This story was originally published by Daily Montanan: URL: https://dailymontanan.com This story has not been altered or edited. (C) Daily Montanan. Licensed for re-distribution through Creative Commons license CC BY-NC-ND 4.0. ------------ Missoula Organization of Realtors: Buyers paying cash, supply at "all time low" – Daily Montanan ['Keila Szpaller', 'More From Author', '- April'] Date: 2022-04-19 00:00:00 Last year, one in every five homes in Missoula sold for cash, and supply is at an all time low, according to the Missoula Organization of Realtors. Pressure continues to build in the housing market in communities across Montana, but few solutions — more homes — are coming on line in Missoula compared to the need, according to the 2022 Five Valleys Housing Report presented Tuesday at the Missoula Public Library. Last year, the median price of a house in the Missoula metropolitan area was $450,000, and in the first quarter this year, it hit $500,000, said Brint Wahlberg, chairman of the housing report. In 2020, cash transactions hit 17.75 percent of residential sales, and last year, they rose to 21.55 percent. But new homes aren’t going up quickly, and the supply gap is 447 units, the MOR said. In 2021, the City of Missoula approved one preliminary plat with seven lots, and Missoula County granted four preliminary plat approvals with 11 lots, according to the MOR. “These numbers are difficult to hear,” said Mandy Snook, board president of the Missoula Organization of Realtors. “Data is an essential piece of problem-solving, and the data is clear: We need more housing.” Just last month, a panel of housing professionals representing the public, nonprofit and affordable private sector told the Local Government Committee of the Montana Legislature the situation is a crisis and affecting economic development in Montana. In Missoula on Tuesday, one of the panelists pointed the room full of real estate professionals to the upcoming 2023 Montana Legislature. “We are headed into a legislative session, and there are certainly statewide regulations that impact our ability to grow and build,” said panelist Karissa Trujillo with Homeword, a sustainable housing development organization. The dearth of supply in Missoula indicates a seller’s market, with new listings dropping 8.9 percent in 2021 in one year, according to the MOR. The MOR pointed to other pain points in this first quarter of 2022 as well: Town homes are selling at 106 percent of their asking price, condominiums at 104 percent of their asking price, and single family homes at 103 percent of their asking price. The market hasn’t seen a steady amount of supply since the first quarter of 2016, or for over five years, Wahlberg said. “That has been a long contributor to these rapid gains in median sales prices,” he said. *** The vacancy rate is marching toward zero percent, and renters are running into trouble as well. By comparison, a healthy rental market has a vacancy rate of 5 percent to 8 percent, according to the MOR. Panelist Jim McGrath, with the Missoula Housing Authority, pointed to a disconcerting data point related to housing vouchers, which allow a renter to pay 30 percent of their income toward rent and have the Housing Authority pay the difference. McGrath said the program is critical to helping people in the community, such as those who are disabled or senior, and in the past, the program’s success rate was in the mid- to high-70 percent range. Now, however, rents are higher than what federal rules allow for reimbursement, and it means just five or six out of 10 people can put a voucher to use. In other words, he said a vital resource from HUD, the U.S. Department of Housing and Urban Development, isn’t working in Missoula because of market conditions. Even if a unit is available, the voucher might not help because of price. “This is an unbelievably serious turn of events,” McGrath said. “This is the first time this has ever happened.” Last year, he said an affordable development opened for seniors with 36 units: “Of course, it filled up immediately.” Another two developments with affordable homes, each with some 200 units a piece, will open at the end of the year and into 2023. “We’ll see in one year basically, two decades worth of production of housing, and that will certainly make a difference, but it will be a drop in the bucket,” McGrath said. The vacancy rate is tightening, and rents are going up too, averaging $1,064 for a two-bedroom unit. Paul Burow, with Professional Property Management, said the vacancy rate continues to head toward zero, and it’s already at 0.9 percent this year, with no improvement in sight. Rents year over year went up roughly 5 percent in 2021, but with the summer turnover, the increase accelerated the last half of the year “like a hockey stick,” he said, putting the quarter to quarter increase at 16 percent. “When summer comes around again, it’s probably going to continue,” Burrow said. Trujillo, with Homeword, noted the housing price index shows steep increases in Missoula and Gallatin counties. In Missoula, she said home prices have increased 2.5 times since 2000, and in Gallatin, they’ve increased more than three times in the same period. “HPI is one of many economic indicators that investors will use to keep pulse on broader economic trends,” Trujillo said. In its report, the MOR noted the permitting process suggests future improvements, with 1,330 residential building units permitted in 2021 by the City of Missoula, a 141.4 percent increase from the previous year “and the highest number in two decades.” The report noted final plat approvals for the city and county increased 193.3 percent, for 349 buildable lots. “Affordable housing units built increased 66.7 percent (36 units) in 2021,” said the MOR in a news release with its data. “However, there are over 270 in the pipeline. Both the City and County continue to work on process improvements to help the development community bring additional housing to the marketplace. “ [END] [1] Url: https://dailymontanan.com/2022/04/19/missoula-organization-of-realtors-buyers-paying-cash-supply-at-all-time-low/ Content is licensed through Creative Commons license CC BY-NC-ND 4.0. via Magical.Fish Gopher News Feeds: gopher://magical.fish/1/feeds/news/montanan/