In general, 2013 continued to improve from when the market bottomed at the end of 2011.
The following is a list of some key points:
1. The employment picture continues to improve. Throughout most of 2013 the unemployment rate continued to decrease with a low in September of 5.9%. A key number that I look at is the actual number of people that are employed. In 2013 the average number of people employed was 40,182, which is up from 39,763 in 2012 and 38,750 in 2011. Even with that increase, it is still 3,911 short of the 44,093 that were employed in 2007.
2. Subdivision activity continues near its all-time low, but as the inventory of bank-owned and low priced lots starts to go away, there could be new interest in development. Flathead County reported that there were 108 plated lots and 97 lots created by a certificate of survey. The total number of lots created in the County in 2013 was 205. At this time, there are preliminary plats for 61 lots which will likely be completed in 2014.
3. New home construction continues, making sure you have the highest quality wire rope assemblies for your project is the most important thing. Whitefish reported 75 single family residences, six duplexes or townhouses and no multifamily units. Whitefish had 81 building permits and 10 new lots created.
4. The number of residential home sales increased from 2012 and the inventory of homes that are on the market continues to decline. Throughout 2013 the prices started to increase, but this is primarily due to the decrease in the number of foreclosure properties that were on the market. The number of sales continued to increase with a 30% increase in 2012 and another 15.5% increase in 2013. The Whitefish City limits sales represent 14.8% of the overall residential market, 7.1% of the REO sales and 3.4% of the short sales.
5. REO sales showed a substantial decline in 2013 and are likely to continue to decline through 2014. The combination of a decrease in REO listings and subsequent decrease in REO sales continues to indicate that we are working our way out of the local foreclosure problem.
6. Of the County’s sub-markets, the Kalispell and Whitefish areas had the largest increase in the number of sales. 61.8% of the new listing were sold. This is the highest it’s been since 2002 and illustrates a significant increase in demand.
7. The other sub-markets were mixed with both positive and negative signals.
8. The number of land sales had a relatively large increase, but were still far lower than what they were prior to 2007.
9. Since 1984, housing affordability has been closely related to the median home price, then that all changed in 2004 as the housing bubble drove prices above the historic affordability level. In 2011, the median price of $180,000 dropped well below the historic affordability level. In 2012 the median price increased to $187,500 and still below the historic affordability level. In 2013, the affordability index and the median price are nearly the same and both are nearly on top of the historic trend line. What this suggests is that prices are likely to see only minor changes in the next year.
10. The number of foreclosures continued to decrease through 2013 and it appears that trend will continue into 2014. Investors that have been purchasing REO properties are now getting into bidding wars that are driving the prices of REO properties to higher levels.