MISSOULA - The latest report from the Missoula Organization of Realtors (MOR) illustrates how hard it is to buy a house, with the housing supply at an all-time low.
That's one of the major findings in the newly-released Five Valleys Housing Report, which shows continued pressure from high demand, and not enough homes on the market. And the report suggests that squeeze continued to be fueled by historically low interest rates at 3.25% for a 30-year fixed loan in 2021.
MOR says the "absorption rate", which measures the number of homes for sale in the market divided by the number of sales, plunged to less than a month in 2021, at .64 months. In normal market conditions that supply would support three to nine months of demand. The estimated gap in housing supply by the end of the year was 640-homes.
New listings had dropped 8.9% by year's end, with just 61-active listings in December.
And that tight supply continues to push the envelope of what buyers are willing to pay for a home. MOR says buyers were paying an average of 103% over list price. But perhaps more critically, the market pressures have pushed the median sales price up 28.6% to a new high of $450,000 in 2021.
And the picture isn't very encouraging for renters. Vacancy rates have dropped to 1.3%, far below the 5% to 8% considered "healthy" for the Missoula market. And average rental prices for a two bedroom apartment have now climbed about $1000 a month.
The researchers say there may be some relief in sight. Permits for new homes jumped 141.1% last year, the highest in twenty years. Final plat approvals for the city and county also soared by 193%, showing builders responding to the demand.