Kalispell Market Report: Land – February 2022

Kalispell Market Report: Land – February 2022

This report covers the residential land market in Kalispell Montana as of the end of February 2022. Land sales decreased, properties under contract increased and the total value of land sold was slightly less than January.

INVENTORY

As of early March, there were 49 residential land parcels for sale in Kalispell which is 9% less than the previous month, the seventh monthly decrease in a row.

Five or more acres

Of the land currently for sale, nearly half 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 $7.8M with an average price of $1.7M.

The five+ acre listing at the lowest end of the price spectrum is ~8 acres of forested land along a county road. The highest priced parcel is 115 acres adjacent to Route 93, with potential for commercial, industrial or residential building.

Below five acres

In terms of the listings below five acres, many are located in developments. These parcels currently range in size from .16 of an acre to 4.99 acres and in price from $130K to $1.2M with an average price of ~$325K. 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 two months of land sales in Kalispell, you can see that as you purchase more land, the average price per acre decreases. Price per acre generally drops as you buy or sell more land. Interestingly, in all categories except the 1-4.9 acre group, prices have decreased in the last month.

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 February, 12 land parcels sold which was 25% fewer than January and 57% fewer than February of last year. The decrease over last month isn’t too surprising since it is still winter and some parcels are hard for buyers to access, but the large decrease over last year may mean the huge land rush in 2020-2021 started by the pandemic may be settling down. That being said, there are 57 land parcels under contract at this time, so it is quite possible that next month’s sales results will be much higher than this month’s. Only time will tell.

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 year before. In January 2022, land sales took 3.9 months to sell on average but in February, that measurement was nearly 5 months. It will be interesting to see how this measurement changes over the next few months. Property that is priced well for its location, services and amenities can sell relatively quickly.

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 February 2022, $5.0M of land was sold, 11% less than last February and 12% less than last month. That being said, the land parcels currently under contract have a list price value of close to $27M. Next month’s results may be higher than this month’s, depending on which of those under contract deals close.

In terms of the lowest and highest prices for a land parcel sold, the lowest price parcel in February sold for less than $170K. It was 2 acres in a neighborhood on the west side of town. At the other end of the price range were 114 acres of land with no covenants or zoning and views of mountains and valleys. This sold for around than $1.6M.

The bottom line about prices for land – no matter your budget, you can find options in your price range!

SUMMARY

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 – February 2022!