Data Collection Finds Only 6% of Out-of-State Missoula Home Buyers ~ Missoula Current
One of the region’s largest mortgage lenders has reported a slight increase in the number of home buyers arriving from outside Montana over the past year, although the increase dispels the myth that newcomers out of state seize all available houses in Missoula.
Missoula real estate agents reported similar trends, citing a small increase in the number of out-of-state buyers, but nothing overwhelming. They suggested that many of these buyers were former Montanais returning home with well-paying jobs.
While data regarding migration can be difficult to collect, the Missoula Organization of Realtors recently aggregated figures for Missoula mortgage lenders and where their clients are from.
“We’ve always used census data for migration data, but there’s an 18-month lag around that,” said Jim Bachand, CEO of the Missoula Organization of Realtors. “We felt like there was so much noise about being a Zoom city, we needed better data quality around it.”
The numbers, featured in this year’s housing report, found that a lender was responsible for nearly 15% of all home purchases in 2019 and 16% in 2020.
The lender was responsible for 224 home purchases in 2019, of which 12.9%, or 29 sales, to out-of-state buyers. The figure rose during the pandemic when the same lender made 272 home purchases of which 18.7%, or 51 sales, were to out-of-state buyers.
“This is enough statistically valid data to give it direction,” Bachand said. “When we were done with this data on the migration side, we did a litmus test [within the industry] and they thought it was about right.
The increase of about 6% during the pandemic was considered an accurate figure by the industry in Missoula.
“There has been a slight uptick, and that 6% looks about right,” said Shannon Hilliard of Ink Realty Group. “Many of these people came back with enough income to pay for a house because they brought their work back with them.”
According to the figures, Washington and California were the largest sector of buyers arriving from outside Missoula. Oregon, Colorado, and Kentucky were also on the list, as were Ohio, New York, and Illinois.
When it came to seeing Missoula as a potential place to live, Seattle was at the top of the list, accounting for almost 7% of all searches. Salt Lake City followed with 6.1%, with New York, Los Angeles and Dallas rounding out the top five.
Bozeman accounted for over 2% of all searches for homes in Missoula and landed 10th on the list.
“The place where people are looking surprised me,” Bachand said. “I thought Salt Lake was a surprise. Some of the other numbers were for the number of people within the state who saw Missoula as a potential place to settle down to buy a home.
Regardless of the origin of a buyer, the industry in Missoula continues to face a lack of supply and rising housing costs. The median price of a home in Missoula hit $ 420,000 for the first time in the first quarter of 2021.
That’s far less than some of the areas homebuyers are looking for, although it is beyond the budgets of most current residents of Missoula.
“I think it’s a challenge for potential buyers,” Bachand said. “There’s no question it’s a sellers market in Missoula when you look at the low inventory. As a community, we need to find a way to get inventory to make up the supply at all prices. “
These efforts have started, but it will take time for supply to match demand. Several large affordable housing units are under construction, including the Vallagio and Trinity projects which together will bring nearly 400 new units to the market.
The city and county are also putting in place the necessary infrastructure to accommodate up to 6,000 new homes in the greater Sx͏ʷtpqyen area. A number of subdivisions have been approved in the area and are already under construction.
“The Sx͏ʷtpqyen project area will relieve some of that pressure, but it’s not in the short term,” Bachand said. “We won’t be able to build a house in two weeks. The reality is, it’s not there today. “