Homesteader 2011 by Independent Publishing

Western Montana Chapter

National Association of Residential Property Managers Supporting professional and ethical practices of property management through networking, education, and certification.

MEMBERS: At Your Service Property Mgmt. Addie Brown-Testa Bitterroot Property Mgmt. Nina Sverdsten Caras Property Mgmt. Sam Caras Cardinal Properties, Inc. Barbara Liss Fidelity Mgmt. Services Geoffrey Bayliss Five Star Rentals & Property Mgmt. Jill Zignego Garden City Property Mgmt. Lisa Gohrick Richard Wilcomb Gatewest Mgmt. Mandy Muller Grizzly Property Mgmt. Jodi Corette Annie Kremin Dan Williams Shaun Maki Scott Chandler Highland Property Mgmt. Casey Overland homeWORD Jennifer Betz Indigo Real Estate Services Stacy Parker Martin's Property Mgmt. JoAnne Martin Victoria Martin

Peak Property Mgmt. Monica O'Brien Plum Property Mgmt. Jennifer S. Plum

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CHAPTER OFFICERS:

Jennifer Standish •Secretary

Prudential Missoula Properties Gloria Handel

Karli Friia •President

Sherrie Featherly •Website Chairperson

Tom Chapman •President-Elect

Lisa Gohrick •Education Chairperson

Michelle McLinden •Past President

Paul Heihn •Affiliate Board Member

Chira Gingerelli-Hegg •Treasurer

Lantha Rienhart •Board Member

Real Estate Mgmt. Group Michelle McLinden Bruno Friia Marsha Friia Karli Friia Brittni Friia Rocky Mountain Property Mgmt. Tara Harbin Summit Property Mgmt. Aaron Gingerelli Chira Gingerelli-Hegg Sabrina Halverson Swan Range Property Mgmt. Jerren Carles Wahlberg Property Mgmt. Courtney Wahlberg

Meticulous Mgmt. Devan Struppler

Honorary Members Casey Richardson Rob Scheben Jamie Merrifield

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AFFILIATES:

Professional Property Mgmt. Tom Chapman Robin Poire Louise Rock Amy Getz Dyana Finnegan Nicole Evangeline Jordan Stewart Paul Burow

Majestic Property Mgmt. Rich Marcus

Missoula Housing Authority Karl Pare Amelia Lyon

Missoula Property Mgmt. Sherrie Featherly Lantha Rienhart Kari Neumiller Kristy Virga Mary Hurd

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Mary Ann Randall RRP

• NARPM® promotes a high standard of business ethics, professionalism and fair housing practice. • NARPM® members know that education and communication raise the level of our profession, so that we may better represent our clients. • NARPM® is here to represent the interest of property managers. • NARPM® wants professionals like you! For membership information contact any NARPM® member.

For more information: w w w. n a r p m m t . c o m

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Table of Contents How the UM FLAT is redefining how we live . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Read this before you rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Local designers decorate the ultimate Missoula home . . . . . . . . . . . . . . . . . . . . 16 Why property owners should consider a property manager . . . . . . . . . . . . . . . . 26 Tips on growing the perfect Garden City garden . . . . . . . . . . . . . . . . . . . . . . . . 30 Is homeownership right for you? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 2011 Missoula Housing Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Cover design by Kou Moua

Mailing address: P.O. Box 8275 Missoula, MT 59807 Street address: 317 S. Orange St. Missoula, MT 59801 Photo by Chad Harder

Phone number: 406-543-6609 Fax number: 406-543-4367 E-mail address: independent@missoulanews.com

549-6106 • 422 Madison • Missoula • www.gcpm-mt.com 4

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Homesteader 2011

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A work-in-progress strawbale wall inside the FLAT’s demonstration space.

Extreme makeover The UM FLAT isn’t just the ultimate home redesign— it’s redefining how we live by Skylar Browning • photos courtesy of Derek Kanwischer

The University of Montana’s Forum for Living with Appropriate Technology—better known as simply the UM FLAT—can be described any number of ways. It’s a working classroom, a model of sustainable living, a community resource, a “Big Brother” type of social experiment, a wicked sweet—yet eco-conscious— college dorm, a way of life, one small part of a decades-long grand plan to change Missoula (and, what the hell, the world), or maybe something else, depending if you’re a college administrator, curious neighbor or someone in between. But perhaps the best way to describe the UM FLAT is to clearly state what it is assuredly not: just a house. 6

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The scope of the project comes into focus listening to UM FLAT founder and advisor Derek Kanwischer walk through the property located just off Fifth Street near the Madison Street Bridge. It’s a residence for current students, sure, but as Kanwischer points out details large and small of the main house, the permaculture garden, the chicken coop, and the garage that’s currently being converted to a demonstration space, he admittedly struggles to keep his narrative focused. Finally he just stops and points to a beam in the center of the garage. “It’s amazing because everything in here has a story,” he says. “I mean, just that post that’s holding up

Homesteader 2011

the attic—that one post came from the Stimson mill. It came here when Gary Delp from Heritage Timber brought it here. I remember that day and what a big deal it was. Everything in the house has a story like that—when members of the community came together with those at the house to try and build something important. There are stories like that in every corner.” ••• Kanwischer first got the idea for the UM FLAT after visiting the Campus Center for Appropriate Technology (CCAT) at Humboldt State University in California. CCAT started in 1978 as an entirely stu-

dent-run demonstration home aimed at improving sustainable living practices. At first, students retrofitted the old house to make its heating and cooling systems more effective. In 1991, with the addition of a solar energy system and windmill, CCAT was taken off the grid. It’s back on the grid now due to new construction on campus, but students continue to work at maximizing its efficiency—for instance, they planted a bamboo grove, which produced materials Full-scale windows allow for passive solar heat. used in one of CCAT’s many out-buildings. Kanwischer came graduate work in UM’s environmenaway from CCAT in awe. The tal studies program in 2007, he Humbodlt crew had a three-decade focused on replicating CCAT in head start, but he wondered why Missoula. something similar couldn’t be done “We had to convince the adminisin Montana. When he began his tration here that this thing could

work, and that it would be a huge influence not only to the college community, but the Missoula community as well,” he says. The sales pitch worked. The administration not only gave the UM

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The lotus-shaped permaculture garden helps provide food for the FLAT residents.

Tankless H2O Heaters Solar Hot Water Geothermal Heat Pumps 543-6465 • newerapandh.com

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FLAT the green light, but also secured a site adjacent to campus, pledged some funding, and approved plans to renovate the garage. Roughly two years after Kanwischer proposed the house as a research project, he moved in as the FLAT’s first resident in January 2009. “The value was clear to the department, and we received tremendous support from the administration,” says Len Broberg, program director for the environmental studies program and academic advisor for the FLAT. “They saw that it would provide a really exciting, attractive, hands-on laboratory for students to work with sustainability technology. They get to try it out and see what it means, and learn how to translate that and demonstrate it to a broader community.” While the initial success came quickly—getting the university to essentially approve and help finance a new dormitory and working classroom required more than a little logistical work—changes to the house were more incremental. In many ways,

Kanwischer and the other residents battled the same challenges that face any other homeowner—namely, money and time. It was hard for full-time students to set aside the hours needed to do the work, and making major renovations required dollars that didn’t exist. “The idea was to renovate the property, but we had to work within a budget,” he says. “And, of course, we didn’t have a budget.” ••• Little by little, the UM FLAT began to take shape. Eureka Pellet Mill and HiCountry Enviro-Heat donated a pellet stove to help control heating costs. A grant from Eat Right Montana helped pay for a new permaculture garden, which provides the students with fresh food. An environmental studies graduate installed The Energy Detective, a real-time energy monitoring system that helps residents track their energy use (www.theenergy detective.com; starting at $199). Architecture students from Montana State University also worked on drafting an eco-friendly

redesign of the entire UM FLAT site. The largest project, however, became the garage. In February 2009, the program raised $12,000 to help fund the renovation. The next month, carpentry students from the College of Technology began work on the space, including pouring a concrete slab and reconstructing the roof. That fall, volunteers installed full-scale windows for passive solar heat and double-stud walls for better insulation. Environmental studies stu-

dential buildings,” says Broberg. “That’s everything from the design process, to selecting what to do, to funding it, to gaining the permits, to lining up the resources— either donated or purchased, both materials and the people to do the work. It’s important having them move through that process to actual completion of various phases of the project.” The key, adds Broberg, is everything the UM FLAT’s accomplished thus far has been done on a scale that’s transferable to

The garden also includes chicken coops.

dents then built a strawbale wall as part of a class project. When they reshingled the garage, they used recycled siding. In fact, recycled products are found throughout the garage, whether it’s the sub-ceiling used in place of standard drywall or the reclaimed lumber from the Stimson mill. “I think one of the biggest successes has been working with students to have them understand the real work that goes into making changes to resi-

the average Missoula homeowner. In other words, it’s been relatively affordable and full of sweat equity. “What we want to do are things that are scaled to the Missoula community, that a number of people might see a possibility to use them,” says Broberg. “The strawbale wall shows that you can use it structurally in Missoula, and gives a practical idea. If they wanted to build an out-building with straw they could. If Homesteader 2011

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The Renter Center: •Helps students find housing

Looking for Housing? Looking to post your rental? www.umt.edu/housingfinder

•Educates students on renters’ rights & responsibilities •Helps resolve tenant/landlord disputes.

they wanted to build an addition to their home, they could use it. If they wanted to use it for superinsulation, they could. That’s the focus—work at a scale that’s practical for local residents. “In some ways,” he continues, “the most exciting things we’ve done are the things that are affordable and that make a difference pretty quickly. Everything from demonstrating a pellet stove to the passive solar system

immense efforts to get the home where it is today, there’s a grand vision of what it could be years down the line. In the immediate future, that means installing a 2.8 kilowatt solar array on the main house. The project has been years in the making, starting when the initial energy efficiency analysis discovered asbestos in the attic. With the help of a sizable donation from NorthWestern Energy and the electricians’ union,

All UM FLAT projects are documented and shared with the public through classes, demonstrations and tours.

with the windows shows what you can do.” Broberg admits he’s been personally influenced by what he’s seen at the UM FLAT. He already utilizes solar energy, but he hopes to super-insulate his home in the future. And, like many Missoulians, he added chickens. “All of this has made me make some different choices in my own living,” he says. “That’s the idea.” ••• The “to-do” list at the UM FLAT would make even most ambitious homeowners blush. Despite the 10

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Broberg says they’re “on the cusp” of solving the asbestos issue and some structural problems, and getting the solar array in place. But the UM FLAT’s future entails more than just brick and mortar changes. Everything done at the site is documented and recorded with the intention of passing along the information through demonstrations, tours and classes. With so many successful projects and lessons learned in just two years, both Broberg and Kanwischer say now is the time to spread the word.

“I think our next challenge really is to move beyond the university community and reach out more to the Missoula community,” says Broberg. “We need to share what we’re doing, invite folks in and to disseminate the approaches we’ve taken and make people aware that they are possible here in Missoula.” Kanwischer takes it one step further. Part of what appealed to him from the start was the idea that this Architecture students from Montana State University worked on drafting an eco-friendly redesign of the entire site. project wouldn’t just be about a house, but the entire driving habits. It’s the same thing with neighborhood, our neighbors.” community. Over time, he says the a house. When you, say, monitor the In the meantime, he takes great UM FLAT could be part of an entire energy that you use, you are suddenly satisfaction knowing the UM FLAT ecological village, one where an more aware of how you live. In that has provided students with a more entire block of student homes way, you build a relationship with your immediate reward: a reconnection shares everything from barbecues home. I think, from a foundation with where they live. to a geothermal heating system. standpoint, that’s something we all “It’s the Prius effect,” he says. “It goes beyond what happens “When you’re conscious of the energy need to get back to. And I think the within four walls,” he says. “We’re it takes to drive about, it changes your FLAT is a good start.” talking about our community, our

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Expert Essay:

Renting 101 From rights to resources, 28 things every tenant needs to know by Beki Hartman The Missoula rental market can be competitive. Half the local population—or some 30,000 people—rent their home, with 10,000 of those being students attending the University of Montana. On average, Missoula has a rental vacancy rate between 3 and 5 percent; the national average is 10 percent. In such a limited market, it’s important for renters to understand their rights, their responsibilities, and what it takes to enter into a positive lease agreement. Consider the following list a solid starting point to protecting you in your new Missoula home. 12

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Leases

Deposits

• Read it and keep a copy. • Do not rely on verbal agreements, they can be misunderstood or denied. • Before you sign, tell the landlord what you don’t agree with. Items can be crossed out and changed. • In order to end your lease, you must give 30 days notice, even if you are on a 12month lease. If you don’t do this, you may have to pay for an extra month at the end of your lease or suffer an automatic renewal.

•Pet deposits can only be withheld for pet damages. •If you move out of the rental and other lease holders stay, getting your pet deposit back can be difficult. •To help ensure you get your deposit back, take pictures of dirt or damage before you move in and then take pictures after. •Clean! Even for a small studio, it can take as many as four hours to clean. •The landlord can’t withhold a deposit for normal wear and tear.

Homesteader 2011

•The landlord can’t withhold a deposit for cyclical cleaning. For example, if the landlord paints the walls every year, you can’t be charged for the paint and labor. •Your landlord has 10 days to return your deposit if there are no deductions. If there are deductions, your landlord has 30 days to return the deposit.

Rent Payments •Always get a receipt! •Avoid paying in cash. If the landlord insists, offer a cashier check or get a receipt!

Roommates •If there is more than one person on the lease, you are individually responsible for the entire rent. The landlord doesn’t care if you pay $1 and your roommate pays the rest. He or she wants his money on time and in full. • Protect yourself by signing a roommate agreement, specifying the details on rent and utilities payments.

Pets

Privacy

•Think it over. It is already difficult to find a rental in Missoula, let alone one that accepts pets. •You must notify your landlord if you have a pet, and have it put on the lease. If you don’t, you could be kicked out in just three days.

•The landlord must give you at least 24 hours notice before entering your rental, unless it is an emergency. •The landlord must give you notice of repairs that will be performed at your rental. For example, if s/he is going to service the furnace or inspect the premises, s/he must give you fair warning.

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Repairs & Maintenance •The landlord is responsible for providing a safe rental. •The city of Missoula provides a low-cost residential inspection if you believe your rental is unsafe. •The landlord must provide a smoke detector, but it is the tenants’ responsibility to keep charged batteries.

vacate without having to provide a reason. •The landlord may give three days notice for the following: non-payment of rent, gang activity, unauthorized pets, an unauthorized roommate, destruction or removal of property on premises, potential to destroy property or if neighboring tenants may be injured.

Your landlord is selling

Additional resources

•Your written lease is valid, even if the property changes hands. •If the owner asks you to open your home for more than three viewings per month, it may be unreasonable. •You have a lease with the landlord, not the real estate agent. All communication should be done through the landlord.

•For additional information on rental rights, visit the OffCampus Renter Center (www.umt.edu/rentercenter), ASUM Legal Services (for students only; www.umt.edu/asum/ legalservices), or Montana Legal Services Association (www.mtlsa.org).

Evictions •If you are on a month-tomonth lease, your landlord can give you 30 days notice to 14

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Beki Hartmann is the director of the ASUM Off-Campus Renter Center. The information provided here is for educational use only and should not be used to replace legal advice.

Homesteader 2011

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The living room starts with a custom sofa by Archetype Designs.

Dream house A collection of Missoula designers decorate the ultimate Missoula home photos by Chad Harder The first thing anyone needs before they spruce up their home is a healthy dose of inspiration. Dozens of glossy magazines and cable television shows thrive on being the muse for a home makeover, but those outlets don’t often translate to Missoula’s distinctive style and budget. That’s why we decided to rustle up some ideas from those who know Missoula 16

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best: local store owners and designers who cater specifically to our community. The rules to the exercise were simple: Each business was handed one room in a fictitious house and asked to use their expertise to deck it out however they wanted. Because this is supposed to be the ultimate Missoula house, it’s not supposed to

Homesteader 2011

be a mansion. We could only “afford” to redo four rooms—a loft area available for both sleeping and day use, a kitchen, a bathroom and a main living room. We asked the designers to keep budget and environmentally friendly options in mind, and then set them loose. Their suggestions—and your potential inspiration—appear on the following pages.

I work with clients to reduce the impact construction has on the environmentâ&#x20AC;&#x201C;including a thoughtful construction processâ&#x20AC;&#x201C;to create a beautiful, energy efficient and long-lasting structure. I am an Energy Star Partner, a member of the Sustainable Business Council and a Certified Green Professional with the NAHB. My goal is to maximize the return on your investment while ensuring minimal environmental impact throughout construction, and over the life of your project. Together, we can achieve your construction dream: residential or commercial, large or small. Morgan Suter, CGP OWNER

406-529-5375 MORGANSUTER@HOTMAIL.com New Homes, Light Commercial, Remodels & Additions, Kitchens & Bathrooms, Small Projects

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Rice paper lanterns add light to the loft.

The Loft by Import Market Import Market envisions a loft area for multiple uses. By day, it’s a place to hang out, read a book, maybe meditate or practice yoga. Consider it an all-purpose “zen area.” By night, it’s a room to sleep in, with a quick and easy transition from the zen area. To start, the loft needs a full-sized futon. Usually in couch position, this dark brown frame, with a black walnut finish, has an Asian flair with the inverted curve of the armrest. A cream-colored futon mattress keeps the look simple. The mattress is foam and cotton filled, and the complete set runs $660. An Indian batik printed tapestry ($24.99) with blues, pinks and a touch of fuchsia would hang on the wall 18

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behind the futon. In the corner, to the right of the futon, we’d place a dark brown wicker corner shelf ($69.90) with five shelves. Decorate the shelves with something basic that helps set the mood of the room, like incense (Nag Champa Incense, $1.29 for a 10g box) and a burner ($2.59) for when you’re in meditation or yoga mode. A Buddha statue ($19.99) made of sandstone, or a meditation bowl, also called a “singing bowl” ($59.99), would also work well. The bowl sits in a cushion ($14.99) that adds to the look. On the other side of the futon sits a dark brown square basket with liner in blue and green ($12.99). This is where you can throw magazines or books, dog toys or whatever else. Above it, we’re hanging a rice paper lantern ($8.99) for extra light with a cord and socket set ($14.99).

Low-Income Multi-Family Housing continuing to take applications for 1, 2, 3 & 4 Bedroom Apartments for placement on waiting list.

Office Hours: Mon-Fri 9am-Noon or afternoon by appt TDD/TTY:711

406-542-2922 â&#x20AC;˘ 1904 S 3rd W, Missoula

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A mamasan chair is like a papasan chair, only smaller.

Opposite the futon would be a mamasan chair ($129.90) and footstool ($24.99). A mamasan chair is similar to a traditional papsan chair, just a touch smaller. The dark brown wicker and cream-colored cushions will complement the rest of the room. Finally, a 4-by-6 bamboo rug ($39.99) occupies the center of the room. With medium finished bamboo slats, and a 2-inch black cotton border, it completes the loft’s simple, clean look. Designed by: Kristal Cowart, Import Market, 201 West Broadway, 406-7282175.

Kitchen by Abode Sustainable Building Supply We often associate healthy decision-making in the kitchen with what food we’re putting in our mouth. However, with the amount of time spent in this room, it’s just as important to consider the quality and composition of the materials used in the “heart of the home.” 20

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Abode Sustainable Building Supply suggests starting from the groundup with a floor that’s all ground up—that is, cork flooring. Cork floors are manufactured from pulverized bits of sustainably harvested bark from the cork oak tree. Once compressed into easy-to-install flooring (either “floating” planks or glue-down tiles), cork’s natural warmth and cushioning properties make it easy on the joints. Cork floors have a sophisticated look to them and natural anti-bacterial properties. Prices start at $4 per square foot for varieties with a lowformaldehyde core, and $5 per square foot for formaldehyde-free versions (the healthiest choice). For a more colorful and creative flooring approach, there’s also Marmoleum. With many of the same great properties as cork, it’s an environmentally friendly alternative to vinyl flooring. The next step is cabinetry, which often takes a

Spice up a kitchen’s backsplash area with ceramic and glass tiles.

big bite out of the project budget. To cut costs here and go easy on the planet, consider repainting the existing boxes and revitalizing the look with new doors made from either Kirei Board or 3form’s Eco-Resin panels. Both materials have a huge visual impact and start at $12 and $17 per square foot, respectively. If starting from scratch is your desire, keep it green by choosing a local carpenter to build your cabinets from either reclaimed or sustainably harvested wood, and finish them with low-VOC products. Visit Abode to see examples from their preferred fabricators, many of whom are also skilled in working with PaperStone, a 100-percent post-consumer recycled paper countertop product. It’s durable, gorgeous, and the perfect solid-surface material choice to cap off your

new cabinets. One of the really fun elements of kitchen design is the backsplash area—

of colors and with some serious green street cred. Based in California, Fireclay Tile manufactures

Build the cabinets from either reclaimed or sustainably harvested wood.

think of it as a blank canvas for your creative muse. Abode carries ceramic and glass tiles in a wide range

their Debris series ceramic tiles from 70-percent locally sourced pre- and postconsumer materials, makHomesteader 2011

ing it the most sustainable ceramic tile in the world. With less of an earthy look and more of a bling factor, Sandhill’s 100-percent recycled glass tiles come in 36 colors, two finishes and 19 different sizes and shapes. In short, the creative possibilities are endless. Both varieties of tile start around $18 per square foot. Last but not least, the perfect shade of YOLO Colorhouse paint can tie together all the various materials and bring the room to completion. YOLO paints score high on performance, but are completely free of carcinogens, mutagens and reproductive toxins. At $43.99 per gallon, it’s an easy choice to finish off your healthy, high-style kitchen. Designed by: Kim Wishcamper, Abode Sustainable Building Supply, 215 E. Main Street, 406-541-6110 Missoula Independent

Bathroom vanities at HomeReSource cost just $30.

Bathroom by Home ReSource Green building is Home ReSource’s business, and it specializes in rare materials. Bathroom items are no exception. From low-flow toilets to high-class faucets, Home ReSource sells items so uncommon they could make your bathroom-goers green with envy. The most recent example is a custom-built bathroom vanity made from an antique oak and cast iron treadle sewing machine table, a white porcelain vessel sink, and a modern Dwell Magazine grade faucet. This gem of a sink has a gem-like price tag of $1,700. Rest assured, Home ReSource has plenty of more affordable options, be they bathroom vanities, shower enclosures or a matching three-piece sink, tub, and toilet combo in 22

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sea foam green. Perhaps the best example of saving money is a complete bathroom redesign accomplished on a small $100 budget. We would start with a $30 vanity (with standard white cast iron sink included), a mirrored medicine cabinet for $10, three towel bars for $2 each, a toilet paper dispenser for $1, and five hooks (for hanging all our bathrobes and shower caps) for $1 each. Of course, we’d also need a tub and a toilet, so we’d get them both for $20 each. That brings us up to $92. With our remaining $8 we would get a sturdy privacy latch for $2, and a small section of blue shag carpet for $6, because hey, the carpeted bathroom always keeps ’em guessing. All this still leaves us without lights, but we’re big fans of scented candles anyway, and if we ever

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House Design Studio recommends rooms decked out in shades of white and gray with punches of orange and blue.

wanted in the future to put in an electric light fixture we could find one for just $5 or $10. A bathroom built from Home ReSource items could become the best—or weirdest—bathroom the world has ever seen. Designed by: Lauren Varney, co-director, and Abe Coley, outreach coordinator, Home ReSource, 1515 Wyoming Street, Suite 100, 406-541-8300.

known Finnish design company, we aspire to “lasting everyday design against throwawayism.”

Living room by House Design Studio Look around at the style evolution happening in Missoula. From the modernization of older homes and the edgy new construction, down to the simple room makeover, contemporary design is making itself known to Graphic pillows help complete a room’s look. Montana. And it is no coincidence: The “minimalist” approach to decorating In line with this trend, House is a sign of the times, and modern Design Studio has an alternative to furniture is an expression of that traditional Western décor, bringing concept. We have done away with sleek and modern offerings to over-the-top design and opted for Missoula. A refined sofa, an iconic clean lines, minimal frill and objects coffee table and a plush shag rug at that hold meaning. To quote a well24

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your feet, and you’re on your way. Add some great lighting and a collection of your favorite objects to give the room a unique signature. “Finally a sofa that is not overstuffed” is a statement frequently overheard at House. For about $1,600 you can get a U.S. made-toorder sofa from Archetype designs. The company is known for its attention to detail and wide range of designs. Group the sofa with a pair of low-profile chairs in brick leather or an interesting fabric. The Isamu Noguchi-inspired glass top coffee table might be reminiscent of a ’50s style ranch house. At $575, the rounded shape and glass top are great for small spaces or oddly shaped seating areas. A simple shag rug will take the room from ordinary to distinctive. And it’s easier to clean than you might think. Creative Accents rugs are available in an array of colors, sizes, patterns and pile heights. As with any rug, size up when possible; a small rug will make a small room feel smaller. One of our great finds is a line of furniture made from rubber wood, a plantation-grown tree that is used to make latex. When the sap is depleted, the trees are harvested to make solid wood furniture, striking a balance between quality, design and environmental responsibility. End tables with versatile designs are priced at $95. This décor will work with almost any color scheme, but House is currently loving shades of white and gray, and punches of orange and blue. Well-placed table lamps, floor lamps and ceiling pendants, along with bright, graphic pillows complete the look. Designed by: Kate Ledford, House Design Studio, 133 N. Higgins Ave., 406-541-6960.

Reclaimed Wood & Metal

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Expert Essay:

A little help Why property owners should consider a property manager by Tom Chapman Are you considering renting your property? If you are, the benefits of hiring a professional property manager will undoubtedly relieve you of some stress and save you time and money. You are most likely familiar with the tasks of property ownership: paying bills, lawn care and up-keep. To rent property, add to the list the following tasks: advertising, showings, applications, leasing, security deposits, rent collections, lease violations, walkthroughs, emergency maintenance, terminations and evic26

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tions. Combined together, you have a lengthy list with new time-consuming matters, new expenses, and new situations that may elevate stress. How then would a professional property manager lower your stress and save you time and money? To begin with, depending on the type and number of units you intend to rent (consult with an attorney), the state of Montana requires property managers to be licensed. To retain their license, property managers fulfill annual education requirements. The Montana

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Residential Landlord and Tenant Act covers every aspect of property management. Just a few of the many important topics covered under the law are what terms are allowed in a rental agreement; what is considered proper tenant notice; what notice is required for entry into a tenantâ&#x20AC;&#x2122;s unit; and what can and cannot be withheld from the deposit when the tenant vacates. There are also statutes and rules on the accounting of all funds acquired in managing a property. Managers need to know these laws as well as federal laws

pertaining to the Fair Housing Act that protect applicants and renters from unlawful discrimination. As you can see, property management is a complicated business. Imagine juggling all the hats a property manager wears and staying within the parameters of the laws—it would be a challenge! Because managers are familiar with the law as it pertains to the practice of property management they can avoid mistakes that could lead to costly litigation. This saves you time and money and helps protect your investment. It is in everyone’s interest to avoid litigation. After all, the reason for wanting to rent the property in the first place is to see a return on the invest-

ment. One way a manager can help you save money is through established rent collection policies. Proactive policies that include penalties help minimize late rent payments. And, if the tenant doesn’t pay, professional managers know how to use the lease—the tool for managing property—to begin termination of the tenant’s agreement and, if required, to start the process for taking possession through the courts. Property managers relieve owners of the concerns of rent collection and minimize the headaches with tenants that are not in compliance. Money is also a concern when maintaining the property. For maintenance issues, many managers Homesteader 2011

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many owners choose to have a pool of reliable remain anonymous to the vendors who often offer a tenant—in the shadows, so discounted rate to the manager. Additionally, the to speak—knowing their manager can save you time properties are professionally cared for. making the Professarrangements ional property for seasonal are maintenance, Many owners managers familiar with lawn care and snow removal, choose to remain the parameters of the laws as and secure bids from ven- anonymous to the they pertain to pracdors for tenant—in the business tices and can extraordinary help avoid maintenance shadows, costly litigasuch as tion. They can replacing a so to speak— provide rent roof. knowing their collection and Another with important properties are help problem solvservice managers may professionally ing of difficult tenant situaprovide is a tions, such as 24-hour hotcared for. lease terminaline for those tions or court late-night and evictions. weekend Managers are able to proemergencies when the vide maintenance and/or plumbing pipe bursts, the networking with maintesewer overflows, the window breaks, or other issues nance vendors who may offer managers discounts. arise. A manager can get Also, managers are knowlthe vendor to the scene edgeable of the rental promptly, preventing market, a plus when deterexcessive damage. mining what to charge for Professional property rent. Another plus a manmanagers are also current ager provides the owner is with market trends. They can advise you on setting a anonymity from the tenant. Ultimately, hiring a rent amount that will proprofessional property manvide a maximum return ager will help lower stress, while at the same time and save you both time minimizing the number of and money. days the property is vacant. Tom Chapman is a Property managers licensed property manager relieve you of a multitude with Professional Property of concerns, thereby lessManagement, Inc. ening stress. If you prefer,

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Green thumbs up Tips on growing the perfect Garden City garden by Jed Nussbaum Missoula is known for its green thumb, and it’s got the backyard horticulture to prove it. But growing the perfect garden doesn’t always come so easily to every Garden City resident. In fact, according to some of our experts, you may be unknowingly doing things completely backwards. Don’t worry. Whether you’re seeking to successfully start your first garden, hoping to improve upon 30

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your already luscious plot of land, or looking to go organic but feel lost in a world filled with chemical fertilizers, we’ve compiled a variety of tips and suggestions on what to plant, where to plant it and how to take care of it.

Start with soil After a long winter, many local lawns are reduced to a lot of exposed

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dirt with sparse clumps of matted brown grass. For Jessica MacDonald, manager of Wagner Nursery and Landscape Co. in Whitehall, the key to turning the muddy browns into vibrant greens all comes down to soil. “Spend some time in getting your soil prepared,” MacDonald says. “Add some compost, add some nutrients.”

Organic compost material can be purchased at local nurseries, or gardeners can make their own compost material by mixing organic waste products, such as grass clippings, kitchen scraps and manure. Another starting point may be getting your soil tested. Beverly Gutman, owner of Marchie’s Nursery in Missoula, recommends either purchasing a do-it-yourself kit, such as the Rapitest Soil Test Kit for $5.50, or send-

ing a sample of your soil to the Missoula County Extension Services office. Extension Services (2584200) will send your soil to a lab to be tested for PH value. “Soil testing is going to give you some ideas as far as your soil’s nutritional value,” Gutman says. Beyond assessing your soil, there’s the importance of proper care throughout the summer. Bob Caras of Caras Nurseries says buying a mulching lawnmower will

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es to get the most amount of lawn. The optimum time to plant these grasses from seed is in the fall, making it the perfect way to end this season and springboard your yard next summer.

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help maintain the lawn as well as promote good growth. These machines use a different blade to cut the grass and spit the cuttings back onto your lawn in the form of no-cost,

chemical-free fertilizer. In addition, Caras points out that you’ll save the time you used to spend raking up clippings. Native grasses like bluebunch wheat grass and

Idaho fescue can be introduced to the lawn as well, but most native grasses are bunch grasses, and won’t really help with blanket ground cover. It’s best to mix them with other grass-

The alternative to lawn care, of course, is doing away with the actual lawn. Since they are not a native attribute to this area, Butterfly Properties owner Marilyn Marler recommends removing your grass altogether. Most lawns offer little food for animals, so she says replace it with “just about anything” to encourage biodiversity and wildlife. This also cuts down on the money put into lawnmowers, water and treatments

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McCollum Builders & Design is owned and operated by Douglas McCollum. The company has been in business since 2004, but Doug has been involved in various aspects of the building industry for over twenty years. Born and raised in the Nine Mile Valley west of Missoula, Doug is proud to be a local builder helping the community he grew up in succeed while emphasizing work with Montana-owned businesses. Baby-boomer-designed projects High energy efficient homes Low maintenance homes & landscape Concrete & landscape designing Green building practices One of Missoulaâ&#x20AC;&#x2122;s only design/build contractors Homesteader 2011

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for the grass. Instead, replace portions of lawn with wood chip beds and shrubs. Marler also advocates the use of entirely native plants, and she has a long list of ones that can help turn your yard from a naked eyesore into an eyecatching plot. You could choose anything from perennials like bergamot and prairie smoke to shrubs like service berry, mountain ash and Oregon grape. Other landscaping options abound. According to Caras, shade tree varieties are a hot item this year. New maples and oaks have made an appearance, as well as alternatives to Missoula’s popular flowering crabapple. Planting these trees

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will also aid in shade gardening, which can be hard to do in Missoula’s climate.

Water wise Like the rest of the living world, plants and veg-

gies need their water. Unfortunately, too many people botch this basic step. Caras says the best time to water your garden is during the early morning, so plants will have it when they most need it.

Beyond a specific time frame, however, Caras said it’s most important to be in tune with the plants— observe them closely to determine how much water a plant needs, and how often. “Some people may only

have to water every other day on a vegetable garden, and others are going to have to water daily,” he says. Marler adds that watering is often more about quality than quantity. In other words, instead of watering every day for a little bit, it’s better to water less frequently but for a longer duration. “That way the water gets down into the roots,” she says. “If you just water shallowly all the time, your plants are just going to grow roots in the top couple inches of the soil and always be thirsty.”

Time to plant? Overzealous vegetable lovers often jump the gun when it comes to planting their crops, only to have to replant after their first

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Hardwood floor planting is lost to frost later in the spring. Caras says cold season crops like onions, carrots and lettuce can be planted mid-April, but other plants—say, squash and tomatoes—need the warmth of the summer months. Space can be an issue for urban environments, so MacDonald recommends container gardening for herbs and plants like tomatoes and cucumbers. She also advises gardeners to employ the

native “Three Sisters” gardening technique for squash, corn and beans. The squash leaves provide shade for the soil, while the bacteria in the bean roots help absorb nitrogen and convert it into a form beneficial for the corn. Meanwhile, the corn provides a stalk the beans can grow around. Given the short growing season Missoula has, Marler stresses the importance of picking the right varieties of vegetables.

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The best time to water your garden is during the early morning, so plants will have it when they most need it.

“There are carrots that are better for short seasons in cold weather, tomatoes that are better for short seasons in cold weather,” she says. “You’ll also have a more productive garden if you start with bigger plants at the point where you can transplant them and not wait until the last minute.” Other factors, like plac38

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ing your garden where it will get the optimum amount of sun, are important as well. Ultimately, Marler says practice makes perfect. “Ask the extension agency, ask friends who work for them, and trial and error,” she says. Even with tips and pointers, experience still grows the best garden.

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Expert Essay:

To buy or not to buy Assessing whether homeownership is right for you by Brendan R. Moles To be or not to be a homeowner? With the state of the economy, this is a valid question on the minds of many potential homeowners. For some households the choice is easy—they have no desire to be a homeowner. Their choice is to be a renter. Maybe they like the freedom to move from place to place. They don’t want the responsibility of maintenance and repairs. Others may have the desire to purchase a home but are unable due to bad credit, lack of credit, too much debt or not enough income. Some folks might have all their ducks in a row but still need to find that perfect home. Whatever the choice, households that wish to become homeowners should consider their options and

weigh the pros and cons of homeownership. An advantage of homeownership is having a stable housing cost. With a fixed-rate mortgage the principle and

be tax benefits for those who are able to itemize their deductions rather than taking the standard deduction— home loan interest and property taxes paid each year are deductible from taxable income. In addition, mortgage payments are like an investment and, over time, homeowners build equity in their home. Making monthly mortgage payments on time also creates good credit. Owning a home allows the control and freedom to live as one wishes—choose paint colors, have pets and make improvements. Homeownership creates stability in a household, establishing pride, a feeling of permanence, and increasing

“Homeownership creates stability in a household, establishing pride, a feeling of permanence, and increasing your engagement and connection to the community.”

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interest payments will never go up, but be aware that taxes and insurance may increase each year. There could

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ed to be a successful homeyour engagement and conowner. Participating in a nection to the community. One should also consid- pre-purchase homeownership class from a reputable er the disadvantages to source provides instruction homeownership. There are and knowledge about the generally higher monthly home purchase process. (To costs of supporting a home assist with finding a highsince often the utilities and quality pre-purchase educamaintenance are more tion class, look for an expensive than rent. When organization that has renting, repairs are the adopted the National landlord’s responsibility; Industry Standards for these obligations fall to the homeowner upon purchase. Home-ownership Education and Counseling There is less mobility associated with homeownership. at homeownershipstandards.com). Selling a Education home takes enables one time— “Education to make an weeks, enables one to informed months and, depending make an informed decision about what on the mardecision about can be the ket, somelargest purtimes a year what can be the chase and or more. As seen over largest purchase most important investthe past sevand most impor- ment a pereral years, the housing tant investment a son will make in their market has person will make lifetime. suffered from the in their lifetime.” Classes include economic information downturn. on budgetThere are ing, savings, credit, affordno guarantees that a home ability, mortgage financing, will increase in value and, in some communities, hous- home inspection, homeowner’s insurance and the ing values have dropped roles of real estate agents significantly. In general, and lenders. owning a home should be If, after empowering viewed as a long-term oneself with knowledge investment. The good news about homeownership, the is that history has shown decision is made to become that homeownership is a a homeowner, then there good investment over the are a number of steps to be long haul. taken. Depending on an It is important to eduindividual’s situation, these cate oneself prior to maksteps can take several ing the decision to become months or even longer to a homeowner. Homeownership can be a complicated complete. They include: creating a realistic budget; and intimidating process, and education gives one the finding a reputable lender to determine a loan tools and knowledge needHomesteader 2011

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amount; deciding on home type and then finding the home with perhaps the assistance of a real estate agent; making an offer and upon acceptance entering into a purchase contract; having the home examined by a professional home inspector; securing home and title insurance; and, last but certainly not least, closing the loan giving the purchaser the deed to the property. Becoming a successful homeowner can indeed be very rewarding. In the words of one recent firsttime homebuyer, “Without a homebuyer class, I never would have taken that first step off the edge of the world into the land of the homeowner. I’m at the age

where most people are paying off their mortgage, and though I have a good job that I love, because of the wage scale…I am lowincome. The class taught me that I could do this, no matter what my age. I learned about all the pieces and where I would run across them in this journey and where I could look for

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financial assistance to make all this come about—and I did. I closed on a house last week that is perfect for me. It took me two years, but it happened.” To be or not to be a homeowner is a question that can only be answered by weighing present and future household needs and educating oneself on the pros and

cons of homeownership. The time to purchase a home, in the opinions of some, has never been better due to all-time low interest rates and reduced property prices. Though the ability to borrow dollars for purchasing a home has tightened, there’s not a better place to start the adventure than educating oneself by attending a homebuyer education class near you. Brendan R. Moles is the Housing Services Coordinator at homeWORD, Inc. (www.homeword.org) in Missoula. He is a HUD-certified Housing Counselor and facilitates and instructs the monthly first-time homebuyer education class, “Get Ready for Homeownership.”

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Homesteader 2011

2011 Missoula Housing Report A Community Service Provided by the Missoula Organization of REALTORS Introduction The Missoula Organization of REALTORS® started the Missoula Housing Report in 2006. In 2009, we were excited to partner with the Missoula Independent to create and distribute the condensed version of the full housing report to a larger audience (find the full report online at www.missoularealestate.com under “Market Trends”). We continue this tradition in 2011 because this is a great opportunity to give the current economic position of local housing and provide as much information as possible regarding the local market. We thank the Independent for its efforts in again

making this happen. The Housing Report Coordinating Committee is a group of individuals from throughout the Missoula regional community and they represent diverse industries and points of view related to the local housing market. Our overall purpose in devoting the many hours required to produce this report is “to provide a comprehensive, credible, and neutral picture of Missoula housing that can be used as a tool by community members and policy makers as they seek to serve Missoula’s needs.” “Neutral” indicates our intent to provide accurate and unbiased data related to housing. Neutrality is important because issues of housing, land use and growth may be unsurpassed in

their ability to elicit argument and emotion. While we recognize that there is nothing wrong with argument and emotion, we strongly believe that they require a foundation in fact and reason. That is what this report attempts to provide. With great respect for the land we all call home, and for the entire Missoula community that shares that land, we invite you to read this report and get involved in meeting the housing needs of our community. We hope that by providing this report, we will trigger discussions and action that will further contribute to a shared community vision and leave a positive legacy for future generations of Missoulians.

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Table 1: Missoula home sales declined in number and median price in 2010.

The Home Ownership Market Missoula County’s housing occupancy is made up of 56 percent owner-occupied and 35 percent renter-occupied residences. The vacancy level totaling about 10 percent is not entirely composed of units for rent, as total vacancies in our community include a significant number of residences that are used only seasonally or are temporarily vacant. Sales of existing homes in the Missoula area in 2010 declined both in number sold and in median sales price. This mirrors sales declines nationally. Home sales in 2010 were strongest early in the year and among “starter homes” that sold for $150,000 and less. The number of homes sold in Missoula in 2010

decreased by 12 percent. The median price of the homes sold in 2010 dropped by 4 percent. Overall, home sales prices since 2007 have dropped 8.7 percent. Looking more closely at our local market’s sales over the past two years, quarterly sales of homes show samequarter declines in every quarter of 2010 except the first. Missoula’s 14 neighborhoods experienced widely varying sales results. Among the more notable are consecutive significant gains over the past two years for two neighborhoods: South Hills and Linda Vista/ Maloney Ranch/Miller Creek. Sales have declined for five consecutive years in three neighborhoods: Central, Downtown, and University.

Figure 1: 2010 marked three years of price declines after five years of gains. 46

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me-tic-u-lous adjective: Extremely or excessively careful and precise. Figure 2: Although the median price continued to decline in 2010, fourth quarter saw an upward spike.

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Figure 3: The number of homes sold in 2010 was the fewest in the past decade...

Table 2: ... and sales increased only for homes in the lowest price range. Homesteader 2011

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Sales in 2010 of condos and townhouses increased in the highest and lowest price ranges, but declined in three of the four middle ranges.

Comparative Trends in Home Prices The housing market decline of recent years has been more severe both in the United States and in the West than in our local market. The downturn also started sooner elsewhere in the United States than in Missoula, with the number of homes sold dropping since 2005, a year earlier than in Missoula, and the median sales price declining since 2006, also a year earlier than in our market. The housing decline nationally is unprecedented. Real home equity has returned to its 1985 level and has been exceeded by the total U.S. mortgage debt for the first time on record. Home equity declined from a peak of $14.5 trillion in 2005 to $6.3 trillion in 2009, erasing 57 percent of all U.S. housing wealth. Nationally, as in Missoula, the first-time home buyer tax credit of late 2009 and early 2010 appears to have spurred a recovery in sales of low-to-

moderately priced homes, but with no apparent effect on still-declining sales of more expensive homes. Days on market for Missoula have generally trended upwards since 2002, with a relatively steep climb in 2009, succeeded by a marked drop in 2010. The absorption rate for Missoula exceeded six months throughout 2010 and, as in the past, consistently exceeds the national rate.

Pace of Home Sales One of two common measures of housing market vitality is days on market. Figure 4 shows, as one might expect in our northerly climate, that days on market is generally greater in the first half of each year than in the second halfâ&#x20AC;&#x201D; although this differentiation was largely absent in the past year. The figure indicates that days on market have generally trended upwards since 2002, with a relatively steep climb in 2009 succeeded by a marked drop in 2010. A second housing vitality indicator is the absorption rate. It is measured by dividing the total number of sales for the year by 12, then dividing that resulting number into the number of

Figure 4: After trending upward for several years, local days on market noticeably declined in 2010. 48

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Check out our always in demand rentals. Figure 5: The federal first-time buyer tax credit appears to have distorted the usual absorption rate in 2010’s early months and in summer.

active listings, which yields the number of months that will likely be required to work through the listed inventory. A result greater than six months is generally defined as a buyer’s market. Figure 5 shows that the absorption rate exceeded six months throughout 2010 and that the rate for Missoula, as in the past, consistently exceeds the national rate. The month-to-month absorption rate for Missoula in 2010 shows the apparent impact of the first-time home buyer tax credit that was available until the end of April. The year’s early months were marked by a declining absorption rate. Then the rate climbed

steeply in the summer months—normally the period of quickest sales—likely due to the tax credit no longer being available.

Real Estate Finance Activity Mortgage rates trended downward in the first and second quarters of the year, and then dipped to their lowest levels in third and fourth quarters, before a late-year jump put rates where they were in the first quarter. Mortgage activity was up, in part, from the first-time home buyer tax credit, historically low interest rates, reduced sales prices, and an uptick in refinances. In the near term, Fannie

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Mae and Freddie Mac play a critical role in advancing—or suppressing—revitalization of the housing market. Their March 2008 implementation of an “adverse market fee” and “loan level price adjustments” raised costs for almost all mortgage transactions, making homes less affordable. That effect is magnified by additional regulatory impacts on housing arising from the newly enacted Dodd-Frank Act. The Home Affordable Refinance Program has restrictions that have prevented many consumers from eligibility for the program. The Home Affordable Modification Program didn’t have nearly the beneficial impact envisioned by its proponents. The first wave of foreclosures, in 2007 and through 2009, mostly involved homeowners who defaulted because they got mortgage loans they couldn’t reasonably afford. In 2010, a larger share of defaults was attributed to unemployment and falling incomes. Even homeowners with traditional mortgages could no longer afford their homes, and many who could afford them walked away from underwater mortgages. In 2010, Missoula’s geographical market area was freed from enforcement of so-called declining market policies, as applied to investors and mortgage insurance companies. This had hampered some mortgage transactions with specific restrictions, now unnecessary as the mortgage market continues to stabilize.

Residential Rental Market Even in today’s depressed housing market, rental rates in Missoula are relatively strong and vacancies average less than 5 percent. Missoula rent rates remain stable at levels that, for many families, leaves too little income for other necessities, such as food, clothing, and health care. The Missoula Housing Authority (MHA) has 774 available Section 8 vouchers that subsidize rent to private landlords for eligible program participants. Another 262 vouchers are provided in Missoula by the Montana Department of Commerce through the District XI Human Resource Development Council (HRDC). Reduced tenant incomes caused the per unit cost, or need for assistance, to increase by 4 percent in 2010. That’s a reduction from the previous year’s increase of 11 percent, but more than the 2 percent to 3 percent average of prior years. For the first time in more than a decade, the voucher and public housing programs were fully funded by Congress in 2010, allowing more movement on the waiting list than in recent prior years. With full funding, MHA provided Section 8 subsidies to almost three times as many new families as in 2009, adding more than 160 new voucher holders. Unduplicated wait list numbers continue to increase in spite of full funding and the increase in number of new admissions. No new affordable units were added in 2010.

As part of the 2009 federal stimulus program, Missoula received $350,000 for the Homeless Prevention and Rapid Rehousing Program administered by the HRDC. The funding was used to prevent homelessness, and the full $350,000 was depleted by October 2010.

Down Payments Down payments are similar with most loan program types, including FHA and conventional loan products, as they have been in the past. FHA remains at a minimum requirement of 3.5 percent down, while some conventional products are being offered with 3 percent down payment. A more typical down payment would be

a minimum of 5 percent or more. The Wall Street Journal reported that the median down payment in nine major U.S. cities rose to 22 percent in 2010 on properties purchased through conventional mortgages. That percentage doubled in three years and represents the highest median down payment since tracking began in 1997.

Foreclosures and Short Sales Foreclosures may have turned a corner in 2010, with the first year-to-year decrease in net foreclosures in five years. This is in spite of a 27 percent increase in foreclosure notices of sale.

Table 3: Foreclosure notices increased 27% in 2010, but cancellations jumped by 60%…

Table 4: …so net foreclosures were lower in 2010 than in 2009 in three of the year’s four quarters. Homesteader 2011

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The key to the drop in net foreclosures was a 60 percent increase in notice of sale cancellations. Also possibly having an impact in reducing net foreclosures was a nationwide moratorium on foreclosure processing during the year by some large financial institutions. Missoula’s notices of foreclosure sale increased by more than 300 percent over the past five years. In the same period, net foreclosures rose by more than 400 percent, but these large percentage increases start from a low base number and are not numerically very large. Historically, foreclosures have been relatively rare in the Missoula market, amounting to well below 0.5 percent of the total owneroccupied stock. In contrast, according to the NAR, more than one-third of all U.S. existing home sales in 2009—about 1.8 million units—were short sales or foreclosures. For the entire country in 2010, according to online foreclosure marketer RealtyTrac, one of every 45 U.S. housing units received a foreclosure filing in 2010. Montana’s 2010 foreclosure rate placed the state far below most others, with only about 10 to 15 states recording a lower rate, depending on how foreclosures are measured. Short sales, in which the mortgage lender accepts proceeds from a sale for less than the total amount due on a home, are not a common device in our market. In the last half of 2010, Missoula’s short and REO sales numbered 32, representing about 16 percent of all home sales in that period.

Lot Sales and New Construction Sales of empty lots in 2010 were lower in number

of sales, but up by 21 percent in median sale price, compared with prior year sales. Building permits issued by the City of Missoula in 2010 increased from 182 to 302 in 2010. This gain was entirely accounted for in duplex and multi-family construction, as single-family permits declined for the fifth consecutive year. Missoula County building permits in 2010 increased for the first time in the past four years, with gains in all types of construction, including single family.

Population, Income, and Poverty Missoula County population continues to grow, passing 100,000 people in 2004 and gaining at about the rate of 500 to 1,000 each year. Net migration increases have declined sharply in recent years, with a moderate drop from 2006 to 2007 and a much steeper decline from 2009 to 2010. About 6,000 people moved to Missoula County each year since 2000, with two-thirds from another state and one-third from other Montana counties. About 5,500 people annually have moved out of the county in recent years. Net migration of out-ofstate migrants was strongly positive between 1992 and 1996. Since then, net migration has usually been less than 500, with a noticeable upturn in the most recent four years. Median income in Missoula County shows a markedly extreme disparity for 2008 between homeowners and renters. This relationship holds, but is less pronounced, both nationwide and for all of Montana. Missoula County’s inflation-adjusted per capita income increased steadily over the 10 years from 1997 through 2006, but since then Homesteader 2011

Missoula Independent

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Missoula Independent

Homesteader 2011

has leveled off or declined slightly. The county’s inflation-adjusted, non-farm labor income increased rapidly from 1998 through 2001, retreated somewhat, though it stayed positive, in the early to mid-2000s, barely moved in 2008, and dropped significantly in each of the past two years. Missoula County incomes are “bi-modal,” that is, concentrated at two distinct levels: $40,000 and under for households and $30,000 to $100,000 for families. In 2010, for the first time in the past five years, Missoula’s unemployment rate (at year-end) of 7.4 percent exceeded statewide unemployment of 7.2 percent, while both the county and state unemployment rates stood below the 9.4 percent national rate. Missoula’s escalating unemployment seems clearly to stem from a deepening recession, in which cyclic job losses have been exacerbated by permanent business closures and shutdowns.

About 18 percent of Missoula County households have incomes below the poverty threshold that corresponds to their household size and age. More than 60 percent of county households have incomes of double the poverty threshold or higher. Missoula has a more pronounced income disparity than the state of Montana as a whole, with a greater share of households under half the poverty threshold, as well as a greater share in the top category of over five times the poverty threshold.

Housing Affordability The Housing Affordability Index (HAI) for Missoula shows that in 2010, the income needed for an HAI of 100 percent is $57,216—which means a family whose income is at that level could afford a median priced home (or any home priced lower than the median). The HAI shows that a one-person household has approximately 75 percent of the amount of

income needed to purchase a home priced at the 2010 median sale price. The HAI shows that increases in median home prices significantly outstripped increases in median family incomes from 2002 through 2007. Then, consistent with the bursting of the housing bubble, home prices have lost value for the past three years—making homes more affordable. For many of those who wish to buy a first or move-up home, incomes remain below thresholds of affordability. Missoula’s improved affordability isn’t as pronounced as it is for the United States as a whole. Experts and professionals in real estate and financial planning generally agree that no more than 30 percent (and, more safely, 25 percent) of a family’s gross monthly income should be spent on housing. In Missoula, a significant percentage of households, divided into four age groups, spend more than the recommended maximum 30 percent of income on housing. About one in three homeowners in Missoula County pay more than 30 percent of their gross income for housing. The

problem is especially acute for homeowners age 25 to 34; nearly 40 percent exceed the affordability threshold. Renters in general pay an even greater share of their gross incomes on housing. Half of renters spend more the 30 percent of their income on housing. More than 60 percent of younger renters, many of who are students, pay more than 30 percent of their income in rent. Combined availability of housing vouchers, which are inadequate to meet needs in a healthy economy, is further strained by the economic downturn, as tenant incomes are reduced by lack of jobs or reduction in number of hours worked. The numbers on two of the wait lists dedicated to homeless households were 156 and 114.

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As stated earlier, experts and professionals in real estate and financial planning generally agree that no more than 30 percent (and, more safely, 25 percent) of a family’s gross monthly income should be spent on housing. Figure 7 shows that a significant per-

Figure 7: A significant share of homeowners and most renters still spend more than 30% of income on housing. Homesteader 2011

Missoula Independent

Homesteader 2011

centage of households, divided into four age groups, spend more than the recommended maximum 30 percent of income on housing. The national scene is similar. According to the State of the Nation’s Housing for 2010, after holding steady at 12 percent in both 1980 and 2000, the share of severely burdened households (spending more than half their incomes on housing) jumped by a third, to 16 percent, in 2008. A record 18.6 million households faced

these high cost burdens that year—up from 13.8 million in 2001. Nowhere in the country is the HUD fair market rent for even a one-bedroom apartment at or below $372, a level affordable at 30 percent of the median income of households in the bottom quartile ($14,868). About one in three homeowners in Missoula County pay more than 30 percent of their gross income for housing; it is especially acute for homeowners age 25 to 34.

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Missoula Independent

Conclusion and Outlook We again will assert our belief that housing prices in the Missoula market have bottomed or, more precisely, that they will have bottomed by year-end 2011. Also, with somewhat more confidence, we believe our market will experience a gain in the number of existing home sales. Mortgage rates can, with somewhat more confidence, be predicted to increase in 2011. A further decline in home prices would contribute to affordability gains, as it has for the past three years. A ray of hope in local rent affordability is offered by the significant 2010

increase in multi-family building permits issued. It’s unlikely, though, that apartments will be constructed and offered at a pace that will boost supply enough to measurably reduce rental costs in 2011.

But we have reasons for optimism. U.S. demographics in the next decade or so will powerfully increase housing demand. The baby boom generation is strengthening demand for senior housing. Meanwhile, the “echo boom”

will create a strong demand for housing for at least the next 15 years. Locally, two years have elapsed since the recession’s lowest point, and families and businesses are starting to adjust, and both are now positioned to spend more. In our local community, we have other conditions working in our favor. We seem to have escaped the full extent of harmful impacts of the housing downturn experienced across the country. We also enjoy a diverse economy, and we are a historically resilient population that bands together more tightly when adversity strikes. These qualities will prove decisive in overcoming today’s unprecedented challenges.

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Missoula Independent

Homesteader 2011

Missoula Independent