In 2023, the Montana land market continued to slow down dramatically after the historically strong market peak in 2021. The volume of transactions and the available inventory for properties sale declined to levels not seen in over a decade. The factors driving the historic levels of demand leading into 2021... COVID refuge, political disruption, and the Yellowstone series... dissipated in 2022 and 2023, and the diminished inventory resulted in few options for replacement property, which further dampened transaction volume. Many sellers in the Montana land market look to replace property when they sell, and were not able to find replacement property in the current environment.
Interest rates also impacted the market, even though a high percentage of land in Montana is purchased with cash.
On average, land values declined slightly from the highs seen in 2021. However, that decline was not uniform across all property types. Top-tier properties with high recreational amenities and prime locations showed stable or even increases in value, while lower tier properties showed a decrease in values. Brokers of top-tier properties report that despite lower volumes of sales in 2023, the dollar volume of their sales was very high in 2023, reflecting the continued strength of that portion of the market.
Despite the historic levels of demand for land in Montana peaking in 2021, there was not an increase in the number of properties listed for sale. This shows that sellers in Montana often make the decision to sell largely outside of market forces. They are not as motivated by market forces as they are by their own internal factors.
At the 23rd annual For Lands Sake presentation, held February 6th, 2024 in Bozeman, MT, Andy Rahn from Montana Land Source and appraisers from Norman C Wheeler & Associates and AgWest Farm Credit shared data on the 2023 Montana land market. The meeting is always highly attended, as it is the best opportunity of the year to learn in depth about rural Montana land values and trends. The presentation was part of the 4th Annual Winter Real Estate Roundup, which was organized by the Montana Chapter of the American Society of Farm Managers and Rural Appraisers (ASFMRA), and provides the highest-quality education and networking event for Montana's top rural real estate industry professionals.
Below is a PDF of Andrew Rahn's presentation from Montana Land Source data:
