This report covers the residential land market in Kalispell Montana as of the end of November 2021. Land sales and the number of active listings have decreased for the second month in a row. Properties under contract increased slightly as did the total value of land sold. Sales might decrease as we move into the winter months, but buyers are still active!
As of early December, there were 79 residential land parcels for sale in the Kalispell area which is slightly less than the previous month, the fourth decrease in a row.
Five or more acres
Of the land currently for sale, more than half of the listings include five or more acres. I define rural as those properties in the 5+ acre category. Those are most likely to be parcels located on a gravel mountain road, agricultural farming land, or acreage adjacent to National Forest or lumber parcels. They are often not located in a development, but by themselves, and provide privacy and multiple building and usage options.
The currently active properties over five acres range in price from $175K to $5.9M with an average price of $1.2M.
The listing at the lowest end of the price spectrum is ~20 acres of property southwest of Kalispell. The property could have views with some tree clearing. This parcel saw a $10K price decrease in the last month. The highest priced parcel remains the same - 20 acres of riverfront property that could be rezoned for multi-family use.
Below five acres
In terms of the listings below five acres, many are located in developments. These parcels currently range in size from .19 of an acre to 4.57 acres and in price from $75K to $1.2M with an average price of ~$286K. Many of these come with monthly or annual HOA fees. They are also often covered by CCRs or Covenants, Conditions and Restrictions which define rules for building and living in that area.
Price per acre can vary dramatically and often doesn't seem to make sense when viewing prices. Why is one 20 acre parcel priced under $100K and another $300K or more? Great question. Following are some pricing rules that seem to be true for land.
The first is, every parcel is unique. With land, you can't say the average price is $/acre, and this is a 20 acre parcel and therefore it should be $/acre times 20 acres. Instead, the specific topography, physical and legal access, utility availability, distance from town, potential usage, views, zoning, covenants and more need to be taken into account in order to come up with a legitimate price point. If you are thinking of selling your property and are told by an agent that the average price for land is a certain amount, and that you can just multiply that by the number of acres you have, call me. That's simply not the way the process works.
The second general rule is that the more land you are selling or buying, in general, the less you should expect to pay per acre. For example, looking at the last nine months of rural land sales in Kalispell, you can see that as you purchase more land, the average price per acre has decreased. Price per acre generally drops as you buy or sell more land. These numbers have remained fairly steady for the last few months.
The bottom line with land in Kalispell, Montana is that every piece is unique, with different requirements, rules, views, utility options, amenities and of course prices.
In November, 12 land parcels sold which was 65% less than October of last year and 37% less than last month. This is the third month in a row with decreasing sales. With only 26 land parcels under contract at this time, next month's sales results should be similar to this month's.
Length of Time to Sell
Land listings typically take longer to sell than home sales. The average days on market for land in 2020 was 7.3 months. In November, land sales took 4.3 months and year to date sales have averaged 5.2 months. Obviously land is moving quicker than it has in the past. Property that is priced well for its location, services and amenities can sell relatively quickly. For example, in November one parcel sold just two and a half weeks after listing!
Average or median sales prices are meaningless when discussing land sales. The qualities of one lot over another are so different as to make most comparisons moot. That being said, I am including a view of the total dollar value of all land sold per month to provide some kind of comparison to the previous year.
As can be seen in the chart below, 2020 total land sales equaled $52M which was more than double the previous year. Through the end of November, $65M worth of land has sold, already exceeding the entire year of 2020. That being said, the market does appear to be slowing slightly since the summer.
In November 2021, $4.6M of land was sold, which was 41% less than the same time last year and slightly more than last month. The 26 land parcels currently under contract have a list price value of close to $10.5M. Next month's results may be higher than this month's, depending on which of those under contract deals close.
In terms of the lowest and highest prices for a land parcel sold, the lowest price parcel in November sold for less than $130K. It was 5 acres of land with a roughed in driveway, power on property and septic approval. At the other end of the price range were 522 acres of land with no covenants or zoning. That land also had potential development opportunities. This sold for around $1.9M.
The bottom line about prices for land - no matter your budget, you can find options in your price range!
Every piece of land is unique, even those in a development. Views can be dramatically different just moving from one acre to another. I love walking land with clients! If you are interested in selling or buying land, and you want to work with a boot-wearing broker who is ready to find the borders, call me at 406-270-3667. I'd be happy to help!
To see previous land-related market reports, click here.
Originally published at thehousekat.com.