I'll give you both sides of the argument and leave it up to you the readers to decide! These numbers aren't official as some records are usually a little delayed in reporting, but they'll give you the general idea. As always, my source is from the Missoula Organization of REALTORS(R) MLS.
2010 Sales Statistics for Missoula (Residential):
- 830 total sales. Compare to 913 in 2009, a decrease of 9% in volume. The peak year was 2006 which had 1443 sales so the 2010 numbers reflect a staggering 42.5% decrease from the peak. What's interesting though is this summer we saw a massive drought in sales once the tax credit ceased, which was projected nationally. Now in traditionally slow holiday months we've seen some numbers in 2010 that aren't that far off from the stimulus market of the year before that was propped up with the major tax incentive. This December the MLS currently shows 56 total sales, last December we saw 50. As we move forward keep in mind when comparing the stats forward to last year we're matching up against an inflated late 2009 and early 2010. The fact that this December without any government incentives was better than the last one is a big deal.
- 2010 median sales price finishes at $202,500. Compare to $208,000 in 2009, a decrease in value of 2.6% in median values. The peak year was 2006 that was $216,950 reflecting a total of a 6.7% median value decrease off the peak. Here's where this gets interesting, if you break apart the year into halves, we a median sales price for the first half of 2010 at $197,250 and then a median sales price in the second half shot up to $215,000. Once again a post-tax credit market showed some signs of value recovery. Half-way through the year I was projecting our median sales price on the year would finish under $200,000 but a stronger second half has helped that make a come-back. This COULD be a sign that prices in Missoula have bottomed out to some extent or that the downward slide in values slowed considerably in the 2nd half.
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Looking ahead to 2011 there's some key factors that I think Missoulians should be watching for when considering being active in this housing market.
1. What kind of activity is going on in your direct price-range and your direct neighborhood. Real estate is local on so many levels, just because a friend of yours can't get their home sold that's across town or in a different price bracket doesn't mean your home is in the same conditions. Certain price points and areas are selling better than others, find out where yours is. Ask your agent to research this, if they can't or don't know how, find a new one - knowing cross-sections within a market is key.
2. Keep an eye on employment. Nationally good news is brewing that job opportunities are recovering, locally we're hearing news that the Macy's building downtown is on the verge of being purchased and remodeled, and that the large Smurfit-Stone mill has an offer and will be converted to a biomass power-plant. While these activities will not get job levels back to where they were previously, they help. Additionally if new construction can rebound a bit that will also have a major impact. Think about how many people are needed to build a single house, or a single commercial building. The more of that - the better.
3. Don't put a lot of stock in comparing early 2010 to early 2009. The tax credit did lots of good things and it also really screwed up statistical reporting. A basic law of economics is that people respond to incentives, and last winter/spring was heavily incentive-laden while this winter/spring is not. If the spring numbers can even stay close to last years that's a major sign of positive recovery.
4. Get used to this new normal. Since 2008 we've had 901 sales, 913 sales, and now 830 sales. Since 2008 we've been working in a lending environment that has not had the NINA (no income-no asset) mortgages that we had seen in the years before. So this market now reflects a lending environment that suggests a sustainable volume of houses in our market is probably in the 800 - 900 houses sold per year range, not the near-1500 we had back in 2006.
5. Watch the confidence. Nationally consumer confidence is key and locally that will matter as well. Back in November Lawernce Yun the NAR cheif economist said that keeping an eye on consumer confidence will be a major indicator to recovery in 2011.
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