This report covers the residential land market in Kalispell Montana as of the end of January 2023. Similar to last month, sales continue to remain low and available inventory has declined slightly. The residential land market in Kalispell has slowed from the robustness of the last few years. Additionally, unlike the residential home market which is still a slight sellers market, Kalispell land is currently experiencing a buyers market.
INVENTORY
As of early February 2023, there were 161 residential land parcels for sale in Kalispell which is slightly less than January's inventory of 166. This is the third drop in monthly inventory in a row.
Five or more acres
Of the land currently for sale only 28% 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 $299K to $2.9M with an average price of $816K.
The lowest priced property includes 5.5 acres of land with tricky access and no HOA or covenants. The highest priced parcel remains the same as last month. It is 20 unzoned acres with creek frontage, well, power, septic, water rights and a partially finished home.
Below five acres
In terms of the listings below five acres, many are located in developments. These parcels currently range in size from .09 of an acre to 4.5 acres and in price from $125K to $1.8M with an average price of ~$262K. 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.
PRICING
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 month of land sales in Kalispell*, you can see that as you purchase more land, the average price per acre decreases.
*Since there were no sales of 40+ acres or 1-4.9 acres in January, the 2022 annual average was used for these two categories.
Bottom line
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.
SALES
In January 2023, only six land parcels sold which was 63% fewer than last year but double last month. There are currently 38 land sales under contract which is higher than last month. While it is obvious the land market has softened over the last year, perhaps we will start seeing more land sales as we head into Spring.
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 2022, the average was also 5.1 months. In January 2023, the six parcels took on average 6.2 months to sell.
PRICES
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 January 2023, $1.56M of land was sold, 73% less than last January but slightly higher than last month. Land parcels currently under contract have a list price value of close to $9.9M. So many factors go into the $ value of land sold that this is more of an informational fact than a predictive one. That being said, I'd be surprised if February didn't have a higher value sold than January.
In terms of the lowest and highest prices for a land parcel sold, the lowest price parcel in January was listed for $125K. It was 0.16 acres in the Aspen Creek development. At the other end of the price range was a 20 acre parcel on a county road with electric near the property. This was listed at $499K.
SUMMARY
The land market has slowed significantly. If you are interested in purchasing land in Kalispell, now is the time to do so with lower competition and significant choices. 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.
Comments (13)Subscribe to CommentsComment