Flathead midsummer temperatures are rising, but one is the cooling of the housing market.
For the first time before the pandemic, housing and land sales declined in the Flathead Valley, with numbers in the first and second quarters of 2022 significantly lower than in the same period last year. Meanwhile, Flathead residents continue to fight the confounding problem of limited housing supplies and exorbitant prices.
Whitefish resident and independent real estate broker Patrick Neagle said the market began to fall sharply around May. Both home sales and prices have fallen in the region. This is a phenomenon that he attributed to many factors, especially the inflation control policy implemented by the Federal Reserve.
“We are worried about buyers entering the market as interest rates rise,” Neagle said.
In the first two quarters of 2022, Flathead County recorded 845 home sales. In contrast, there were 1,195 units in the same period in 2021, 966 in 2020, and 889 in 2019. Quarterly of the year compared to 557 for the same period in 2021, 304 in 2020, and 275 in 2019.
Flathead’s decline in sales reflects national trends. May, US existing home sales It was It decreased by 8.6% from a year ago to 5.41 million units. With the construction of single-family homes nationwide, the construction of new homes is also at a standstill. under 15.7% from last year. Many projects remain unfinished, as inflation pushes up the cost of housing construction and developers can’t afford to see them until they’re done.
Mark Cool, owner and director of Kalispell’s Performance Real Estate, said: “We still have huge buyer demand and inventory shortages.”
Price cuts may seem promising to anyone looking for a reasonable housing option, but Kuhl says it’s just a readjustment of the exorbitant costs of a pandemic. Although cheap, valley homes are not affordable for many and are associated with high interest rates.
The rapid changes in the housing market in northwestern Montana occur shortly after the real estate boom caused by the pandemic. During that time, many non-statisticians worked in remote areas and moved to the area to escape the crowded cities. In 2020, Montana Net income Of the 6,661 partial-year state tax filers, a significant proportion migrated from California, Washington, Colorado, and Oregon to the state. In Flathead County, 4.5% of these tax filing growth was seen. During the pandemic month, new arrivals earned an average of about $ 110,000, higher than the average Montana resident earns.
Nagle said he sold his property to a number of buyers from Seattle, Texas, the Bay Area, and Southern California during the pandemic, many of whom sought investment property to build a “dream home.” rice field.
He predicts that as supplies continue to decline and prices continue to rise, wealthy real estate buyers can survive turbulent markets much more easily than valley middle-class and working-class residents. doing.
“I think the calculations will be done by the end of next year,” Neagle said. “Cash will be the king. We definitely see people falling out of the market. They are just not competing.”
Mr. Nagle said Whitefish’s status as a resort town is easy to “stick to its value”, helping the real estate market remain relatively hot despite the national recession, but in other valleys. He explained that the same is not true.
“Fallout is more common in Kalispell than in whitefish,” he added, “not looking good” for anyone looking for affordable housing options.
Neagle expects home sales to decline further into the fall as inflation and interest rates continue to weigh on the purchasing power of Americans.
“The valley is wrestling with some big changes,” he said. “This year will be a lean year, and people are rethinking their financial focus.”