'If people can't sell somewhere else, they can't buy here'

After five years of increasing real estate sales, the Northwest Montana market took a slight dip in 2007. Sales pushed past the $1 billion mark in 2005 and 2006 and reached $926 million last year.

In spite of last year's downturn, 2007 sales still were almost twice as high as 2002. (See chart for complete figures.)

The national news bombards Americans with stories of foreclosures and a crashing real estate market. While that may be true in places such as Las Vegas, Phoenix, parts of California and Florida, the Flathead Valley hasn't been hit as hard.

"It was still a good market, but we didn't get the summer rush like we usually get," real estate agent Corey Salois said. "A lot of it had to do with the climate in other parts of the country. If people can't sell somewhere else, they can't buy here."

One of the reasons Northwest Montana has been less affected is the diverse economy and a large retirement sector. Tourism - especially from Canada - also is a big boost for the local economy.

The residential sector of the market showed the biggest downturn in Flathead and nearby counties. Residential real estate sales totaled $638.7 million in 2007, an 18-percent decline from a year earlier, according to the Northwest Montana Association of Realtors.

No figures were available for the first quarter of 2008.

Salois said that in January there was 49 months' worth of residential inventory up for sale.

"That's the highest I've ever seen it," she said. "The sales are equaling the listings, but the swing here hasn't been as violent as places like California."

Salois also said the national residential numbers are skewed because they include condominiums. If a 2,000-unit condominium fails in Florida, it can substantially impact the overall numbers.

"If you separate that from the single-family home sales, it's not so bad," she said.

The commercial market in the Flathead is still going strong, though. Salois said the commercial sector is up 10 percent.

"Commercial has held quite strong," Realtor Dale Crosby Newman said. "We haven't seen that fall off. The new commercial you'll probably see slow until the national economy improves. Locally, we've been catching up with the last five years of the boom."

The fact that the Flathead Valley still draws people to its way of life will help keep the building and real estate market going. The growth also will attract an ever-expanding commercial influence.

"Major corporations are investing huge money into the area," mortgage banker Jason Mann said. "They wouldn't be doing that if they didn't see the Flathead growing."

A large factor in the reduction of home sales has been due to changes in available mortgage options. New rules went into effect in August 2007 that made purchasing a home - especially for those with lower credit ratings - much more difficult.

Subprime loans also have been drastically reduced.

The days of people with mediocre or poor credit getting a loan with no money down are over for now.

Mann said that in spite of the market's struggles and the restricted loan products, there are still many opportunities for people to purchase homes.

"There are certain sectors of the market that you're still seeing an easy time purchasing a new home," Mann said. "For homes $250,000 and under, you can still get into that with little or no money down."

First-time homebuyers with good credit also have numerous options.

"Mortgage rates remain extremely low," Mann said. "There has not been a better time to purchase a home."

Realtors say that after a slow winter, activity is beginning to pick up.

"The number of transactions is off from a year ago, but there is still plenty of activity," Newman said. "I've worked in real estate since 1992, and this is the third cycle I've seen. We always come out and pop up a little higher than we were before."

Reporter Michael Richeson may be reached at 758-4459 or by e-mail at mricheson@dailyinterlake.com