An increase in home affordability throughout most of Montana’s major real estate markets was the main highlight of the annual report on Housing Affordability and Montana’s Real Estate Markets, which was released by the Montana Association of Realtors (MAR). The 2011 study marks the fourth consecutive year that MAR has partnered with the University of Montana’s Bureau of Business and Economic Research (BBER), which conducted the research and wrote the report. The centerpiece data in the report is MAR’s Housing Affordability Index (HAI), which calculates whether the prevailing median household income can afford the median-priced home. An index below 100 denotes less affordability, while one over 100 denotes more affordability. The Bitterroot Valley Board of Realtors (BVBOR) provided Multi-listing Service (MLS) data to the BBER to generate the report. The Ravalli County portion of the report showed a slight dip in housing affordability with an affordability index that went from 97 in 2009 to 92 in 2010. An index of 100 means that the median household income is enough to afford the median-priced home without having to spend more than 30 percent of income on a mortgage. As the lower 2010 index of 92 indicates, about 36 percent of median housing income earners in Ravalli County can expect to pay more than 30 percent of their income toward housing. The good news for Ravalli County homebuyers is that, despite a 5.5 percent increase in price over the previous year, the 2010 price of $200,000 is still 11 percent lower than the peak price of $225,000 in 2007. Ravalli County’s HAI was 78 in 2007 and now stands at 92, inching closer to the affordability index of 100. “We’re excited that the report shows that Ravalli County is still close to the affordability threshold,” Bitterroot Valley Board of Realtors President Cathy Locatelli observed. “Whether you are a first-time home buyer, or an existing homeowner looking to either upgrade or downsize, Ravalli County’s market has a great selection of homes to choose from at attractive prices. And with interest rates being so low, it truly is a great time to buy.” Much like the rest of the nation and the state, 2010 was another year of adjustment in Ravalli County’s housing market. While the median price increased slightly in Ravalli County, the number of residential sales decreased a slight two percent, but 60 percent lower than the peak sales year of 2005. Days on the market have increased as well. Ravalli County is one of nine counties in Montana with a foreclosure rate higher than six foreclosures per 1,000 transactions. Ravalli County shares with other areas featured in the report the same sobering news about housing starts. 2010 starts in Ravalli County are 80 percent off of their 2005 peak. “It’s nice to see relatively positive housing affordability statistics coming out of this report for the Ravalli area when so many other economic indicators paint a less optimistic picture,” observed Locatelli. “We believe that Ravalli’s recent gains in affordability present a great opportunity not only for homebuyers but for businesses looking to expand or locate in our area.” To view the complete report, visit www.montanarealtors.org.