Missoula’s apartment market waged a solid performance in the second quarter of 2020. What’s the upshot?
Limited New Apartments
In the first half of 2020, 82 units have delivered. An additional 90 are under construction. Missoula’s apartment market is on pace to see a 35% decrease in deliveries over 2019.
Vacancy Rate Stable
The second quarter of 2020 showed a vacancy rate of 4.19%. That’s a 0.56% jump when compared to the previous quarter. While there is no “right” vacancy rate, the national rate is around 7% and rates below 5% are low.
Rent is Increasing
Rents in Q2 2020 increased, on average, 3.2% over Q1 2020. Housing costs vary widely across Montana. The cost of a studio apartment in Missoula or Bozeman is very different than the same unit in one of Montana’s small towns.
Home Prices Up
Coming as no surprise to locals, the median home price is up 6.5% year over year. Housing availability and affordability are perennial concerns for Missoulians. Learn more about the obstacles for affordable housing here.
Job Growth Uncertain
Missoula’s unemployment claims peaked at 9,504 in April. In May, claims dropped 25%. While recovery is underway, it is uncertain how quickly it will progress. On one hand, some surveys ranked Montana as “least affected” by COVID-related unemployment claims. But on the other, summertime tourism is a primary economic driver for the state. Some job impacts may not be understood until the peak visitor season progresses.
The full apartment investor report is available via download or by contacting the Sterling brokers Matt Mellott, CCIM, Claire Matten, CCIM or Nick Chaussee.