First Quarter Market Report
The first quarter of 2022 has not shown much, if any, show down except for perhaps continued lack of inventory has impacted total volume. Here is the review of the first quarter of 2022 by the numbers. According to the Montana Regional Multiple Listing System there were 2 condos sold in 2021 first quarter and 6 sold in 2022, for a 200% increase quarter over quarter. The reason you'll see is that most developers are going with townhouses vs. condos because of financing. Financing condos, where you do not own the ground but only to the interior walls, is more difficult. We see many of these selling for cash to avoid the financing difficulties. The condo market in Ravalli County went from $454,000 in sales and jumped to just under $2 million in the first quarter of this year. The average sale price jumped a whopping 43% from the first quarter of last year to this.
Compared to condos, townhouses sold at a rate of 6 in the first quarter of 2021 vs. 10 in 2022. the volume went from $1.65 million to nearly $3.8 million and the average townhouse went from $274,731 to $378m339 in 2022 which is a 37% increase and they sold at 99% of ask. Most were new construction.
For residential sales, they went from 155 units to 137 units which represents a lack of inventory. The total residential sales were $99 million vs. $90.5 million. The average home went from $639,364 in the first quarter of 2021 to $660,500, up 3% over the same period last year. The list to sale price was 99%. This was a super competitive market. The number of units were down by 11% and the volume was down 8%. This reflects the continued inventory shortage. There is still plenty of competition in the price range below $700,000 and we are still seeing some offerings 10% over ask.
For land sales, we saw 93 units sold in 2021 and 51 in 2022 for a decrease in units by 45%. The volume went from just under $20 million to $13 million in 2022 for a 34% decrease and the average sale price for a residential land parcel was $213,988 in 2021 to $255,751 in 2022 for a 19% increase and the land parcels sold 96% of the list price in the first quarter of 2022.
Here is a visual look at the data in a graph. Listing are on the upswing, listing prices still continue to rise, we have less inventory and it is going out the door fairly quickly and contrary to my prediction in December, Sold to List Ratio is creeping back to 100% across the region. As we go into spring, more buyer activity has impacted the days on market and things are starting to heat up.....so to speak.
C&C Real Estate Team Enters the Flathead Lake Market
Craig and Char are exited to announce we have entered the Flathead and Lake County markets. Char is now in the EXIT Realty Polson office on beautiful Flathead Lake. Our grandfather was a pioneer in the Flathead Cherry industry and we're so proud to be able to take our services to clients in that market. If you are looking in the area from Flathead County to Ravalli County, we are your real estate resource. We have 40 years of combined real estate experience and the Siphers Family has been serving their clients since 1966, trust an original.
Enjoy this video about Flathead Lake but be sure to call US for buyer representation!
| How Does Inflation Affect Home Prices? |
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If you've followed the news lately, you've probably seen quite a bit about inflation. The consumer price index jumped 0.8% in February, bringing the total increase over the last 12 months to 7.9% – this is the largest annual jump in the last 40 years.
So, how does all of this affect the real estate market?
The Inventory Issue
Interest rates have been kept low for so long it's created a bubble for everything and not just the housing market. There's also inflationary pressure on the housing market because of limited inventory. Limited inventory stems from a myriad of problems in the industry.
First, many homeowners aren't putting their houses on the market. This is due to factors like lockdowns, but also the fear they won't be able to find a new home to buy.
There are construction delays due to supply chain bottlenecks as well.
Low inventory means buyers are often having to put in bids well above asking to get properties, creating a frustrating situation, to say the least.
Other Inflationary Effects On Real Estate
There are a few other ways inflation can influence how much you pay for a home.
First, inflation is a reference to a rise in the price of everyday goods. Those everyday goods are used to build homes. If the price of things like lumber and appliances go up, then the builder will pass those additional costs onto the buyer in the form of higher prices.
In some cases, however, inflation can have oppositional effects on real estate. If inflation rises, then theoretically, money should become more expensive to borrow. People borrow less of it, so there are fewer home purchases and that can lead to lower prices.
Real Estate Can Protect You Against Inflation
While real estate can be negatively affected by inflation in the form of higher prices, it can also protect you from its effects.
As home prices go up over time, you're lowering the loan-to-value of your debt. You're simultaneously increasing your equity, but your fixed-rate mortgage payments will stay the same.
If you’re a real estate investor earning income from rental properties, then you're likely going to be able to charge higher rent when inflation is up. You can adjust the rent while the mortgage stays the same.
The relationship between housing and inflation can go in both directions. If you're a buyer right now, inflation isn't good news, but if you own a home, it can be one of the best ways to protect yourself against rising prices. |
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| Disaster Prep: Do You Have a Home Inventory? |
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Disaster can strike anytime, anywhere.
Last year, for instance, aside from experiencing a pandemic, the U.S declared 58 disasters which caused billions of dollars in damage, according to the Federal Emergency Management Agency (FEMA).
 Especially during the aftermath of hurricanes, we learn just how many Americans lack hazard insurance. Those who did have it faced the challenge of trying to figure out how to tally up their losses. It's not easy to recall everything one owns, especially when confronting devastation. Then, there are the other losses a homeowner might face, such as those from theft and fire.
Being prepared will help to avoid delays in receiving an insurance payout should you someday face a disaster.
Dig Out your Homeowner Insurance Policy
If you're like many of us, it's still in the sealed envelope in which it arrived in the mail, shoved into a box or bin of “important papers.”
Get to know exactly what coverage you have and how to submit a claim should the unthinkable happen.
Then, create an inventory of your belongings. Many people choose an old-fashioned checklist (such as the one offered by NYCM Insurance or at Allstate.com), while others use video (narrated with the necessary information), or photographs labeled with the information that insurers require when considering a claim.
Information required by insurers:
- Each item's description and the quantity (ex: 2 sterling silver candlesticks)
- Name of the manufacturer (ex: Tiffany & Co.)
- Make/model/serial number
- The date (or estimated date) of purchase
- Where the item was purchased
- The appraised value of each item (or an estimate)
- If you can’t find the written appraisal for any item, jot down the name and contact information of the appraisal company and the date the items were appraised.
Keep your Inventory Safe
It's important to find a safe spot, off-site, to store your inventory. You may choose to store it in the cloud with a backup service or save money by backing up the information to a USB drive and then placing it in a safe deposit box.
Tips from the Experts
- The Insurance Information Institute recommends that you include possessions that are stored somewhere else (like a storage facility) in your inventory.
- Keep all receipts and copies of appraisals with your inventory.
- Keep a count of each item, such as "5 long-sleeve shirts, 7 pairs of sneakers…"
- Break your inventory-taking into chunks. If you try to do too much of it at once, you may become overwhelmed and drop the project.
Finally, run the inventory by your insurance agent to ensure that you have enough coverage. The time to get clear on your insurance coverage is before a disaster strikes. |
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