This report covers the residential land market in Kalispell Montana as of the end of July 2023. The number of monthly sales and active listings increased while land parcels under contract decreased. Unlike the residential housing market, the residential land market remains a buyers market.
INVENTORY
As of early August 2023, there were 148 residential land parcels for sale in Kalispell which is nine more than July's inventory.
Five or more acres
Of the land currently for sale 40% of the listings include five or more acres. This percentage is slightly higher than last month's report. 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 $4.9M with an average price of $760K.
The lowest priced listing is 10.4 acres with steep slopes, no zoning or covenants. The property already has a completed perc test. The highest priced parcel is the same as last month. It is 795 acres with multiple building sites, a road system, and views.
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 4.75 acres and in price from $130 to $550K with an average price of ~$238K. 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 last seven months of land sales in Kalispell, you can see that as you purchase more land, the average price per acre decreases.
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 July 2023, 14 land parcels sold which was 27% more than last month and 75% more than July of 2022. While that sounds like a big jump, year-to-date sales in 2023 are 27% lower than in 2022. Further there are currently 22 land sales under contract which is less than last month. The land market remains softer than the same time last year.
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. Year-to-date 2023, land took 6.7 months to sell which shows an increase over the last few years.
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 July 2023, $2.9M of land was sold, 64% less than last July and 12% less than than last month. Land parcels currently under contract have a list price value of close to $4.8M. Next month's results may be lower than this month depending on which of the contracted sales close. So many factors go into the $ value of land sold that this is more of an informational fact than a predictive one.
In terms of the lowest and highest prices for a land parcel sold, the lowest priced parcel in July was .07 of an acre in town close to the Rails to Trails system. That was listed at $105K. At the other end of the price range was a 5.3 acre parcel in the valley with views. This was listed at $425,000.
SUMMARY
The land market has slowed significantly in the last year and remains a buyers market. 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 posted at thehousekat.com.
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