Missoula real estate experts are hopeful that the era of lackluster sales and flat property values that set in when the economy tanked six years ago seems to be ending.
"We've, I think, turned the corner," says John Herring, president of the Missoula Organization of Realtors. "We've definitely seen an increase in activity."
For real estate agents, there's reason for optimism. Median home prices in Missoula increased from $198,750 during 2012's first quarter to $207,500 during the same period this year, according to MOR numbers. City data, meanwhile, shows that 98 new single-family home construction permits were issued through April of this year, or up more than 50 percent from 2012.
Sales are equally brisk, with 298 homes changing hands through the end of April. That marks a 30-percent jump from 2012 and a higher volume than at any time since before 2008.
Optimism among local agents like Herring mirrors a sentiment that's spreading among property brokers nationally. According to Standard & Poor's, median home prices across 20 sample cities rose by 10.2 percent through March of this year.
While markets gain momentum, veteran western Montana appraiser Douglas G. Smith warns that underlying factors, such as rising interest rates, will likely affect longterm property values. Since the real estate market imploded, the Federal Reserve has kept interest rates at historically low levels. That's curbed financing costs and enabled borrowers to afford more expensive homes. When interest rates climb, however, as they inevitably will, buying power will wane.
"The problem is, coming up, that the interest rates will affect the affordability of a house," Smith says.
Another factor that could slow price gains in Missoula, Smith says, is the availability of rental housing. When home prices rise, as they are now, savvy developers respond, building affordable rentals capable of satisfying need.
Similarly, he says that Missoula's freshly inked accessory dwelling unit ordinance, which enables property owners in single-family residential neighborhoods to build small rental units, could temper the value of real estate.
"I think that's a real wild card," he says.