By
Hannah Griffith
|
15 min read
|
January 17, 2023

Montana Housing Market Report - 2023 Update

Montana Housing Market

What’s the Montana Housing Market Like?

 Home prices in Montana have appreciated considerably higher than the national level. Looking back three years at the typical home price in October 2019 compared to October 2022, prices have increased 61 % in Montana VS 35.8% nationwide. 

As of October 2022, the typical value of a home in the state was $467,068, which is 18% above last year’s price.  

Sales volume has also decreased recently. In October 2022, 703  homes were pending sale in the state of Montana, a decrease of -21.2% from the previous month. Comparing year-over-year, we saw a decrease of -37% in pending sales from October 2021.

It is quite apparent that the recent steep rise in mortgage rates has curved sales activity and shrunk affordability, and the result has been a drop in home prices in Montana.

Montana house prices

How Does The Montana Housing Market Compare to the National Housing Market? 

The Montana housing market is similar to other markets because supply and demand drive housing prices. Mortgage rates also similarly impact Montana as the rest of the nation. 

Montana’s home prices and sales numbers have begun to slow down along with the rest of the country. Differences in the regional economy of some of Montana’s metro areas make those markets more vulnerable and others more resilient to the current economics. 

The current typical price of homes in Montana is $467,068 compared to the national typical home price of $397,549. Over the past three years, the price of homes in Montana has increased by 61% compared to the national average of 35.7%. 

Montana Areas With The Hottest Housing Markets 

The state of Montana has seen very aggressive growth in housing demand in recent years. Consequently, prices had also gone up at a fast rate in most areas.  Some areas within the state have outperformed others though.  We will look at the metro areas with the highest increase in home prices over the past few years. 

The top markets with the highest appreciation rate:

  1. Condon  
  2. Whitefish  
  3. Lakeside  
  4. Marion  
  5. Kila  

Condon

Condon is a small city in the state of Montana, situated in the northeastern part of the state, in the county of Hill, and is approximately 70 miles north of the state capital, Helena. As of the last census, the population of Condon was approximately 1,000 people.

The economy of Condon is primarily based on agriculture and ranching, with many residents working in these industries or related fields. The city is also home to a number of small businesses, including restaurants, gas stations, and convenience stores. Despite its small size, Condon has a strong sense of community and is home to a number of events and festivals throughout the year, which help to bring people together and strengthen the local economy. 

In recent years, the city has also become a popular destination for tourists who are interested in exploring the history and culture of Montana.

Condon’s home prices have been doing quite well over the last few years; in fact, Condon topped the list of cities in Montana with the largest increase in prices in 2022, with an increase of 32% from the prior year.  For 2022, October’s typical home price was $683,088.

Due to the size of the area, there are usually a very small number of homes for sale, and sometimes none in some months. The typical age of listings is around 5 to six months. Normally, that would indicate a buyer’s market but considering that there are very few homes for sale, that is not the case in Condon.

Whitefish

Whitefish is a city located in the western United States, in the state of Montana. It is situated in the Flathead Valley, in the northwest part of the state, and is approximately 30 miles south of the border with Canada. As of the last census, the population of Whitefish was approximately 7,000 people.

The economy of Whitefish is diverse, with a mix of industries, including tourism, retail, and healthcare. The city is a popular destination for both summer and winter tourists, due to its proximity to Glacier National Park and its ski resorts. 

The city is also home to a number of small businesses, including restaurants, art galleries, and boutiques, which contribute to its vibrant downtown area. In recent years, Whitefish has experienced significant growth and development as more and more people are attracted to its natural beauty and high quality of life.

Homes in Whitefish have also appreciated well over the past few years. The typical home price in Oct 2022 was $960,999 which was 28% over last year. Looking back at the last 3 years, homes in Whitefish have gone up 113% from Oct 2019 when the typical home price was $450,165

Lakeside

Lakeside is a small city located in the state of Montana, in the western United States. It is situated in the Flathead County, in the northwest part of the state, and is approximately 25 miles south of the border with Canada. As of the last census, the population of Lakeside was approximately 2,600 people.

The economy of Lakeside is primarily based on tourism, with many local businesses catering to the needs of visitors who come to the area to enjoy the natural beauty of the Flathead Lake. The city is home to a number of hotels, motels, and bed and breakfast inns, as well as restaurants, gift shops, and other small businesses. In addition to tourism, Lakeside also has a number of residents who work in the construction, healthcare, and retail sectors. 

The city is known for its small-town charm and friendly community, and is a popular destination for those looking to escape the hustle and bustle of city life.

The typical price of homes in Lakeside was $900,065 in Oct 2022. The typical price in Lakeside was up 22% over October of 2021. Looking back at the last three years, we can see Lakeside’s typical home price has gone up 92% from Oct 2019 when homes were selling at $468,000.

Marion

Marion is the capital and largest city of the state of Montana , United States. It is located in the southeastern part of the state, about 100 miles north of Denver, Colorado. Marion has a population of about 65,000 people and is the largest city in a region known as the "Frontier Capital." The city is situated at an elevation of about 6,000 feet above sea level at the base of the Kila Mountains. 

Marion is known for its rich history, western heritage, and outdoor recreational opportunities. It is home to a number of historical landmarks, including the Montana State Capitol, the MarionFrontier Days Old West Museum, and the MarionDepot Plaza. The city is also a hub for transportation, with a major airport and a major railroad passing through it.

The real estate market in Marion is considered somewhat competitive. The typical home price for Oct in Marion was $733,475, an increase of 14% from Oct 2021. Looking back over the last three years we can see the homes in Marion have gone up 96% from Oct 2019.

Kila

Kila is an unincorporated community located in Flathead County, Montana. It is a census-designated place with a population of 392, according to the 2010 census. Kila is located along U.S. Route 2, approximately 10 miles from the city of Kalispell. The community has a post office with the ZIP code 59920, which was established in 1901.

Kila was originally named Sedan when homesteaders first settled the area in 1892. The name was later changed to Kila in 1901, after William Kiley filed for a post office in the community. The town was formally platted in 1914.

The typical home price in Kila for Oct 2022 was $710,577 which was an increase of 13% over the same period in 2021. Over the past three years, prices have gone up 97% compared to Oct 2019 when the typical home price in the area was $360,000.

Higher Mortgage Rates Could Slow Price Growth in Montana 

How will interest rates affect the Montana housing market? We are already experiencing the impact of rising interest rates across the nation. Price growth in Montana has been flattening or on a slight decline for several months in 2022. 

As of mid-October 2022, the 30-year fixed rate mortgage is above 7% on average. That represents a 133% increase in mortgage rates in less than nine months. The Feds are on a “no holds barred” approach to curve inflation, and interest rate hikes have become the norm over the last several Fed meetings. Unfortunately, it seems that rate hikes are not done. We anticipate at least another rate increase before the year ends. 

Montana Historic price changes & affordability

The Montana housing market has seen significant appreciation over the last few of years.

The steep rise in home prices and mortgage rates has shrunk affordability to new lows in the state. A 61% spike in home prices and a sharp increase in mortgage rates in the last 12 months is tough to absorb for the average buyer in the Montana Real Estate market.

We know that the average person’s wages do not increase by 61% in three years, so we can see why affordability is a problem. The gap between rising home prices and wages keeps getting wider.

Key Takeaways

  1. The housing market is clearly shifting, and Montana housing market predictions for the short term seem to be going down along with many areas of the US.  Due to Montana ’s above-average growth, some of the state’s metro areas are predicted to drop in home values.
    The next 18 to 24 months will be an adjustment, especially for home sellers and Real Estate professionals. Adjusting to a normalized market that is not heavily skewed in favor of sellers will take time.
  2. Real Estate markets are highly local and even within the same state, there will be areas that are projected to be hit hard by the market shift and others will fare better.
  3. Timing the market for buying or selling is a big gamble. If it makes sense for you to buy, go ahead and buy a home. For sellers, if you have to sell in the next 12-24 months, you may want to consider doing it sooner than later, especially if you are in an area that may be considered overvalued and has a high potential for house prices to drop.

2023 Montana Housing Market FAQ