Volume in Missoula continues to do well, today is Februrary 24th (77 residential sales in the Missoula Valley YTD / 177 total sales in the MLS YTD). Missoula as well as the entire MLS have not out-paced our quicker start in volume of sales since 2008... that's right pre "bubble" considering it was the start of 2008. I went back and looked at volume of 1/1 - 2/24 going all the way back to 2003, you can see the "ramp-up" and the cool down, and now the slow and steady volume recovery. I'm very encouraged to see that volume is continuing to notch up, especially considering it's out-pacing 2010 when that market 2 years ago propped up with the 1st time home buyer tax credit. Here's a chart showing the volume trends over the same date range going back 9 years now.
So volume is slowly and steadily working it's way back, that's a good thing. Unfortunately this is paired with a growing concern of mine in regards to home values. Looking at the same date range and over the last 9 years here are the median sales prices observed.
So what jumps out? Well a few things to me, first of all it's no shock that we saw a fast rise in the boom years and it's often been reported that Missoula has really not lost a lot of its home values despite the big slow down. Secondly, 2009, holy cow what happened there? Well think back to that time, the stock market had just collapsed, there were no home buyer incentives that were effective in the market, banks were failing, and the government was rolling out the first of a few bailout plans. A lot of buyers exited the market and the overall diversity of buyers dwindled (its no surprise to also see 2009 was the lowest in volume).
The concerning thing to me is the drop from 2011 to 2012 and the reason why is mostly due to foreclosures. 2011 wasn't influenced very much by foreclosures (just about 10% of our total sales volume). The big reason why was the slow-down in foreclosed homes re-listed by banks due to the "robo-signing" fallout and lawsuits. That is now behind us and banks are free to re-list these properties. 2012 (and probably 2013) will be the last big glut of foreclosures to hit the market, that should continue to drive up volume as investors take advantage of low prices and low interest rates. However that will really impact equity for homeowners all across the valley.
So far early trends are pointing to median sales price falling back down and not holding to 2011's final median sales price, however it's early. This is something I'm going to continue to track this year. I foresee that with more foreclosed listings entering our market we're going to see great opportunities for buyers and investors but it's going to come at the cost of lost home values for current home owners.