by Travis Mateer
The title of this post is a question because I’m good with words, NOT numbers, and speaking as a wordsmith there’s something immediately suspicious to me about this recent headline: Data collection finds just 6% increase in Missoula’s out-of-state homebuyers in 2020.
I get EVEN MORE suspicious when I read the following preemptive excuse making to combat the alleged problem of “noise” surrounding our town’s ZOOMING to new heights of housing unaffordability:
While data surrounding migration can be tricky to collect, the Missoula Organization of Realtors recently aggregated figures from Missoula’s mortgage lenders and where their customers were coming from.
“We’ve always gone back to use Census data for migration data, but it has an 18 month lag around it,” said Jim Bachand, CEO of the Missoula Organization of Realtors. “We felt like there was so much noise about being a Zoom city, we needed better data quality around it.”
Is it really that we need BETTER data, or is it that we need FASTER data from a smaller sample size that can provide some better optics for those aiding and abetting Missoula’s rapid transformation?
Here’s more from the link:
The figures, presented in this year’s housing report, found that one lender was behind nearly 15% of all home purchases in 2019 and 16% in 2020.
The lender originated 224 home purchases in 2019 with 12.9% of them, or 29 sales, made to out-of-state buyers. The figure ticked up during the pandemic when the same lender originated 272 home purchases with 18.7% of them, or 51 sales, made to out-of-state buyers.
“This is enough statistically valid data to give it direction,” said Bachand. “When we were done with this data on the migration side of it, we did a litmus test [within the industry] and they felt it was about right.”
The roughly 6% increase during the pandemic was regarded as an accurate figure by the industry in Missoula.
This is some mighty fine statistical alchemy we got going here, but I doubt it will be potent enough to alleviate the anxiety and frustration of who can afford to buy into this market and who can’t.
Those who CAN afford to get into a home in Missoula are sometimes Montanans returning to the state from making money elsewhere. I believe that is the story of Missoula City Council Veep, Gwen Jones, who moved back to Montana after working in California as a lawyer.
And because of that whole “zoom” thing, sometimes they’re bringing their jobs with them:
One of the region’s largest mortgage lenders reported a small increase in the number of home buyers arriving from outside Montana over the past year, though the increase dispels the myth that out-of-state newcomers are snatching up all of Missoula’s available homes.
Realtors in Missoula reported similar trends, citing a small increase in out-of-state buyers but nothing overwhelming. They suggested that many of those buyers were former Montanans returning home with a good-paying job.
I’m so glad Montana realtors are putting some effort into “dispelling myths” about who is moving to Missoula. As they sell paradise lot by lot at astronomically inflated prices I’m sure it helps to tout any amount of Montana provenance they can find to create some better optics around successful people like Gwen Jones who have returned home to give back to our humble little community.
Well, reporting the numbers the way they did, definitely dilutes the impact of the rise of obviously out-of-state purchasers. Another way to look at it is that their numbers of out of staters rose from 29 to 51, an increase of 22. So I would take 22/29=.758, or round up to .76, or 76%. I would report that the number of out-of-state purchasers for this one lender increased by 76%.
So if you were to extrapolate the year-over-year increase, next year it would be 51*.76 or 38 more new sales for 51+38=89, and in the year that it would be 89*.76=68 or 89+68 or 157 sales, or maybe close to half of all sales, depending on market growth. And this is just for one cherry-picked lender. How does that compare to other lenders? How many purchases were financed by out-of-state lenders? How many were cash sales. The trend here is what is important: a 76% yearly increase in out of state purchasers. If that trend holds, Missoula is fucked beyond all repair.
Last year I talked with a guy who ran a business doing maintenance and security on seasonal homes up around Flathead Lake. He mentioned that at the beginning of the panic last March and April they had a run on people coming back early, and bringing much more family — kids and their families, parents, related families, etc — and that most homes were overflowing (as were their limited septic systems). The local internet services were swamped, store shelves empty as stores hadn’t planned on this early and large of “seasonal” returns. The guy also mentioned the migrants were going to look for more housing to purchase for their families — Mom & Dad financing the homes for relatives. Second home buyers (and “seasonal” migrant families) buying a third home (or fourth?) for the extended family. Would those homes show up on local mortgage radar? Maybe not. Is a previously seasonal out-of-state resident now a permanent resident as they decided to not go back to where they came from for the winter? This last winter saw a huge proportion of seasonal transient second home owners stay in Montana. Where the realtors could now call then Montanans as they bought property for their extended family. An advance wave of immigrants coming to buy up relatively affordable property, work remotely (or live off their savings/trusts), and displace local residents by the thousands.
I also heard many stories of people losing their housing in Missoula or up north when their landlords decided to sell when offered a cash sale — meaning no time delay, appraisals or costly inspections, home improvements, etc.). These types of sales did not go through any of the normal realtor/financier channels. A private home owner could list the house on Craigslist, and sell it within days, cash, and have their private attorney run the sale through the local title company. And then evict their tenant with a 30 day notice.
These guys at MOR are just blowing a smokescreen to protect their little fifedom, selling Missoula to the highest bidder.
I live at Ronan. Tourist traffic started last April May 2020 here as it has been a nightmare driving across town of Polson. The number of people registering their vehicles with Montana plates is unreal. Their is a 3-4 hour line at the county treasurer office every day since last July. My daughter works at Justice Court for Lake County and the number of out side traffic tickets has doubled. Another daughter works for a landscape company that cares for homes on the lake and RV parks. Those folks that usually came for few days in summer have been here since Spring of 2020 and not left. Many times Harvest Foods or Super One grocery stores are sold out of many items in fact even local Walmart has had bare shelves. The local upscale RV park lots are up in price from $100,000 to $150,000 to $200,000. Of course those aren’t local folks putting up that cash. There is nothing to rent and shacks in the back lot are renting for $900. One local motel is provided free rooms in motel for their workers. A house on my block went on market 2 days ago for $250,000 which year ago might have brought $125,000. These are old homes not in best shape. My daughter from Court said many older people are being evicted from their rentals through court even though they have lived there for years so their out state owners can cash in.
Vacant tracts of land of 5-10 acres that were listed for years at $50,000 are now $100,000 and sell like hot cakes. I talked to a real estate appraiser who told me 80% of his work is loans for out state buyers. I have a neighbor two houses down that moved here from West Coast last April,he works for bank at home. The UPS or FedEx truck stops there twice or more daily. They have everything delivered from on line they buy nothing local. There were a couple older house across from Burgerville in Polson that has lake front. A out state couple purchased them tore the houses down and now have put up this 10 foot solid fence so you no longer see the lake from the road. I imagine they’ll build condos.
There is getting to be less access to lake all the time. We are well on the way to be Aspen or Boulder and the local government as no idea what to do but it is really to late. They did away with good zoning thinking they could keep it like 1950-60 but the horse has left the barn.