Kalispell Market Report: Land – February 2023

This report covers the residential land market in Kalispell Montana as of the end of February 2023. Similar to last month, sales continue to remain low and available inventory has 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 March 2023, there were 153 residential land parcels for sale in Kalispell which is slightly less than February’s inventory of 161. This is the fourth drop in monthly inventory in a row but inventory remains much higher than last year at the same time.

Five or more acres

Of the land currently for sale only 26% 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 $175K to $2.9M with an average price of $767K.

The lowest priced property is a listing with 5.6 acres of land up a road with sometimes tricky access and no HOA or covenants. The highest priced parcel remains the same as the last few months. It is 20 unzoned acres with creek frontage, well, power, septic, water rights and a partially finished home.

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 5 acres and in price from $125K to $950K with an average price of ~$258K. 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 two months of land sales in Kalispell*, you can see that as you purchase more land, the average price per acre decreases.

*Since there were no sales of 40+ acres yet this year, the 2022 annual average was used for that category.

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 2023, only eight land parcels sold which was 33% fewer than last year but two more than last month.  There are currently 35 land sales under contract which is less than last month. The land market has softened over the last year..

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. In both January and February 2023, land took about six months to sell.

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 2023, $2M of land was sold, 59% less than last February but 30% higher than last month. Land parcels currently under contract have a list price value of close to $9.1M. 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 February was listed for $175K. It was 1.7 acres in the Countryside Estates development. At the other end of the price range was a 20 acre parcel in central valley with mountain views. This was listed at $499K.

SUMMARY

The land market has slowed significantly. If you are interested in purchasing land in Kalispell, now is the time to do so with lower competition and 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 – February 2023”!