This report covers the residential land market in Kalispell Montana as of the end of July 2022. Similar to last month, land sales and properties under contract decreased and available inventory increased significantly. The residential land market in Kalispell is moving towards a more balanced market where neither buyers nor sellers have the upper hand.
As of early August, there were 162 residential land parcels for sale in Kalispell which is 72% more than July's inventory of 94. It is a significant increase and is the fourth month in a row of more inventory. Of note, much of the increase was related to two new developments. Starling Community introduced 10 parcels of .1-.3 acre lots to the market. And Holbrook Estates added 40 one to two acre parcels for sale. So 50 of the 162 currently active parcels were just listed in the last week.
Five or more acres
Of the land currently for sale ~36% 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 $225K to $7.8M with an average price of $1.13M. The lowest priced 5+ acre parcel is the same as last month. This is 20 acres of forested land with access issues. The highest priced parcel includes 115 acres of land adjacent to highway 93 which has residential, commercial and industrial possibilities.
Below five acres
In terms of the listings below five acres, many are located in developments. These parcels currently range in size from .03 of an acre to 4.57 acres and in price from $79K to $1.2M with an average price of ~$251K. 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 $200K and another $500K 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 in Kalispell 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 past seven months of land sales in Kalispell, you can see that as you purchase more land, the average price per acre decreases.
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 July, only 8 land parcels sold which was 33% fewer than last year and 38% less than last month. Also, there are currently only 27 land sales under contract which is 31% less than last month. As with residential homes in the area, these decreases are pointing to a market that is moving from a sellers market to a more balanced one.
Length of Time to Sell
Land listings typically take longer to sell than home sales. The average days on market for land in 2021 was 5.1 months which was significantly less than the previous year. In July, it took 3.4 months on average for the 8 parcels to sell. So far this year, sold parcels have taken an average of 4 months to sell. Property that is priced well for its location, services and amenities can sell relatively quickly.
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.
In July 2022, $8.1M of land was sold, 93% more than last July and 57% more than last month. This included a nearly $4M sale that was added to MLS for comparable purposes only. In other words, it seems to be an anomaly. Without it, results in July would have remained flat.
Land parcels currently under contract have a list price value of close to $9.4M. Therefore, next month's results should be lower 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 July sold for around $200K. It was 1.8 acres in Pheasant Ridge Estates. At the other end of the price range was 20 acres of land with no additional information available. This sold for around $4M. 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.