In an industry often characterized by market swings, Helena’s real estate sector appears to be an anomaly.
The same might be said for Helena’s economy.
“Our housing market tends to reflect our economy overall,” said Mark Simonich, executive director of the Helena Association of Realtors. “The price is creeping up a little bit, but it’s not going gangbusters.”
Helena’s real estate market area includes everything from Jefferson City to the hills north of town and from Canyon Ferry Reservoir to the Continental Divide.
Figures provided by Simonich show the number of single-family homes and townhomes sold within that area increased from 855 to 873 (2.1 percent) from 2013 to 2014, the last full year on the books. The average sales price of those homes increased from $223,080 to $229,860 (3 percent) during that same time period, the data show.
Both 2014 figures were at their highest point since 2008, which is as far back as Simonich’s records go. And while sales bottomed out at 591 in 2010, the average sales price didn’t dip below $200,000 during any of those years.
The figures also show that more than 1,000 homes in the area have hit the market each year since 2012, and that they were sold within four to five months on average.
Simonich said the number of listings and sales “tells me consumer confidence is coming back.”
“We always say that real estate is local, but it is influenced by what people are seeing and reading about the economy nationwide,” he added.
Aside from a dip that came with the Great Recession, longtime Re/Max of Helena Realtor Joe Mueller said, Helena’s real estate market has been gradually improving since the early 1990s.
“It’s always been pretty stable in Helena,” he said.
And he and Simonich agree that the government’s influence in Helena has a lot to do with that.
“We’re a government town,” Simonich said, noting the high number Helena-area residents who work for the public schools; Carroll College; the VA facilities at Fort Harrison; and the city, state and county government. “We don’t have as much private industry.”
Mueller said the stability of those jobs provided by the government, as well as other established employers such as Blue Cross and Blue Shield of Montana, “that keeps us out of the boom-and-bust cycle.”
The Helena market is also significantly affected by federal interest rates, Simonich said, which have remained “remarkably low for a long time.”
The Federal Reserve has kept the Federal Funds rate near zero for the past seven years. This is the rate at which banks and other institutions lend money to each other, which typically affects the rates they charge for mortgages and other services.
“The single strongest other influence is the interest rate,” Simonich said, adding that he expects those rates to start rising soon.
Mueller said homebuyers in the Helena area have traditionally bought only what they can afford, which has made for a busy market less than the $300,000 mark. However, some of the more expensive homes have also been selling recently as buyers anticipate an increase in interest rates.
People have long been interested in older homes around the Capitol and near the South Hills trail system on the upper east and west sides of Helena, Mueller said, but both new and old homes are selling well. Modern housing developments north and east of town have been particularly popular lately, he said.
“As long as the economy holds nationally, I think we’ll be fine,” he said. “We’ll probably continue to grow under 5 percent, but we’ll just click along.”