“How can we continue to have a hot housing market when it’s getting harder and harder to buy a home?”
The State of Missoula Housing Report, issued March 21 by the Missoula Organization of Realtors, prompted that question from City Councilman Don Nicholson and many others. The report provides a range of information on Missoula’s housing market, including the puzzling and bothersome fact that recent growth in home prices more than triples the growth in incomes, and yet there’s more demand than ever.
The median price for a home in Missoula swelled from $140,000 in 2001 to $185,000 in 2005—a 30-percent increase—while the U.S. Department of Labor found that average annual pay in Missoula increased from $26,181 to $28,625—a 9-percent increase—during the same span. Rapid increases in the cost of bare land are even more shocking: In 2001, the median cost of a lot was $43,450 but that price nearly doubled by 2005 to $90,000.
That means it’s getting harder and harder for average Missoulians to afford even down payments on homes, a difficulty reflected in Missoula’s low rate of homeownership: 50 percent compared to 69 percent in the rest of Montana and 66 percent nationally, according to the U.S. Census Bureau. And despite persistent murmurs of a burst in the national housing bubble, MOR’s picture of Missoula doesn’t forecast any ease-up in local housing costs.
“It is a difficult time to buy housing in Missoula,” says Collin Bangs, a local developer and panel member at the press conference. “If you don’t own a home, now is the time to buy one, because we don’t see it improving.”
The report (which can be fully viewed at http://www.missoularealestate.com/docs/2006Stateof MissoulaHousingReport.pdf) is one thing, but what we choose to do with the data is another.
Audience members, including a handful of City Council representatives, talked about ways the city can help encourage affordable housing. Smaller lots and higher density—which require appropriate zoning and infrastructure like sewer—are obvious answers, but anyone within shouting distance of Missoula knows too well the fierce debates those ideas have engendered over the last several years.
“This is our struggle, this is our tension: People don’t like density and they don’t like sprawl,” says Heidi Kendall, the councilwoman who leads the Plat, Annexation and Zoning Committee that tackles this issue each week.
Well, then, hope they like renting.