HELENA - The values of most Montana homes grew from 2003 to 2008, although the number of sales peaked in 2005 and 2006, a Billings economist told a legislative committee Friday.
Scott Rickard, director of the Center for Applied Economic Research at Montana State University Billings, made a presentation to a joint House-Senate panel that is examining Montana's latest property reappraisal.
The state Revenue Department hired Rickard to analyze its property tax database of residential real estate transactions from 2003 to 2008.
Rickard concluded that the number of homes sold in Montana grew through 2006 but has declined since.
"After adjusting for the differences in the types of homes which sold in each year, the average value of Montana homes sold grew in each year by a statistically significant amount," he said in a report he distributed.
Assuming that sellers aren't forced to reduce the selling price they will accept, Rickard estimated that about 8,300 homes that will be sold statewide in 2008. That's 30 percent less than were sold in 2007 and more than 50 percent down from 2006.
He said year-to-year price changes in individual counties weren't large enough to show a statistically significant change. Six or seven counties, depending on the method he used, saw significantly higher prices in 2008 than in 2007, Rickard said.
"In a few cases, county-level prices may have peaked in 2006 or 2007 relative to 2008," he said. "In the case of Flathead County, prices most probably peaked in 2007."
Rickard said location was an important factor.
"The same house sold in Madison, Lake, Gallatin, Flathead, Missoula, Ravalli or Park County would bring 60 percent or more if this house were sold in counties such as Deer Lodge or Silver Bow," he said. "Conversely, the same house sold in counties such as Wibaux or Daniels would bring 60 percent less than it would if sold in Silver Bow County."
Two-thirds of the homes sold from 2003 to 2008 were in Yellowstone, Flathead, Missoula, Gallatin, Cascade or Lewis and Clark counties, Rickard said.
In Gallatin County, home prices dropped significantly in 2007 compared with 2006, he said.
He has not yet completed his analysis for 2008, but based on the information he has so far, only Flathead County had prices significantly lower than 2007 averages.
In 2008, Rickard said the annual growth rate in values of Montana homes was 2 to 3 percent.
State Revenue Director Dan Bucks said Rickard's research independently confirmed the accuracy of the agency's latest reappraisal data.
"I think the fact that in all the years we saw positive trends around the state except for two years for one county each year," Bucks said. "That's indicative that we've got a pretty good fix on the market."
Multiplying Montana's 56 counties by six years, Bucks said that leaves only two counties for one year each (Gallatin in 2007 and Flathead in 2008) out of a total of 336 where there were average drops in home prices.
The Revenue Department already had captured what happened for one year apiece in those two counties in its reappraisal data.