Real Estate’s Road to Recovery

Report shows strong improvement in Flathead County’s sales and foreclosures

Supporting the widespread perception that Flathead County’s real estate market is recovering, an annually anticipated report shows solid improvement in sales and foreclosures in 2012, and slight gains in new construction. Housing remains affordable with low interest rates and buyer confidence appears to be on the rise.

Yet signs of the downturn persist, with bank-owned properties still making up a large percentage of sales. And land sales and subdivision activity remain near their historic lows.

Those trends are gleaned from a 2012 Flathead County real estate market report released by Jim Kelley of Kelley Appraisal earlier this month. Real estate professionals use the report each year to guage the health of their industry, which has been a mostly depressing exercise since the housing market crashed.

But, as Kelley’s report suggests, there is now reason to approach the numbers with more optimism. Kelley notes that one contributing factor to the improvement is the better employment picture in the valley.

“In general, 2012 was a substantial improvement over 2011,” Kelley writes.

Residential sales last year were the highest since 2007, with 1,332 countywide. That’s up 29 percent from 2011 and 46 percent from 2009, when there were only 912. Bank-owned properties accounted for 27.6 percent of home sales, down from 33.6 percent the previous year, though the total number increased.

Of the county’s sub-markets, Bigfork saw the largest increase. Counting the area within five miles of Electric Avenue, Bigfork’s sales shot up 76.4 percent from 72 to 127.

Within 3.5 miles of city limits, sales increased in Columbia Falls by 37.6 percent from 101 to 139; in Whitefish by 17.4 percent from 218 to 256; and in Kalispell by 26.2 percent from 442 to 558. The Lakeside area saw a 43.8 percent jump, from 48 sales in 2011 to 69 in 2012.

Lakefront home sales on Flathead Lake rose 38.5 percent in 2012 from 52 to 72. On Whitefish Lake, sales were up 63.6 percent from 11 to 18. That’s down from a high of 56 in 2005.

The median price of a home sale in the county remained near a four-year average at $187,500, which is down substantially from its 2007 peak of $250,000. The median was $160,000 in the Kalispell area; $245,000 in Whitefish; $162,000 in Columbia Falls; $238,840 in Bigfork; and $220,000 in Lakeside.

Columbia Falls saw the largest jump in median price at 13.4 percent, while Lakeside saw the steepest fall at 9.7 percent.

“(There) are good indications that prices bottomed out in 2011, were stable in 2012 and will likely remain that way in 2013,” Kelly writes.

Foreclosure notices were down 26.5 percent from 862 in 2011 to 634 last year. There were 1,187 notices in 2010. Full foreclosures also dropped from 481 to 323.

Commercial real estate sales increased from 32 in 2011 to 52 in 2012, though 23 of the sales were bank-owned. There were only 18 commercial sales in 2010.