Kalispell Market Report: Land – July 2021
This report covers the residential land market (active listings and sales) in Kalispell Montana as of the end of July 2021. Similar to the housing market, there are signs that the market is slowing down from last year’s highs.
As of early August, there were 92 residential land parcels for sale in the Kalispell area which is flat with the same time last month. That remains great news for buyers since higher inventory levels equate to more choices.
Five or more acres
Of the land currently for sale, half of the listings include five or more acres. While most of the land in Montana could be considered rural, 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 $125K to $22.6M with an average price of ~$1.8M. The listing at the lowest end of the price spectrum is 5.4 acres of property west of Kalispell. The property has a roughed in driveway with septic approval and covenants. The highest priced parcel is listed as residential but is marketed for future development. It includes 226 acres of land off Route 93 near the Majestic Valley Arena.
Below five acres
In terms of the listings below five acres, many are located in developments. These parcels currently range in size from .12 of an acre to 4.97 acres and in price from $75K to $899K with an average price of ~$240K. 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.
Price per acre can vary dramatically and often doesn’t seem to make sense to those viewing prices. Why is one 20 acre parcel priced under $100K and another $300K 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 last seven months of rural land sales in Kalispell, you can see that as you purchase more land, the price per acre has decreased. Price per acre generally drops as you buy or sell more lan
Note: This information will be updated monthly to provide a running average for 2021 sales.
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.
Land sales are beginning to slow down. In July, 12 land parcels sold which was 43% less than last month and 59% less than last year. Interestingly, in July of 2019 thirteen sales closed which is basically the same as July 2021. It is quite possible that the surge in sales in 2020, which were probably pandemic related, has ended. 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 2020 was 7.3 months. As of the end of July, 2021 is slightly faster with land taking 6.3 months (on average) to sell. During July, the fastest time from listing to sale was 2 weeks while the longest was one year and ten months. The takeaway is that land that is priced well for its location, services and amenities can sell quickly. In addition, even land that’s been on the market for quite a while is now selling.
As mentioned previously, my explanation of the longer timeframe to sell land as opposed to homes has to do with the buyer market. There are fewer buyers who want to start from scratch, buying the land and then waiting for a home to be built. And those buyers who ARE interested in doing so have very particular requirements. It could take a long time for them to find the right parcel.
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.
As can be seen in the chart below, 2020 total land sales equalled $52M which had been more than double the previous year. In July 2021, $4.2M of land was sold, which is 13% more than the same time last year and 46% less than last month. Year to date sales have already equated to $38K or 96% more than the same period last year.
Also of interest, the 38 land parcels currently under contract have a list price value of $15.6M. Next month should be similar to this month in terms of amount sold.
In terms of the lowest and highest prices for a land parcel sold, the lowest price parcel in July sold for around $80K. It was 20 acres of land with challenging access and no utilities. At the other end of the price range were 120 acres of land west of town with mountain views, meadows and forests. This sold for around $2M.
The bottom line about prices for land – no matter your budget, you can find options in your price range!
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 – July 2021!