I've got to admit

[Bleedinbluengold]

even with the 4% growth I don't know where these crazy prices are coming from. You don't make much money in MT as a whole to justify the prices for real estate. I laugh to think that if I divorced my husband (we ran the numbers once and it was over 3700/mth) my amount of support every year would be more than the "average" MT income, certainly wouldn't be great to support a family of three on, but think about it. that's just wrong. How are these people buying homes 300K and up like we have in WA? WA has the job market to sustain housing prices over 300K , Montana doesn't. In fact in today's homes and land magazine the development about a half mile from mine is pre selling 1800 sf homes for 265K that's without upgrades. i think brint said that's what they're running there in Missoula. I know from experience 1750 sf on 1/3 acre in Bozeman was going to be 250K. that's just nuts when people earn less than 30K a year

Like ReMax said, the economies of Billings, Bozeman, Missoula and Kalispell are doing very well. There has been a snowball effect in these towns. For example in Missoula: Out-of-state money buys U-district home for $250,000, levels it, and builds a $750,000 home. Former owner takes anywhere from $100,000 - $200,000 in equity on the sale, buys a new $350,000 place and pretty much has the same mortgage, OR moves to Lolo and builds a 3000 sq ft home on an acre and pretty much has the same mortgage, lower taxes, and utilities. Perhaps they sell the Lolo home, in a year or two, to another Montana family who just had the same U-district experience. Now there are 2 entities with anywhere from $100,000 to $200,000 in equity to roll over into another home, land, both, and/or other investments. This whole process has been going on for almost 20 years in Missoula. Thus, there are now a lot of people who have a substantial net worth and make a decent living in Missoula. These people don't need a $150,000/yr from their job to afford a $300,000 home. Of course, this is not the scenario for recent graduates.

[BWahlberg]

Actaully Bleeding look at my situation;

Sept 2001 - Married couple buys a $120,000 house on a household income of less than 40k/year, we use FHA, finance our closing costs, down payment is around $4,000.

Dec 2004 - Sell that house at $167,500, write a buy-sell (offer was acutally written in 2003) on another new home at $164,500. The house is a screaming deal, the problem is it will take 12 months to complete (long wait before the construction even starts).

Also in '04 my wife goes back to school, leaving a good paying job as the office administrator of Washington Mutual Home loans here in Missoula. Our total household income had increased since 2001, but with her back in school its been almost cut in half.

April 2005 - We're in our new home, since we wrote our buy-sell 1 year ealier, it's price was based on the year before's market. On a refi 2 months later is appraises for $201,500. Today's market, it's worth $215,000.

Now were looking to go to a 3 bed 2 bath house with higher quality finish work and an unfinished basement. Price is near $215,000. Once the basement is finished the house will be 4 bed, 3.5 bath, and probably worth near $240,000.

I tell this to a lot of my clients that are my age who don't think they can afford a house in this area, you just have to play the game right! My wife and I have done this mainly on an average income with car payments, credit card payments, a new baby, blah blah blah.

[briannell]

i guess we were chicken when we landed 5.2% fixed this last May. Our house reappraised for 40K more than we paid about a month ago. We actually opted for less than what the bank said we could afford due to our chicked status. we feel comfortable with our payment now and we don't feel like we are in a noose financially. Those new loan combo's can easily cause a young couple to over extend themselves. here we have many foreclosures due to that. rates are up and they can't refinance enough money to keep their house - or at least my neighbor is selling due to that. their financial status has changed, rates are up and now they can't afford to keep the house.

i wonder if there is alot of that in Missoula. as for incomes I still think they are very low for the various professional positions. Brian wanted to prof in Bozeman, has his master's and PE in environmental engineering and they paid less at MSU and the local engineering firms than he gets in the Army. so no deal until he retires - than he'll blow things up for free at MSU

[BWahlberg]

There are forclosures in Missoula, but there always are. It's a considerably small market here, in the MLS I see only 20 - 30 forclosed houses each year. Considering at any given time there is 800 - 1200 active listings in the MLS, it's not something we see very much.

[bobcatgrad2005]

What's really nuts is the real estate market in Couer D'Alene, ID. right now. Property along the lake is a feeding frenzy. People who paid only $1,200 per foot of frontage in 1990 were selling for $3,800 last summer. That's pretty nuts for a shack without sewer and off of lake water!

But I agree, real estate is a total game, and some people are good at it. I think the biggest growth sectors will be in mid-range houses, as recent MSU and UM grads look to stay in beautiful Montana.

By the way, I have to admidt this is a great forum!!!