Great Falls Area Chamber of Commerce

Great Falls Area Chamber of Commerce www.greatfallschamber.org 57 H O U S I N G 2023 Great Falls Housing Market Outlook What is the housing outlook for 2023? On a national level, according to Dr. Lawrence Yun, Chief Economist of the National Association of REALTORS®, from a report he gave at the NAR NXT 2022 convention in November 2022: "Amid the backdrop of high inflation, elevated mortgage rates and slowing sales activity, severely limited housing inventory will prevent large home price drops for most of the country next year. Home prices are on solid ground… so it's really about the industry and not ordinary consumers," Yun said. "The prospect of a home price collapse is minimal, but some markets will experience a price decline." It's hard to predict what the housing market will look like in Great Falls for 2023, however our community is currently booming with an increase of new businesses which brings the need for housing whether it's rental or for sale housing. A housing market demand study commissioned by the Great Falls Development Authority, NeighborWorks Great Falls and the Great Falls Association of REALTORS® was conducted by the Concord Group and released in March of 2022. The study identified a demand for approximately 450 new housing units per year in Cascade County over the next 10 years. Between supply and demand, there's a gap of about 900 rentals and about 2,200 for-sale units over the next decade. Within six months of the study being released, there are now about 1,000 rental units being built and/or are pending approval. That means within approximately 18 months new rental units of varying price levels will be available and we will have closed the gap indicated in the study. I predict the issue of affordability will remain a problem. New builds don't come without a price in order for the developer to break even or see a very small profit margin. Single family home subdivisions are in great need in Great Falls. We aren't the only community looking to resolve our inventory of affordable and work-force housing. Every major city in Montana needs more housing for the influx of people who moved to Montana in the last two years. In Great Falls, our housing stock is old and we desire to have new housing options. In 2022, the Governor created a housing task force who are charged with providing recommendations to make housing more affordable and attainable for Montanans. Recommendations may include items the legislature can consider and the governor can sign into law, items state agencies can administratively, as well as best practices local jurisdictions can enact. As for single family home sales in Great Falls, they have declined over the prior year by 27% and the percent of list price received has come down to normal amounts to 97% of asking price. That means that normal negotiations are taking place and the cash over asking has gone away for the most part. List prices have not dropped much because inventory levels are low. Days on market have increased by 82% which also means the cash buyers have fallen by the way side and normal financing is happening. All indications are there will not be a crash of the housing market in 2023 like there was 10 years ago but there will be a slow down of purchases and re-financing of homes as long as the interest rates remain high. The challenge of housing affordability is just one of the many issues the Great Falls Association of REALTORS®, the Montana Association of REALTORS® and the National Association of REALTORS® are focused on locally, across the state and the nation to continue the mission of protecting private property rights, defending consumers and promoting the value of homeownership because that's who we "R". Terry Thompson, CEO Great Falls Association of REALTORS® | 401 13th Ave S Great Falls, MT 59405 | www.gfar.realtor | 406-453-2752

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