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Missoula, Montana neighborhood

(The Center Square) – Montana home prices are not cooling, at least for the areas of the state covered by the Montana Regional Multiple Listing Service (MLS), its current president said.

Median sales prices reached a record amount of $502,000, Darra Norgaard, president of the Montana Regional MLS, which covers the western and central parts of the state, told The Center Square. As recently as April 2021, the median price was $385,000, almost $100,000 more than compared to April 2020.

The Mountain region had the highest home price increases two years in a row, posting a 15.8% gain between February 2020 and February 2021, according to Anastasia Burton, a spokesperson for the Montana Department of Commerce. Home prices increased by 24% in the next 12 months, the Federal Housing Finance Agency’s (FHFA) House Price Index (HPI) Monthly Report said.

The FHFA's quarterly HPI for the period ending in the fourth quarter of 2021 showed Montana ranking sixth among all states in the percentage of change in housing prices, Burton told The Center Square.

Norgaard noted that the monthly home sales average of 567 this year is down from 668 last year and 2020’s rate of 578 sales per month.

“The number of days on market has for the most part normalized this year, averaging at approximately 88 days,” she said. “This is a sharp contrast to last summer for example where this figure was in the low 30s.”

Demand from out-of-state buyers, inflation and rising interest rates have priced many Montanans out of buying homes.

Western Montana has been an escape for people now working from home, prompting an increase in out-of-state buyers, Erica Wirtala, public affairs director for the Northwest Montana Association of Realtors, told The Center Square.

“Our local buyers have been pinched out of purchasing homes as prices have risen dramatically,” she said.

Norgaard commented it was fair to say that record-high prices coupled with limited inventory have made buying a home a challenge.

“This is especially true of first-time buyers who are entering the market for the first time and in addition to battling these two factors are also seeing their purchasing power reduced as interest rates continue to rise,” she said.

The real estate experts agree that different regions have different experiences. Wirtala noted that the Montana Regional MLS does not include one of the fastest-growing and most expensive micropolitan areas: Bozeman/Gallatin County.

“Anecdotally, realtors in our Kalispell area are feeling a slight cooling of the market,” Wirtala said. “Some of this may be related to the longer cooler spring weather we are experiencing, the end of the school year and a flood of new multifamily units that are coming onto the market.”