Lets take a look at an array of stats (For Missoula urban area only):
1/1/2010 - 7/26/2010 Sales: 504 houses
1/1/2010 - 7/26/2010 Median: $199,900
1/1/2009 - 7/26/2009 Sales: 464 houses
1/1/2009 - 7/26/2009 Median: $215,000
My analysis: Neither of these numbers are overwhelmingly surprising, the first half of last year was when the tax credits were just taking hold, interest rates were higher and the stock market collapse was still resonating for everybody. Until March of 2009 I believe the tax credit for 1st time buyers was very different ($7500 and you had to pay it back) so the market was not dominated by first time buyers. Run forward to today, the entire year has been controlled by the tax credit which leads to a few things, increased (stimulated) activity, which is shown with the YTD sales being 8.6% higher than last years at this time. And a decreased median that reflects continued downward pressure on the top-end of our market and increased activity in the lower-end where most first time buyers look. The $15,000 decrease off the median is our biggest drop I've seen in recent years, it reflects almost a 7% drop.
What to watch for: the 2nd half will be very interesting, our market shifts from a first time buyers market to a move-up / move-down / investor market, which would suggest the median should shift up slightly but probably not significantly. Additionally the number of overall sales should slow as there isn't an incentive for people to hurry up an buy. Right now looking in the MLS there are 108 houses listed as under contract or under contract / actively searching for backup offers. The current pace of sales puts Missoula on par for a year very similar to last years at about 870 - 900 sales, however without incentives and continued national concerns on the market I expect continued slowing trends overall, I'd be pretty surprised if there are over 800 homes sold this year in the Missoula urban area through our MLS.
Next up, lets branch from residential and see how the investment market is looking (duplex/triplex/:
1/1/2010 - 7/26/2010 sold: 24
1/1/2010 - 7/26/2010 median: $235,000
1/1/2009 - 7/26/2009 sold: 19
1/1/2009 - 7/26/2009 median: $271,500
My analysis: A slight uptick in activity shows some renewed activity in the investment sector for Missoula, that's a good thing (only 15 sold in the same range in 2008 and 20 in 2007). While the return of activity is good, the median price shows what part of the market is moving, and what part isn't. Properties that need to sell are going for a discount and have pulled the median down sharply. I looked at the median list to median sales price and in 2008 the difference between list to sale was just $5000, in 2009 it was $25,500, and so far this year in the same range it has been $11,950. So the era of getting rental properties at a big discount could be over, for now. It's good to see investor interest returning!
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