“Housing Recession” has been a trending topic as of late, and with that, our office has been fielding many queriers on this topic. So today, we’ll dive into the question: Are We In A Housing Recession? And 3 reasons why this Revel Team says NO.
1. Rising Equity
Over the past 3 years, the Average Sales Price of a residential listing in Whitefish, Montana rose 33%. In Flathead County, that number is +40%, and in Kalispell, it’s +42%. While monthly Average Sales Prices have been on a bit of a rollercoaster over the past year (Whitefish’s Average Sales Price in July dropped significantly, down 107% from the month prior (to $892,161), whereas, it bounced back 36% in August to $1,389,241, +51% from August ’21 and +36% from the month prior) the increases over time support a strong, stabilizing market.
2. Market Activity
In a recent report, Lawrence Yun, chief economist for the National Association of Realtors, said “We’re witnessing a housing recession in terms of declining home sales and home building.” While, nationally, that might compute, here in Western Montana, we continue to see a rise in inventory – and sales.
Last month, we saw an increase in the number of properties under contract. Between August 1-25, 2022, the number of residential listings under contract jumped by more than 58% in Flathead County, to 137 listings (versus only 57 in July). We saw similar increases in Kalispell (+59%), Bigfork (+70%) and Whitefish (+32%).
Additionally, the average price per square foot of those listings under contract is higher than those from July ($713/ppsf in Whitefish in August, versus $553/ppsf in July).
Land listings under contract also increased across the board, ranging from a 76% increase in Flathead County, to +70% in Kalispell and +116% in Bigfork. (Whitefish saw a slight decline at -33%, from 4 listings under contract in July to 3 in August).
3. Time to “Pending”
Gone are the days of listings going under contract in hours or days. Now, listings are taking weeks or months to change status. Of the 25 residential listings that went under contract or pending in August (dates: 8/1 – 8/25) in Whitefish, they sat, on average, for 54 days before going under contract. In Whitefish, there were 3 land listings under contract (8/1 – 8/25), with an average days on market at 49, before going under contract.
Remember the term “velocitization” we referenced in a previous blog post? We’re used to the speed of the past 2+ years, and need to reacclimate to the market of today. Things are still selling, so be patient.
While buyers have begun to slow their buying pace, much in part to the increased mortgage rates that have jumped (to 5.72%, once below 3.3% at the end of last year), keep in mind that today’s mortgage rates are still well below those of their predecessors. While we might never see rates below 3% again in our lifetime, what one industry expert dubbed “a gift from the gods,” it’s important to see the possibility and potential of rates that sit at 5.72%. Local lenders have some excellent packages ready to help first-time or experienced home buyers. Allow us make introductions to help bring your real estate goals to life.
It is our job – and our great pleasure – to assist you in navigating the real estate industry in calm waters, and otherwise. We’re here; to talk, advise, research, compare and provide our expert analysis, whenever you want or need. Contact us or swing into the office anytime.