Missoula rent prices, vacancy rates hold steady despite multiplex building boom

New apartment projects, including this one located at Brooks and South Avenue, have done little to increase the city’s vacancy rate or change the price of rent. (Missoula Current)

The building boom in new apartments across Missoula did little to put a dent on the city’s low vacancy rate or drive down prices in 2017, according to a new housing report by the Missoula Organization of Realtors.

The annual report, released Tuesday, found that rent ticked up slightly over the prior year, with the average rent for a one-bedroom unit fetching $632 a month in a multiplex, or $850 for a three-bedroom unit in the same building.

“In 2016, rents in some situations took a little bit of a step back,” said Brint Wahlberg with Windermere Real Estate. “But what we saw this year was that most of the rents saw a slight raise back up, but are still hovering around a similar point where they haven’t made a lot of moves.”

Over the past three years, rent prices in Missoula have fluctuated roughly $20 – down slightly in 2016 and back up in 2017. Yet that depends on the type of unit and the number of bedrooms.

Overall, the change in average rent across Missoula increased roughly $15 in 2017 while it jumped around $30 statewide. The gap between the two – as wide as $70 just five years ago – has closed to roughly $46.

“The average rent in Missoula remains higher than the statewide average, but the gap between Missoula’s average rent and statewide rents has closed a little bit,” Wahlberg said.

During the release of the annual housing report several years ago, it was suggested that a wave of multiplex construction could eventually lead to an increase in vacancy rates and, perhaps, a decline in rent.

But while rents have remained stable, so too has the vacancy rate. For all units, the average vacancy rate sits at a scant 3 percent – up from 2.9 percent in 2016. One-bedroom units in a multiplex had the highest vacancy rate at 3.5 percent in 2017 while three-bedroom units had a lowest at roughly 2.8 percent.

“Vacancy rates have pretty much hovered around a low of 1.2 percent to a high of 4.8 percent,” Wahlberg said. “There’s a lot of multiplexes being built up – a lot of multiplex activity – but the multiplex vacancy continues to remain low in most situations, where you have basically nothing in some classes.”

The city’s low vacancy rate comes as something of a surprise given the uptick in multiplex building over the past few years. From 2005 to 2007, the city and county issued permits for 335 multi-family units.

From 2015 to 2017, that increased to 1,434 units.