Skip to main contentSkip to main content
You are the owner of this article.
You have permission to edit this article.
Edit
editor's pick alert top story

Real estate prices soar in Ravalli County

  • 0
Real estate prices soar in Ravalli County

Despite below zero temperatures, builders in the Bitterroot Valley continue working on new residential construction. The median sales price for a new construction soared to $533,898 in 2021. The year before the median sales price was $349,500. 

The challenges for people looking to purchase affordable housing in Ravalli County continued to grow in 2021.

Real estate prices climbed at record rates with median home prices rising 27.4% to $465,000. That marked nearly a 10% increase from the previous year’s record jump of 17.4% at $365,000.

In the last five years, the median price of homes in Ravalli County on less than 40 acres has doubled. In 2016, the median price was $232,875.

If rapidly rising prices aren’t enough, real estate broker Darwin Ernst said first-time homebuyers also face challenges to get their foot in the door due to a market that caters to those with cash or the ability to put a deal together quickly.

Ernst, a longtime local appraiser and real estate broker has been tracking residential housing trends gathered from information from multiple listing services for years.

That data showed only about 12% of the new home loans on the 857 sales recorded last year were financed by a subsidized loan through the Veteran’s Administration, Federal Housing Administration or similar entities often used by first-time homebuyers.

“Because home prices have risen so quickly, people can’t make those types of loans work,” Ernst said. “Those loans all require an appraisal or certain inspections to get financing. They take time. People can’t make them work. They are competing against buyers with cash or more purchasing power.”

“It’s a huge stumbling block for people just beginning to get into the housing market,” he said. “It’s hard to compete with cash.”

More than a quarter of the 857 sales last year were paid for with cash offers.

The purchasing power of buyers is a critical component to success in buying a home now in Ravalli County, Ernst said.

“Cash in hand is the number one way to get to the head of the pack,” he said. “Having a large down payment or the ability to be flexible on a move-in date or a willingness to forgo inspections move you up the ladder. If you need special financing or can’t afford to move into a home that needs a bunch of things fixed, then you’re at the lower point of the totem pole.”

At this point, there’s nothing that indicates that home prices will begin to swing back in the other direction any time soon.

“We’ve not seen this before where the market is on a continual climb,” Ernst said. “We always thought when we saw the market rise, we knew it would eventually come back down. There are a lot of predictions the market will slow in 2022 compared to 2021, but that’s all speculative at this point.”

“Right now, there his nothing to show that there will be a great decline in the current upswing in property values,” he said.

Currently, the average time to sell a home in the Bitterroot Valley is 107 days. There is just a little over a month of residential inventory available on the Ravalli County market.

Last year’s 857 sales were the second-highest number in the last 21 years. The highest number of sales occurred in 2020 when 901 residential properties were sold.

While some people assume that a lack of inventory is driving the price increases, Ernst said that’s not true.

“There is plenty of inventory throughout the year but it’s just going real fast,” he said. “Due to that, there’s not that much inventory on the market at any given time…There is a lack of affordable inventory.”

At the time Ernst put together the data earlier this week, there were 79 residential properties on the market in the county. At the rate that homes sold last year, that number would sell in 1.27 months.

In Hamilton, there were 19 residential properties. In 2021, there were 291 residential sales in that market.

“Right now in Hamilton, there’s less than one month’s inventory,” Ernst said. “It’s truly a seller’s market.”

Last year also saw an uptick in the price of newly constructed homes. The 97 homes listed on MLS had a median sales price of $533,898. In 2020, the median cost was $349,500.

That price was driven by several factors, including rising land costs and builders facing increased charges for materials and labor, Ernst said.

With many of the lots from subdivisions created years ago now gone, the median price for land (zero to 40 acres) rose 34.62% last year from $130,000 in 2020 up to $175,000. The land also sold much faster than in the past. In 2020, the average time it took to sell a parcel was 425 days. Last year, that dropped to 191.

There were 299 parcels of bare land that sold in 2021, which was down from 401 the previous year.

“In 2020 there was still a lot of land available from subdivisions that dated back to 2008 or earlier,” Ernst said. “Most of all of that is gone. Now there’s an urgency to buy whatever becomes available even if it isn’t the dream property that had people had in mind when considering a move to Montana.”

“There are still a lot of people coming here,” Ernst said. “It’s still the last best place. If people can afford to move and work from home or retire, this is a place that they can continue to want to come.”

0 Comments
1
0
4
0
13

Be the first to know

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Get up-to-the-minute news sent straight to your device.

Topics

News Alerts

Breaking News