I was lucky enough to catch Greg Hertz on the radio this morning. As you might know, he’s the Speaker of the Montana House of Representatives, and he’ll be calling that body to order in 77 days, on January 4.
One topic that came up were property tax assessments, which are now being done every two years instead of every six like they had been. Another issue is assessing property at the statewide level and not the county level.
The issue is the incredibly high housing prices, and buyers from all over the country that are buying houses sight-unseen, and typically $30,000 over the asking price, if not more.
Housing prices are going through the roof, meaning the taxable value of that house is also going up. So fixed income seniors? When their property is reassessed this year or next year, chances are good their tax bill will shoot through the roof.
Consider the simple site, taxrate.org, which lists a house in Montana worth $176,000 having a property tax bill of $1,465 per year.
Let’s double those numbers.
That gives us a house worth $352,000 and a property tax of $2,930.
For out-of-staters moving here in droves, those numbers are appealing. For lifelong residents - or even people that have been here for the past 20 or 30 years - those numbers are troubling.
But what can we do about it?
Supply and demand, and Montana has a serious shortage of housing supply right now.
This article in the Missoulian today was very depressing:
“Butts has sold homes for prices that range from $170,000 to $1.75 million. While most of the buyers that she’s worked with are coming from western states, she also saw people from just about everywhere in the country short of Hawaii.
Longtime Ravalli County appraiser and real estate agent Darwin Ernst said the country is experiencing a migration driven in part by people's experience during the COVID-19 lockdown that showed them their jobs could be done from home. Others have either retired early or been forced into retirement by the downturn in the national economy, and they want to leave wherever it is they are living now.
“The recent influx of people into Ravalli County is being driven by a migration of people moving away from places they want to get away from,” Ernst said. “And this is a place that has all the things they want, including a low crime rate, access to public lands, and open spaces.”
That migration is driving prices for homes and land upward and, in some cases, out of reach for current residents of the valley.
According to numbers Ernst recently compiled for the first three quarters of the year, the median sales price for a home in Ravalli County jumped from $309,000 at this time last year to $345,500.
The supply of homes on the market is even tighter. With an average of 68.6 homes selling per month through the first three quarters, the 134 properties currently on the market is enough to meet two months of demand.
“We’re in this situation right now that there is a scarcity of residential homes on the market,” he said. “There’s a super scarcity of affordable homes. People who are trying to find places to rent or buy something in the lower price ranges are having a hard time.”
Even when new subdivisions or apartment complexes are planned, many times they’re shot down...like we saw our city council do here in Missoula recently with a very large project.
The truth is, affordable housing isn’t important to the real movers and shakers in Missoula.
They have homes already, bought with the taxpayer-funded government jobs they have, or whatever nonprofit work they’ve managed to finagle.
What’s important to them are the pet projects, like the $10 million in bonding debt the county wants to strap you with so they can fix up the fairgrounds buildings that no one is allowed to use anymore.
Or the massive $3 million extra that our bus system wants so it can continue to give rides for free (that comes out to $81 a year if your home is worth $300,000...and which aren’t at this point?).
Meanwhile the city can’t even come and remove a fallen tree near my home from last week’s windstorm. But why should they? It’s only blocking some apartment parking spaces...not actual residents that pay property taxes.
My rent went up to $900 when I signed my new lease this summer. It had been $780 for the past couple of years.
Now it’s on-par with market rates, the landlord assured me.
If you have a place to live right now, you’re lucky. Good luck finding something else right now, especially a house. Most of the transplants will outbid you on those real quick, and many realtors are saying the minimal supply we still have will dry up within the next few months.
It takes time to build new homes, and that’s especially true for the larger apartment complexes that can house hundreds of people.
There is absolutely no plan to build anything affordable because right now the state and the local governments really need property tax money. The bigger the home, the more they get. The more the home sells for, the more they get.
There is no incentive to build small or build cheap. Governor Bullock could possibly use some of the remaining CARES act funding to do something with that, but it’s doubtful he’d be able to make any lasting, substantive changes without the legislature’s approval...and he’ll be gone by then.
Even if he could put some money forth to incentivise the construction of affordable housing - or any housing, for that matter - it’d be just a drop in the bucket.
I think this problem is too big and it’s been ignored too long and now we have too many people moving here.
No one knows how many have moved here since March, but it’s probably into the tens of thousands by this point.
Our state is going to change big time, as people with different values and different priorities move here, inexorably changing us into exactly what they’re trying to get away from.
Here’s an observation someone sent me today:
“I drive around town a lot. I see the homeless people sleeping downtown. I see the homeless people walking from East to West Broadway. I also drive up Rattlesnake to the nice areas. I see TONS of Democrat signs. One lady even made a 8’ x 12’ sign to explain to her neighbors why Senate voting is more important in Montana than California. That house did not have MT plates on their cars.”
Signs everywhere, mostly in the rich neighborhoods near the U or up on the hill.
There’s one house near me on a busy street with a huge homemade ‘sheet’ sign on the fence saying “Truth Matters.” A bunch of Democrat yard signs are around it. A couple blocks down the road is the fence that had the Trump yard signs on it before they were torn down, torn up, and thrown on the ground.
All I can tell you is be patient, bide your time, save up your money, and get ready for whatever may come.
Pay your rent or mortgage, get rid of that debt. Things could get extremely bumpy at any time. The market could crash at any time. Your pensi0n could lower substationally...and what could you possibly do about it?
You don’t want to be in a situation where you don’t have the money to pay your rent or mortgage or property tax and you’re looking at eviction so some one from somewhere else can move in, paid-in-cash.
While hundreds of thousands of people are moving around the country right now, buying up whatever they can...millions more can’t afford to pay all their bills. Why do you think the foodbank lines are so long?
Be safe out there and be prepared.