Real Estate Roundtable: The Time is Now Partner Website

For Western Home Journal’s third Flathead Valley Real Estate Roundtable, three of the valley’s top realtors met at Casey’s in Whitefish to discuss the current tenor of the market. Chap Godsey, Broker Associate at RE/MAX of Whitefish, Chance Wachholz, Realtor at West Venture Real Estate of Kalispell, and Jeff Raper, Managing Broker at National Parks Realty of Whitefish shared themes of market recovery, a growing demand for spec and residential development versus empty lots or land, and an overall great timing for investment. An agreement prevails that the Flathead Valley, and all it has to offer for a whole and balanced lifestyle, continues to be a favorite in the hearts of many.
BY Alethea Schaus / Photos Sonja Brugard

What brought you to the area?

Chance Wachholz, West Venture Real Estate: My first job here was as a real estate agent. I got here in 2008, just when things went south, so my second job was as an order picker for local beer and wine distributor. I also tutored math and statistics on the side. As things kicked back up, I got back into real estate full-time.

Jeff Raper, National Parks Realty: I moved here as a fourteen-year-old kid and did outside maintenance and helped in the kitchen where the Whitefish Lake Lodge is now. My family moved up from Bend, Oregon. We bought what was then the Rocky Mountain Lodge, and went into business operating a hotel, then learned four years later that it was tough to do that as a family business. We sold it to the current owners. I got licensed in 1998 and started working for a local team.

Chap Godsey, RE/MAX of Whitefish: I moved to Whitefish in the summer of 1995 and worked for a custom homebuilder for two years and then contracted tree thinning from the forest service. That was an amazing job and experience, but one that was also hard on my body. I earned my real estate license at the end of 1997 and started full-time at the beginning of 1998.

Where is the Flathead Valley market now? What are the conditions as far as demand and inventory?

Raper: Incrementally, it’s doing great. It’s active—still some hesitancy, but it’s active. Now in certain segments, there are multiple offers going on and a lot of buyers are surprised at this. The inventory under the $350K range is just drying up, so it’s more aggressive. We’ve grown incrementally monthly.

Godsey: Very active, transaction numbers are way up. It is currently a good, well-working market that is neither a buyer’s nor seller’s market, and a great time to buy. All agents in our office are busy and it’s been that way for about 18 to 24 months.

Wachholz: I think the key is buyer confidence right now. As far as volume, we’re seeing 2007 numbers. As long as we are seeing volume, the consensus in Kalispell is that everyone’s busy and agents can make a living again. We’re slowly coming out of the recession.

Godsey: And it’s really broad based. We are seeing a lot more commercial investment and local development. Rates are low and prices are still low, so affordability is great right now. Inventory is shrinking and demand is increasing. Even building permits are improving and are up about 20 percent from this time last year.

Raper: Lot sales and land sales are still very sluggish in some aspects. There is much more demand for spec housing. There isn’t a lot of incentive for land or lot sales right now due to interest rates. The buyers are more confident, but we’re seeing some changes that if they don’t get off the fence, they might miss out as prices are going up.

Wachholz: We’re probably not going to see a greater time to buy. Interest rates are still down and prices are going back up. Land, on the other hand, is an interesting commodity—it hasn’t really followed the trends of others in the market. It’s the one commodity that hasn’t lost in past decades, but recently it hasn’t made as quick of a recovery as other assets. Eventually, those land sales have to kick up. It’s just a question of when.

Raper: Once they hit the price point, they sell out. A lot of places are building on lots; it’s becoming more of a cottage home market and spec home situation. These properties are all set up with maintenance included. A lot of folks have quit trying to sell their lots, and are marketing them residentially instead.

Wachholz: I believe some Canadians purchased a whole subdivision in Lakeside recently.

Raper: There are some Canadian developers in Bigfork now. Some are still struggling a bit; they’re figuring out how to sell these properties. The developer groups that are coming in are younger now, and that’s interesting to see.

What makes the Flathead Valley market unique?

Wachholz: The year-round recreational activities we have here are amazing—a couple of ski resorts and all of the lakes. Lakes in such close proximity are a rare find compared with other places. Outdoor activities are really what bring and keep people here.

Godsey: In addition, Glacier Park, the incredible golfing, and the local things like farmers markets, art festivals, and even the great weather. A lot of people come out here to beat the heat in the summers. We have small town living, and for baby boomers, it brings back special memories of the way things used to be. There is something for everybody.

Raper: If anything, the climate is getting milder. The shoulder seasons now have way more to offer. The Canadians don’t dominate the market as much as some may think. Their economic dollars drive the market, but they aren’t here as much as you’d think. A lot of folks from other states are making this their home. It’s still a small town, and the quality of folks here are the kind that invest in their community. There are a lot of large-scale projects coming through the planning department right now all at once. When product comes up, we barely have a chance to list it; things don’t stick around long. For a lot of the price points, the buyers are not local and they have a multitude of places to invest in other than here. Some are still leery of too small of a town, but among many other things, we have the Alpine Theatre Project and the Glacier Symphony here. We might be smaller, but we have many of the amenities of a large-scale area. And the air access is better than it’s been. Between Amtrak, I-90 relatively close, and the improving air service, it’s all more accessible.

Coming out of the slowdown, how are you and your firm doing business differently? Did it change the local industry?

Godsey: One of the most noticeable things now is just keeping up with the pace. Coming out of the slowdown, everyone’s really running. The market is doing well, spec homes are being built, local people are being employed, and that’s how the local economy improves. It gets everyone get back in the game again.

Wachholz: With so many jobs doable via telecommuting, we can be wherever we want to be, as long as we get the quality of life. West Venture has more agents than anyone; that’s one approach to improving market share. We have offices in Whitefish, as well as Kalispell and Lakeside, and we’re looking to continue branching out. I think one thing that we have to our benefit is that we don’t have to just cater to the high-end properties. We can list a $150K town home, for example, and if it’s of quality and has value, it will sell very quickly. We also have the expertise and presence on to cater to the high-end folks.

Raper: I was with an independent office and shifted in June of 2010. I realized that it was tough to start up a new venture. Then an opportunity to merge with another company that had been around for about 10 years arose. People find us easily via the Internet.
The offices that were hitting home runs in the past were the franchises, but now it seems the independents can make it a bit more, perhaps due to the technology. Really, what it comes down to is the tenured folks who’ve put in the time, but there is always room and a need for new folks and new energy.

Godsey: I was with Chuck Olson Real Estate and we merged with RE/MAX to increase our presence. We have a great mix of agents and experience. As far as target markets, we have to be a jack-of-all-trades and don’t do just one thing.

How would you compare segments like land/lots, new homes, existing homes, condos versus single family, and buying neglected properties with a major overhaul in mind? Do you see changes in these trends over time?

Godsey: I think land sales took the biggest hit of all, but land can still be a great investment. I think there are plenty of people considering all of the different kind of properties out there; it just depends on their preferences.

Wachholz: Bank-owned properties are down forty percent.

Raper: What I still see is the large bank-owned properties that are trickling out to the market, and not as much from the local banks. They understand the local market better than the bigger ones and have different motives. Short sales are far more complex to process than a normal sale.

What forces may change things in the Flathead Valley market in the future? Is there anything holding it back?

Godsey: I don’t think there is much holding it back because people really want to be here and more and more people are learning about this area. We’ve gotten a lot of recent media exposure from things like The Bachelor and the Nissan commercial, which really has put the spotlight on Whitefish. Good jobs are one thing that has held this area back, but technology is allowing more people to move here and bring quality jobs with them. Regarding the real estate market specifically, my biggest concern is too much of an increase—sellers getting too confident and raising prices too quickly or rates rising too quickly. It’s working well right now. If there’s a slow balance of these increases, it’ll probably be a steady and healthy market. But if these things get unbalanced, then it could definitely slow things down for everyone.

Wachholz: You’ll see the eastern regions of Montana a little stronger because of the money coming in from the Bakken oil fields. There’s still a lot of money coming back to the Valley. People want to live here, rather than there, and as long as they keep moving back and bringing their money back to the Flathead, it’s a good thing.

Raper: At the end of the day, Eastern Montana and Western North Dakota are some harsh environments to live in. Many local craftspeople are coming back now. There are more jobs here again.

Wachholz: I see new gun manufacturers popping up left and right here, which seems to be good for the economy.

Raper:Folks don’t have to live here—we will always be a chosen market. And while that doesn’t insulate us from outside events, it does provide a buffer.

What is the status of repeat buyers versus newcomers? Are you seeing more lifestyle buyers with a long-term commitment to the community?

Raper: I think we’ve always enjoyed the luxury of both. Whitefish is a cleaner, more vibrant community than ever before, and the heart of the community is still here.

Godsey: Chap: I think folks invest in the area because they really appreciate the community. There are articles in the Whitefish Pilot every week from folks commenting on what’s going on in the local community, even if they live elsewhere. They care a lot.

What is your best advice for a buyer looking at the Flathead Valley market today?

Wachholz: I say trust your real estate agent. I really mean that. Bank-owned properties involve a lot of variables, multiple offer scenarios, etc. REO’s are usually priced at sixty or seventy cents on the dollar. If a buyer wants to discount it another 60 to 70 percent, they’re unfortunately going to miss out. Folks have to trust their real estate brokers and agents. The ones left…they’re educated, and they know their market.
Godsey: I think you had better jump in now, or soon. Rates are going up and prices will start kicking up, as well. The market will always go up and down, but the current affordability of the market is the best it’s been in about 50 years.
It’s a great time to get in the market.