2025 Missoula Real Estate Trends You Need To Know

By Jason Baker

Jason Baker is the leading listing agent in the entire regional mls for residential and or total units sold, 8 years running. He is a tireless worker, and surrounds himself with the best admin and sales team in Montana...and the results speak for themselves.

I get asked all the time, “What are the prices going to do in real estate this year?” It’s a fair question, especially with so much uncertainty surrounding the housing market. Let me break it down for you in simple terms so you can make better decisions, whether you’re considering selling your home, buying a new one, or just trying to stay ahead of what’s happening.

What’s the current market condition? We kicked off 2025 with about 100 more homes for sale in Missoula County compared to January last year, and similar increases across other counties. That means we have more inventory in our market right now. Interestingly, those homes are sitting on the market longer. On average, properties are taking between 120 and 150 days to sell.

But why are homes taking longer to sell? Two significant factors are at play:

First, more inventory is available, allowing buyers to take their time when making decisions. Second, interest rates remain stubbornly high, making it harder for many to qualify for loans, especially as they carry more revolving debt than ever. With high expenses and tight budgets, life is challenging for a lot of people right now.

Mortgage delinquencies and their impact on home values. I recently read a report saying 6.1 million homeowners are 30 days or more behind on their mortgage payments, the highest number we’ve seen in years.

If you’re one of them and are concerned about your situation, I’ve helped thousands of homeowners navigate challenging situations like this through short sales and other solutions. Reach out, and I can walk you through your options.

This trend could still impact your neighborhood even if you’re not personally affected. Homeowners facing foreclosure often list their homes below market value to sell quickly before losing them entirely. If this happens near you, it could affect your home’s value. While we’re not seeing anything close to the foreclosure crisis of 2008 to 2012, it’s worth keeping an eye on.

When finances get tight, people prioritize essentials, letting go of credit cards, cars, and other expenses before finally struggling to pay their mortgage. This pattern suggests we could see more distressed sales in the coming months. While this doesn’t signal a collapse in home values, it highlights the importance of staying informed.

What should buyers do? Interest rates aren’t expected to change much this year. They might move slightly up or down by an eighth of a point, but don’t expect significant drops anytime soon. If you find a house you love and the numbers work, feel confident moving forward. And if rates drop in the next couple of years, refinancing is always an option.

What should sellers do? Sellers need to be realistic. With more homes hitting the market, competition is heating up. Sellers who need to sell quickly are already lowering their prices to attract buyers. More competition means sellers aren’t likely to net more money. If you plan to sell this spring, listing sooner rather than later is smart to avoid the rush.

Timing is crucial right now. We are currently experiencing some of the lowest inventory levels we’ll see all year, with around 450 homes expected to be on the market in Missoula County, possibly more. This trend is also true for Ravalli, Sanders, Lake, and Flathead Counties.

Waiting for another 100 to 150 homes to be listed could hurt your chances of selling. Homes are already averaging 120 to 150 days on the market. Increasing inventory will only make things tougher, as sellers who need to sell are increasingly lowering their prices to close the deal.

You can check or track your home’s equity if you’d like to use my Home Value Calculator. Keep in mind, these are automated estimates, so take them with a grain of salt. If you’re considering making a move in the next 30 to 60 days and need a precise valuation, don’t hesitate to reach out to me at (406) 552-4443 or jason@jasonbakerteam.com. There’s no cost for this service, and I’m happy to help.