Residential construction continues at frenzied pace

Realtor demographics might be one of the best reflections of the state of home sales and residential development in the Flathead Valley.

After the Northwest Montana Association of Realtors saw its Realtor membership dip to about 400 in the wake of the recession, the organization’s current rolls are around 920 Realtors and 65 affiliates — the bankers, lenders, carpet cleaners, home inspectors and others connected to the housing world. Affiliate membership stood at about 15 businesses at its low point, according to Erika Wirtala, public affairs director for the association.

“I can’t think of another profession like this,” Wirtala said. “When the market’s good, everyone wants to be a Realtor. At the crest of the roller coaster around 2008, we might have been at 1,200.”

Wirtala said Realtors have their hands full in the current market environment. Competition among buyers can create stress, she said, especially when dealing with homes at the lower end of the price spectrum.

“Any time anyone has something under $300,000, that’s the one everyone wants to see,” she said. “You’ll get multiple offers, offers above asking price, cash offers. Realtors have had to get skilled in dealing with multiple offers, and there are protocols you have to follow when things get fast and furious.”

Wirtala said the Canadian market and the proliferation of second homes have given the Flathead market “a buoyancy of its own” during difficult economic times.

“What we were seeing in the Flathead was that the recession hit, and the Flathead stayed alive longer than other parts of Montana,” she said. “Then it dove pretty hard and we were one of the last to come out. It was a little bit of a delay in getting back up and running.”

Those who enter the real estate business stand to benefit from increasing local housing prices. The average price of a residential unit sold in Kalispell in November 2017 was $250,000 and at the same time in 2018, that figure stood at $274,450.

Whitefish has also recorded a jump, with the average home selling for $347,000 in 2017 and $385,500 in 2018. Columbia Falls averages dropped slightly, from $285,000 in 2017 to $280,000 in 2018.

Lakeside saw the most dramatic rise in housing prices in the two-year period. By November 2017 year-to-date, 49 houses closed at an average price of $290,000. But by November of this year, the same number of transactions came in at an average of $384,000, an almost 25 percent increase.

The median price of all homes sold through in 2018 in the Northwest Montana Association of Realtors area, which includes Flathead, Lake, Lincoln and Sanders counties, was $292,500 through November.

To counteract increasing prices, developers and builders have been heeding the call for affordable homes and rental properties. A number of projects to address the need for lower-cost housing in the Flathead Valley were recently completed, underway or on the dockets.

After the years 2013-14, in which no multifamily units and only a few townhomes were built in Kalispell, the combination of townhomes and multifamily unit construction jumped to 108 units in 2015 and 110 in 2016. Things slowed down a bit in 2017, with 72 units total. Some Kalispell activity includes The Ashley Creek Apartments on Airport Road, in the final stages of construction, and the KNTC Apartments off Rose Crossing, approved by the Kalispell City Council in 2018.

Kalispell City Planning Director Tom Jentz said he’s seeing a pattern of proposals for big multi-unit projects that don’t make it to the building phase.

“The dilemma, they tell us, is that the average rent does not cover the cost of construction,” Jentz said. “With average rent of about $1 a square foot, developers are telling us it costs more than that to build.”

He said there are roughly 1,000 units currently in various forms of approval, but few of those have reached the next phase in the development cycle.

Columbia Falls is substantially increasing its rental market offerings with The Highline, a $5.5 million project featuring six buildings and 216 rental units. Construction has started on the first two units on the east edge of town.

Whitefish is aiming to alleviate its shortage of rental properties through the approval and construction of a number of projects. The city recently received $6.75 million in federal tax credits from the Montana Board of housing for an affordable housing complex on Edgewood Place. Construction on that 38-unit project is expected to begin in June.

Whitefish Crossing, with 60 units on the south edge of Whitefish, was completed in 2017. Whitefish Planning Director David Taylor said it was filled within a month or two. He also said a 247-unit project on the former North Valley Hospital site should be considered by Whitefish City Council in January.

Alta Views, a 137-unit subdivision is being developed off JP Road just south of the Don K Whitefish car dealership, is getting a lot of buzz because with prices starting at $289,000, it is offering much-needed workforce housing. And groundwork began in late fall on a 58-lot subdivision planned on the eastern edge of Whitefish, near the intersection of Monegan and Voerman roads, that aims to provide an entire community of affordable housing using a cluster-development strategy.

“Lots of single-family homes are being built in different price ranges,” Taylor said. “It’s still a strong market right now, seeing more multifamily. It’s difficult to find places to rent.”

Flathead County Planning Director Mark Mussman said he has reviewed conditional-use permits for multi-family buildings in Bigfork and in Evergreen. One of those is a subdivision of fourplexes located near the intersection of Montana 35 and 83.

Developments featuring both single-family homes and townhouses are cropping up in Kalispell, such as Bloomstone west of Kidsports, with 540 planned total units in the mix of apartments and single-family homes. On Three Mile Drive, a single-family and townhouse development is in phase one, with building of 60 single-family houses expected this spring. Jentz said some projects, such as Silverbrook north of Kalispell off of U.S. 93, stalled for many years after the recession but came back to life recently.

Dawn Marquardt of Marquardt Surveying is among the many affected by the building busts and booms of the last decade. With 48 years of surveying on her resume, Marquardt said activity has picked up dramatically in recent years.

“From 2010 and 2011 to 2015 or so, it was very slow,” Marquardt said. “Then it’s picked up and it seems like we’re almost still picking up. It’s not at the frenzy we were in 2007 or so, but it’s pretty busy.’

The few years before the 2008 recession affected the Flathead, Marquardt said things were “crazy.” Buried with work, she decided she would no longer take on subdivision projects.

“Then it dropped off very quickly,” she said. “It was very much of a struggle for a while.”

Her workload picked up bit by bit, she said, and now she is offered more projects than she can handle.

“I turn subdivisions away all the time, and in the summer, we were out six to eight weeks before we could get to a project,” she said.

The building of single-family housing in Kalispell has not returned to the pace of 2006, when 170 single-family units were built. The recent trend in the increase of home building did continue in 2017, with 115 houses constructed after 104 in 2016. (The 2018 figures are not yet available.)

Whitefish’s numbers for single-family construction were consistent in 2018, with 63 home permits issued. Whitefish has been adding single-family homes in roughly the same amount since 2013, when 75 new homes were built. The low point in the last decade was 2009, with just 14 homes constructed.

Columbia Falls added 20 new homes in 2018. City Manager Susan Nicosia said she’s seen interest in development on the east side of the Flathead River.

Zoning changes in the county are leading to substantial residential development in the Bigfork area, Mussman said. Smaller-lot projects are planned north of Bigfork, and preliminary approval has been given to a 106-lot project on 35 acres off of River Road in Evergreen. A 100-lot proposal is pending for the Somers area also.

“Where developers can access municipal sewer systems — like Evergreen, Bigfork and Lakeside-Somers —we can anticipate seeing smaller lots and multi-family projects,” Mussman said.

Subdivision activity property throughout the county has grown dramatically since 2012, a year in which eight subdivision lots were recorded. In 2016, 132 subdivision lots were finalized, and in 2017, that figure was at 278. The year 2018 has slowed for county subdivision development, with 111 lots recorded.

But 24 zone changes in 2018 creates real potential for future development, Mussman said.

“I think one of the most telling applications for future development, big or small, is number of zone changes,” he said.

Reporter Heidi Gaiser may be reached at 758-4439 or hgaiser@dailyinterlake.com.