Prices are dropping on luxury and vacation homes, and there are some downright bargains.
“Properties we would have seen two years ago selling at an inflated price are down, in some cases 20 percent and
Lake homes, fishing cabins, ski condos - all are selling at early 2000 prices.
For careful shoppers, the present-day market means there is a lot to choose from, and a rare opportunity to get a lot of bang for your buck, Matelich said.
For example, here are some of the “best value” buys in the region:
A $1.1 million Georgetown Lake property with an enormous swath of lakefront is listed at $599,000.
A 2,200-square-foot four-bedroom home on 3.5 acres on the Bitterroot River, once listed at more than $1 million, is now listed at $650,000.
A modern three-bedroom Flathead Lake home with 100 feet of shoreline, a new deck, gravel beach and grassy lawn is currently listed at $895,000, down from its previous listing of $1.2 million.
And a ski-in, ski-out 1,000-square-foot high-end condo on Big Mountain that once sold for more than $700,000 now has an asking price of $400,000.
The trend isn't solely the result of a listing national economy. Western Montana's markets have finally found an equilibrium after prices soared in 2006, said Tom Burk, president and CEO of the nine Wachholz Group offices of Coldwell Banker Real Estate in Whitefish.
In the world of Whitefish ski condos, Burk is seeing prices drop anywhere from 30 percent to 50 percent.
Why the fire sale?
A couple of reasons, Burk explained.
“During the peak boom in 2006, some of the properties had asking prices of prime real estate, but they weren't great homes and were in marginal locations. And when the market tightened up, those marginal properties were the ones that took the biggest hit because of their unrealistic pricing,” Burk said.
Much of the luxury “inventory” - ski condos and lake homes - are resales, originally owned by developers who paid for properties at the top of the inflated market and are now ready to cash out, even if it means a loss.
“Basically, resales are not supporting what developers paid for initially,” Burk said. “Those developers didn't look at the whole macro-environment, and if you don't look at the big picture of the market you are dealing in, you can make some pretty good mistakes.”
With 3 million Canadians living within four hours of Whitefish, most of Burk's clients come from north of the U.S. border.
Despite slow sales in and around Missoula, in the last 60 days, Burk's Whitefish company has closed on $30 million in real estate transactions.
“We are busy up here,” Burk said. “Real estate is local and things change, but we are seeing motivated sellers who want to cash out of the market and get back into the market as a buyer, and we are seeing buyers who are motivated by these sellers.”
Closer to Missoula, the market is unsettlingly quiet in some pockets, said Scott Hollinger, a Bigfork real estate agent who specializes in lakefront properties.
There are currently more than 140 listings on Flathead Lake, a record high in recent times.
“That's a lot,” Hollinger said. “That's like double of what is normally available, and what it means is we have twice as much inventory selling at half the pace from two and three years ago.”
“The average price of homes on Flathead Lake is $2.2 million,” he said. “But it's difficult to say where the market is right now because there have been so few transactions.”
In contrast, lakefront property on some of the smaller regional lakes, such as Swan and Blaine, is slow but steady.
For anyone looking to invest in real estate, now is the time.
“There are some really nice homes out there at really good prices,” Hollinger said.
One of the best values on the market is a brand new 3,000-square-foot home with a separate guest house and garage with a recreation room on Flathead Lake. The property has 300 feet of shoreline; two years ago, it was a $3.5 million property. Today it's on the market for $2.7 million.
The situation is similar to what Burk described in Whitefish. Hollinger said many of the homes on the market were built by developers on speculation when prices were inflated, and they now need to unload the properties in order move on to other projects.
While it's easy to assume Flathead Lake buyers fall into the “mega-wealthy” category, the assumption would be off target, Hollinger said.
Who's looking? Who's buying?
“Montanans - even locals - and out-of-staters,” Hollinger said. “It's a mixed bag, there isn't any one type of buyer.
“The demographic has switched quite a bit since the Internet came into use and we are seeing younger people who are buying, people in their 40s and 50s.”
“The ones who have inherited are a small portion of buyers,” he said. “I would say a good majority are people who have been working and have done well in their chosen careers, and a lake home is the fulfillment of a dream.”
Despite the rise and fall of the economy, lake homes have a lasting value, Hollinger said, and people understand that.
“If you are going to make an investment, this is one that doesn't really lose its value and it's an investment you can play with until the day you sell it,” Hollinger said. “I don't know anyone who has ever regretted buying a lake home.
“From an investment perspective, waterfront has always been a blue chip property.”
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hohumgirl wrote on Nov 9, 2008 11:36 AM:
" Humm...even at a 20-30 percent less that still doesn't bring them back down to normal prices. Reminds me of one of those "Warehouse Closeout" sales where they mark everything up 200 percent then write it down 20 and call it a bargin....let the buyer beware, personaly, I'd wait a year or two for the real bargins to begin. "
Fubar wrote on Nov 9, 2008 7:24 PM:
" Frankly the article is sort of out of whack. If the average family salary for Montanans is $42,000. the price of these is way out of the average person's salary. These structures had to drop. Most of those people were betting on the come that their investments would bring returns of the past. Remember the gravity of economics, what goes up will eventually fall back down. Greed and gotta have it now attitude....gotta love it! "
NIc Lundborg wrote on Nov 9, 2008 9:32 AM: