Kalispell Market Report: Land – January 2022

Kalispell Market Report: Land – January 2022

This report covers the residential land market in Kalispell Montana as of the end of January 2022. Land sales increased slightly, properties under contract increased significantly and the total value of land sold was higher than in December. Demand for Kalispell Montana land is still strong.

INVENTORY

As of early February, there were 54 residential land parcels for sale in the Kalispell area which is 20% less than the previous month, the sixth decrease in a row.

Five or more acres

Of the land currently for sale, 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 $175K to $5.2M with an average price of $1.3M.

The listing at the lowest end of the price spectrum remains the same as the last few months. It is ~20 acres of property southwest of Kalispell that could have views with some tree clearing. The highest priced parcel is 20.4 acres of riverfront property that has the potential for rezoning.

Below five acres

In terms of the listings below five acres, many are located in developments. These parcels currently range in size from .19 of an acre to 4.57 acres and in price from $150K to $1.2M with an average price of ~$334K. 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 $100K and another $400K 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 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 month 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.

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 January, 16 land parcels sold which was the same as January 2021 and was 3 more than last month. With 49 land parcels under contract at this time, next month’s sales results should be higher than this month’s. The number of sales is fairly typical of this time of year but the number of sales under contract is nearly double the land parcels under contract last month. Demand remains high.

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. Obviously land is moving faster than it has in the past. 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.

2021 total land sales equaled $69M which was 33% higher than 2020. In January 2022, $5.7M of land was sold, which was double the same time last year and 33% more than last month. Since the number of sales in January 2022 was the same as last year and only slightly higher than last month, it is evident that either land prices have increased or more valuable land is selling. Both are true.

The 49 land parcels currently under contract have a list price value of close to $20M. 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 January sold for less than $160K. It was .70 acre of land in a neighborhood on the east side of town. At the other end of the price range were 86 acres of land with no covenants or zoning and views of the Swan Range. This sold for more than $1M.

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 – January 2022!