If you are planning to move to Missoula, MT to go to the University of Montana, for a new job, for the great public and private schools, or for the breathtaking scenery and wildlife, then you won’t be disappointed. However, you do need to understand the real estate market here in the Garden City.
Compared to the rental prices in most other areas in the state of Montana rental prices in Missoula for apartments and houses are more expensive. However, compared to the cost of a rental property in a major U.S. city, the prices of Missoula rentals are extremely affordable. In the past few years many apartment developments have sprouted up in prime areas of the city that offer reasonable rents for 1, 2, and 3 bedroom apartments. Rents for apartments range from $350 – $650 + utilities depending on the number of rooms and bathrooms, and the rental’s location.
Basement apartments are another popular option, especially in the University District. Here you can find a 1 or 2 bedroom basement apartment for around $450-$50 per month plus utilities.
House rentals are going to vary in price and will generally be more expensive than an apartment rental. On average, a 2 bedroom house runs between $550 and $750 per month + utilities + yard work, and a 3 bedroom house will run you between $750 and $2000 + utilities + yard work. Again location will determine the rental price, as will the amount of land the house is on.
If you have pets finding a rental in the city may be difficult, however, rural and suburban areas of the Missoula valley often allow pets (even horses) with an extra deposit and/or an additional per month charge. Again these points are negotiable with the landlord, and you may be able to convince a landlord to allow a well-behaved pet.
Cautions For Renters
One problem that Missoula rentals have is illegal rental conversions. Some homeowners have converted basements or garages into rental units with out complying with city housing codes. Before renting any property you will want to check it out to make sure the windows open, the unit is secure and safe, and the plumbing and electrical systems seem to work properly.
The Real Estate Market
If you plan on buying your home in Missoula you will have a wide variety of architectural styles, sizes, and locations to choose from. In the past ten years home values have just about doubled, and this coupled with low interest rates has encouraged many homeowners to put their houses up for sale. For example in 1995 the average sale price for a 3 bedroom, 2 bath house was $19,487, and today that price has increased to about $215,000. This trend makes buying a house in this area a good investment. The number of homes sold each year has also increased from 921 homes in 1995 to 1235 homes in 2004, and this growth in demand for housing doesn’t seem to be slowing as Missoula’s population continues to grow. In the last decade alone, Missoula’s population has grown from 65,000 people to 75,000 people. This trend also suggests that buying a home in Missoula is a good investment, and with a steady increase in population each year, you will find it easy to sell your home when you are ready to move to a larger property or cash in on your investment. (Remember profits up to $500,000 for married couple, $250,000 for an individual made on the sale of a primary residence that has been occupied as such for at least five years is not taxable!) While the demand is for a quality home is still high, the real estate market is beginning to slow slightly. This is most likely due to the increase in the number of affordable apartment complexes being built. This is actually a great thing for buyers as it turns the real estate market back into a buyers market making it the perfect time to purchase a home.
Cautions For Home Buyers
#1: Missoula started out as a small city with rural hub developments. Homes in these hubs often had their own wells and septic systems. Now because of the population expansion within the city, the city is expanding its sewer and water service to many of these surrounding neighborhoods that were once self-servicing. The recent expansion of city sewer and water has prompted many homeowners to sell their houses instead of paying the $10,000 – $15,000 fee to get connected to city services. The areas that this fee will apply to are currently Mullen Road to El Mar Estates, East Missoula, and Orchard Homes areas. If you are buying a house in any of the outlying area of the city or valley, you will want to make sure that this fee is either included in the purchase price, or that the connection fee is not applicable to the piece of property that you are interested in.
#2: Missoula is a seismically active city, and while the earthquakes that occur here are generally undetectable by residents, homes built along the South Hills fault line experience foundation cracks and land slippage. If you are looking for a home in the South Hills area look for properties that are either above the fault or well below it to reduce the chances of future property damage. If the realtor that you are working with is not familiar with the fault slippage problem you can quickly check out the stability of the home by looking for cracks in the ceiling, walls, joints, and around the foundation near the ground. Also you should look for patch jobs in these areas as they may be signs of a settling or slippage problem.
#3: Zoning is another issue that you will want to consider. If you plan on using your home as a rental or as a home business you will want to make sure that the house is zoned for those purposes. Some suburban developments have restrictions on who can rent out their properties. One example is in El Mar Estates which is located on Mullan Road on the west side of the valley. Here the rental restrictions state that a homeowner can only rent their property if they own and occupy another property that is adjacent to the rental property.
#4: Flooding is another issue that you will want to investigate before buying a property. With several rivers running through the valley, many homes have river frontage, or streams that meander through their property. Even if the property is not located on the bank of one of Missoula’s rivers, it may have been built on a flood plain. Ask the realtor for the flood history of the area and specifically for the property. You will also want to ask about the 100-year flood plane zone to make sure you are well out of the path of flood danger. If you fall in love with a property that has had past flood damage or issues, you will need to get flood insurance (which is separate from homeowner’s insurance) before most financial institutions will finance your home purchase.
Utilities in Missoula are affordable and will generally require a deposit to start services. Electricity and gas prices have been increasing over the past five years, but there are assistance programs available for low-income families and for senior citizens. Also there are grants available for installing energy efficient natural gas furnaces. For more information on these programs you should contact you local utilities office.
Cable television and satellite services are also available in Missoula. Your choice of providers will greatly depend on your location and the programming that you want. Some rural areas of Missoula County don’t have cable TV available, so satellite TV may be your only option.
The main provider for telephone service in Missoula is Qwest, however, other smaller providers like Blackfoot Communications and Verizon also offer options like residential service, Internet, and cell phone service.
Home Financing Options
Financing your dream home can be very stressful. Luckily there are many options available. Because of Missoula’s rural and home town atmosphere there are many landowners and home owners who are willing to carry a contract for part or all of the purchase price. Others sellers may offer you a lease/option deal. Here part of your rent can be applied towards your down payment if you decide to exercise the option to buy the property at the end of your lease. If you are self-employed or need time to establish your credit in Missoula there is a company, The National Homebuyers Association, that will buy a home for you and rent it to you for one year. At the end of that year you can either move out, or buy it. If you decide to buy it, 50% of your monthly rent will be applied towards the purchase price. To qualify for this program you have to pay a commitment fee equal to 3% of the house’s purchase price, be able to afford a monthly rent of 1% of the purchase price, and have a credit score of 540 or higher.
There are many financial institutions and private financiers that are also willing to work with you to help get you into your dream home, even if you have a credit score that is less than perfect. Your realtor can direct you to the best lender for your situation.
For more information on available homes, rentals, or financing options, access a Montana realtor’s website. They will be happy to answer your questions and send you relocation information.