Kalispell Market Report: Land – May 2021
This report covers the residential land market (active listings and sales) in Kalispell Montana as of the end of May 2021. Similar to the housing market, land sales remain strong.
As of early June, there were 80 residential land parcels for sale in the Kalispell area which is just about flat from last month’s count of 78. That remains great news for buyers since there were only 60 listings a few months ago. Higher inventory levels equate to more choices for buyers..
Five or more acres
Of the land currently for sale, 55% of 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 $90K to $17M with an average price of ~$1.4M. The listing at the lowest end of the price spectrum is 20 acres of property in southwest Kalispell. The property has beautiful views but electric service is a mile away and access is challenging. The highest priced parcel includes 240 acres of land with 5000 feet of river frontage. While this is listed as land, it also includes multiple buildings and a shop.
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 $75,000 to $899,000 with an average price of ~$261K. 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 don’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. There 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 five 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 drops as you buy or sell more land.
Note: This information will be updated monthly to provide a running average for 2021 sales. Also, please note the 20-40 and 40-80 categories don’t totally follow the rule this month, but that could be due to the low number of sales in the 40-80 category (3) which could skew the results.
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. If you want to purchase land, in addition to knowing what you want to spend, you’ll need to know how you want to use it, what kind of amenities you might like, and what kinds of rules you could live with. That will help you and your real estate professional select the right locations and parcel sizes!
Land listings continue to sell at a strong rate in 2021. In May, 18 land parcels sold which was more than double last May but is 44% less than last month. That is not cause for worry as there are currently 28 land deals that are either pending or under contract which is about the same as last month. The healthy sales rate should continue in June.
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 May, 2021 is slightly faster with land taking 6.8 months (on average) to sell. During May, the fastest time from listing to sale was 19 days while the longest was two years and four 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.
As mentioned above, 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 May 2021, $4.4M of land was sold, which is more than four times the same time last year but half of last month. Year to date sales have already equated to $26M or 150% more than the same period last year.
Also of interest, the land parcels currently under contract have a list price value of $18M. Next month should remain higher than the same time last year.
In terms of the lowest and highest prices for a land parcel sold, the lowest price parcel in May sold for around $65K. It was .2 of an acre in a subdivision on the west side of town. At the other end of the price range were 46 acres of land with possible subdivision and river frontage. This sold for slightly less than $900K.
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 – May 2021!