On July 22, the home at 648 Lakeside Blvd. in Lakeside, with 170 feet of Flathead Lake frontage, sold for $1,106,000, according to Trails West Real Estate. The transaction would appear unremarkable, except for the fact that it was put on the market two years ago for $3,999,000—and it's the first lakefront property to be sold all year.
So goes the high-end real estate market around Flathead Lake, which two to three years ago was considered one of the hottest—and safest—markets in the country, only to sink like a lead fishing weight.
"I don't really know what to say," says Jim Kelley of Kelley Appraisal in Kalispell, "other than high-end properties are probably the weakest, the softest area of the market. In general, anything that falls in the category of second home or luxury home or high-end property—anything that would typically require out-of-area buyers to come in and buy it—then that's the softest."
According to numbers crunched by Kelley using Multiple Listing Service data, the first half of 2006 saw 46 lakefront home and condominium sales. The first half of 2009 saw none. It's the first time in the 26 years Kelley's kept data that there's been a six-month period with no residential sales on Flathead Lake.
As for prices, the average lakefront home price during the first half of 2007 was $1,160,716. During the first half of 2008 it dropped to $678,648—a loss of 41.5 percent.
"There are several properties that are on the market for 10 percent to 20 percent below their 2005 and 2006 purchase prices, and are still not selling," Kelley writes in his July market trends update. "In some cases there have been price reductions in excess of 60 percent from what they originally were priced at."
And Kelley, for one, doesn't see an end in sight.
"It's kind of like about a month ago when [Vice President Joe] Biden came out and made the comment that the current president and his administration didn't anticipate things being as bad as they are right now, and that recovery is going to be longer," Kelley says. "They have all the economists in the world to give them the numbers, and they still didn't know what was happening. I just think it's going to be a while before we start to pull out of this."