Well, we know from reports in Kalispell that over 3,100 people have moved into the area over the past six months, marking a 10% increase in their population.
Most are moving here from California. And even if you’re not from that state, around 65% of people moving here have never lived here before.
Yep, pure transplants.
At least with someone that grew up here, moved away, made money, and is now coming back...we can expect some level of Montana values based on how their parents raised them.
But with these transplants from California? All bets are off.
Boy, the realtors are sure making money though, aren’t they?
The average commission is 5-6%, so if a realtor closes on a $400,000 home, they’re walking away with a $20,000 commission. Not bad for...doing pretty much nothing. These days, you just have to put a few photos on a website and the out-of-staters will stampede all over themselves putting in one high bid after another.
Those realtors feel pretty high and mighty right now...but the joke will soon be on them.
If I had to bet, I’d say we’ll see 250,000 realtors lose their jobs in the coming six months.
Why is this?
Simple economics, supply and demand.
You see, there are currently 1.45 million members belonging to the National Association of Realtors (NAR), but there are just 1.05 million homes on the market...in all of the country. That means we have 400,000 more realtors than we have homes for sale.
While the NAR has seen their membership increase by 4.5% over the past year as more and more bored stay-at-home housewives decided to jump on the home-buying-frenzy bandwagon, the available housing stock in the country fell by a whopping amount.
Here in Missoula, rental vacancies are less than 1% for renters, and if you want to buy a home...good luck. Even out-of-staters are now running into problems.
I haven’t heard many of Jason Baker’s Rise Realty ads on the radio lately. For months, he was paying Sean Hannity top bucks to record ads for him.
I think those days are over. When you have nothing to sell, the payments stop coming in. I suspect Jason’s office - like most in the country - will begin to layoff their realtors.
And we’re not building our way out of this. Lumber prices are through the roof, and the reasons are simple - huge demand for building products, and decades of environmental wackos suing to keep us from logging.
What logging and mill work there is is substantially reduced from two or three decades ago, and that’s reflected in the building prices. Why do you think I told you of the mills in Seeley Lake earlier this week? They’re desperate for workers, more so than the Missoula bake shop.
I mean...$9 for a 2x4?
But that’s the reality of inflation. That’s the reality of basic economic theory, not the MMT that the Fed is engaged in, of firing up the presses and printing however much you want, whenever you want.
The real world doesn’t operate like that, and the real estate market makes that clear.
It’s often one of the main bellwethers of the economy, as we saw in 2007-8.
Most people today can’t be bothered to pay attention to that, however.