices of residential units for the first nine months are just 0.6 percent higher than for the same period in 2011. But median prices declined 25 percent during the recession, from a high of $250,000 in 2007 to $186,700 in 2012.

A major influence on prices has been foreclosures — 31 percent of the residential units sold in the first nine months of 2012 were bank-owned properties with a median price of $150,000.

“There are currently a lot of bank-owned and distressed properties on the market, and as that inventory starts to deplete, we’re likely to see stronger prices,” Kelley said. “The price picture is likely to improve as demand continues.”

Kelley collects foreclosure data directly from the Flathead County courthouse. His figures indicate the number of foreclosures has declined each month since October 2011 from around 10 per 1,000 units to around 7.5 in September and October this year.

Comparing the county data with figures from Foreclosure.com, the foreclosure rate in the Flathead is slightly higher than for the U.S. as a whole but much better than in Arizona, Nevada and California, although California numbers are improving.

Land sales in the Flathead have also seen a positive change, increasing 58 percent for the first nine months to 231 properties in 2012 compared to 146 for the same calendar period last year.

In fact, land sales through September this year topped land sales for all of 2011 by 14 percent, but it has come with a cost — the median price dropped 28 percent from $85,000 for the first nine months of 2011 to $61,000 for the same period this year.

It’s worth noting that the volume of land sales dropped significantly every year for the four years preceding the Wall Street meltdown, from a high of 864 in the first nine months of 2005 to 252 for the same time period in 2008, a 70 percent decline. The median land sale price for the same calendar period dropped 49 percent from a high of $120,000 in 2008 to $61,000 this year.