Kalispell Market Report: Land – December 2022

Kalispell Market Report: Land – December 2022

This report covers the residential land market in Kalispell Montana as of the end of December 2022. Land sales continue to remain low and available inventory declined slightly. The residential land market in Kalispell has slowed from the robustness of the last few years. Additionally, unlike the residential home market which is still a slight sellers market, Kalispell land is currently experiencing a buyers market.

INVENTORY

As of early January, there were 166 residential land parcels for sale in Kalispell which is slightly less than December’s inventory of 178. This is the second drop in monthly inventory in a row.

Five or more acres

Of the land currently for sale 31% of the listings include five or more acres. 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 $2.9M with an average price of $772K.

The lowest priced property includes 8 acres of land with county road access and nearby electric. The highest priced parcel has 20 unzoned acres with creek frontage, well, power, septic, water rights and a partially finished home. The 14 acre parcel that was priced at $2.9M and was last month’s highest priced listing expired without selling.

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 4.88 acres and in price from $125K to $1.8M with an average price of ~$253K. 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 past year 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 December, only three land parcels sold which was 77% fewer than last year and 40% less than last month. Last December saw 13 sales compared to 3 this December. There have been no months with this few sales in at least the last decade. Land sales in 2022 were lower in every month compared to last year. There are currently 31 land sales under contract which is also lower than last month. It’s obvious the land market has softened.

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 December 2022, it took nearly six months on average for the three parcels to sell (although three sales are not statistically significant).

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 December 2022, $1.45M of land was sold, 66% less than last December and 11% less than last month. Land parcels currently under contract have a list price value of close to $6.6M. 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 price parcel in December sold for around $200K. It was 1.8 acres on the east side of town. At the other end of the price range was a 3 acre parcel with the possibility of building 36 multi-family units. This sold for slightly under $1M.

SUMMARY

The land market has slowed significantly since last year. If you are interested in purchasing land in Kalispell, now is the time to do so with lower competition and more 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.

Thank you for reading Kalispell Market Report: Land – December 2022!