Kalispell Market Report: Land – August 2023

Kalispell Market Report: Land – August 2023

This report covers the residential land market in Kalispell Montana as of the end of August 2023. The number of monthly sales and parcels under contract increased while active listings decreased. Unlike the residential housing market, the residential land market remains a buyers market. That being said, this month does show some signs of slow movement towards a more balanced market (very slow).

INVENTORY

As of early September 2023, there were 130 residential land parcels for sale in Kalispell which is 18 less than August’s inventory.

Five or more acres

Of the land currently for sale 37% of the listings include five or more acres. This percentage is slightly lower than last month’s report.

I define rural as those properties in the 5+ acre category. Those are most likely to be parcels located on a gravel mountain road, agricultural farming land, or acreage adjacent to National Forest or lumber parcels. They are often not located in a development, but by themselves, and provide privacy and multiple building and usage options.

The currently active properties over five acres range in price from $225K to $4.9M with an average price of $776K.

The lowest priced listing is the same as last month. It has 10.4 acres with steep slopes, no zoning or covenants. The property already has a completed perc test. The highest priced parcel is also the same as last month. It is 795 acres with multiple building sites, a road system, and views.

Below five acres

In terms of the listings below five acres, many are located in developments. These parcels currently range in size from .09 of an acre to 4.77 acres and in price from $130K to $550K with an average price of ~$243K. Many of these come with monthly or annual HOA fees. They are also often covered by CCRs or Covenants, Conditions and Restrictions which define rules for building and living in that area.

PRICING

Price per acre can vary dramatically and often doesn’t seem to make sense when viewing prices. Why is one 20 acre parcel priced under $200K and another $500K or more? Great question. Following are some pricing rules that seem to be true for land.

The first is, every parcel is unique. With land, you can’t say the average price is $/acre, and this is a 20 acre parcel and therefore it should be $/acre times 20 acres. Instead, the specific topography, physical and legal access, utility availability, distance from town, potential usage, views, zoning, covenants and more need to be taken into account in order to come up with a legitimate price point. If you are thinking of selling your property and are told by an agent that the average price for land in Kalispell is a certain amount, and that you can just multiply that by the number of acres you have, call me. That’s simply not the way the process works.

The second general rule is that the more land you are selling or buying, in general, the less you should expect to pay per acre. For example, looking at the last eight months of land sales in Kalispell, you can see that as you purchase more land, the average price per acre decreases.

Bottom line

The bottom line with land in Kalispell, Montana is that every piece is unique, with different requirements, rules, views, utility options, amenities and of course prices.

SALES

In August 2023, 17 land parcels sold which was 21% more than last month and more than double August 2022. While that sounds like a big jump, year-to-date sales in 2023 are still 15% lower than in 2022. There are currently 26 land sales under contract which is four more than last month. The land market may be showing signs of slowly strengthening.

Length of Time to Sell

Land listings typically take longer to sell than home sales. The average days on market for land in 2021 was 5.1 months which was significantly less than the previous year. In 2022, the average was also 5.1 months. Year-to-date 2023, land took 6.8 months to sell which shows an increase over the last few years.

PRICES

Average or median sales prices are meaningless when discussing land sales. The qualities of one lot over another are so different as to make most comparisons moot. That being said, I am including a view of the total dollar value of all land sold per month to provide some kind of comparison to the previous year.

In August 2023, $3.9M of land was sold, 31% more than last July and 34% more than last month. Land parcels currently under contract have a list price value of close to $7.1M which is 50% more than last month. Next month’s results may be higher than this month depending on which of the contracted sales close. So many factors go into the $ value of land sold that this is more of an informational fact than a predictive one.

In terms of the lowest and highest prices for a land parcel sold, the lowest priced parcel in August was 2.3 of an acre with power in place and septic approval. That was listed at ~$120K. At the other end of the price range was a 4.7 acre parcel with direct access to a nature preserve. This was listed at $450,000.

SUMMARY

The land market remains a buyers market but increasing sales and parcels under contract may indicate a slight market shift. If you are interested in purchasing land in Kalispell, now is the time to do so with significant choices. Every piece of land is unique, even those in a development. Views can be dramatically different just moving from one acre to another. I love walking land with clients! If you are interested in selling or buying land, and you want to work with a boot-wearing broker who is ready to find the borders, call me at 406-270-3667. I’d be happy to help!

To see previous land-related market reports, click here.

Thanks for reading “Kalispell Market Report: Land – August 2023”!