MISSOULA — The lack of housing in Missoula has been a long-standing issue, but the Missoula Organization of Realtors has found a slight improvement in the market.
The MOR Five Valleys Housing Report is an annual data set on the yearly trends in the Missoula housing market.
The 2024 report has found a slight improvement in some areas compared to the years prior.
The report was released during a press conference at the Missoula Public Library on Monday, March 4, 2024.
Home prices in Missoula are continuing to increase but at a less aggressive rate. In 2021, housing rates increased by 28.6% over the year. In 2022, the rates increased by 15.5%, but in 2023, rates increased by 5.8%.
Also in 2021 and 2022, as housing prices increased at a rapid rate, wages did not increase, causing more of a disparity.
In 2023, however, wages began to increase, moving closer to catching up with the rising housing prices.
The median family income currently in Missoula is $80,000 to $100,000, according to the report.
“Hopefully, home ownership or renting a home is starting to become more affordable,” Matt Gehr, a Mann Mortgage lender and panelist at the 2024 Five Valleys Housing Report conference, says. “It's still not where it needs to be, but we're headed slowly in the right direction. So a couple years from now, we might arrive at a situation of balance where the average wage supports the average cost of housing, but it might take some time. It's getting better but we're not there yet.”
Other good news highlighted in the report was increased support for the houseless Missoulians.
There were 114 fewer people in the Homeless Management Information System than there were last year.
The main change Missoula needs in order to continue on the path of improvement is to increase the housing supply.
“Demand is really low right now for housing because of the high cost but supply or inventory of housing is also very low, and because the supply is low, that's prevented low demand from bringing prices down,” Gehr says.
In 2023, there were 400 additional housing units created in Missoula. Plus, the vacancy rate of homes increased to 4.4%. A healthy vacancy rate would be 5% to 8%.
Overall, Brint Wahlberg, MOR president and local realtor, says the housing supply is approaching a normal rate.
“We've not had that for about five years now, so it's improving,” he says.
Housing supply in the report is measured by absorption rate, which is how many months the average house will stay on the market before being sold.
According to the report, the Missoula absorption rate increased from 2.64 months at the end of 2022, to 4.00 months at the end of 2023.
A market with an under-supply will have an absorption rate of fewer than 3 months, a normal supply is 3-9 months, an over-supply is 9-12 months and an overloaded market has a rate of over 12 months.
For homes between $750,000- 1 million in Missoula, the absorption rate was 14, and for homes above $1 million was 15.33, meaning there are far more high-priced homes than there are buyers in that price range.
Houses between $450,000 and $600,000 had a normal market absorption rate, but all houses under $450,000 were in an under-supplied market.
The housing supply also differed across neighborhoods in Missoula. For example, Expressway, near the airport, had an absorption rate of 0.5 months, while the area around Southgate reported a 6-month absorption rate.
“What we can understand is that buying a house is still expensive in Missoula,” Gehr says. “When you buy a house today, it tends to be very expensive for the average Missoulian. So we're working on it. We're hoping it gets better.”
Also included in the report are prices for lots of land, which have increased by 43% since five years ago, when a lot of land could be purchased in Missoula for $95,000.
Other information found in the report: there are 942 vacation rentals in the greater Missoula area, and the most popular area to search for homes for Missoulians looking to move was Ravalli County.
Overall, the Five Valleys Housing Report provides data for more than just realtors. Brittany Palmer is the executive director for North Missoula Community Development Corporation, a non-profit that advocates for affordable housing in Missoula.
Palmer attended the report presentation to learn more about her community.
“Yeah, I think the Missoula Organization of Realtors puts out some of the most comprehensive data that we have on housing, and so it's helpful for our organization to be able to kind of track what's going on as we think about how we can provide housing for all and be an advocate for housing for all,” she says.
The information is also helpful for government leaders who could use the data to make effective changes in Missoula.
“The goal of the housing report that the realtors have done has always been to provide an unbiased look at the numbers so that others can use those to make decisions,” Wahlberg says.
