Ask two people who watched the Kalispell market last year what happened to home values, and you'll get answers that sound like they're describing two different towns. One will tell you prices softened. The other will swear they climbed. Neither one is lying.
In the second half of 2025, homes priced under $1 million across Flathead County lost about 4 percent of their value while homes priced above $1 million gained roughly 10 percent, according to Lakeside broker David Fetveit, who has watched this split emerge in real time. Kalispell sits inside that same countywide split, which means the citywide median you see on a portal is really an average of two markets moving in opposite directions.
Fetveit put it plainly: the market that froze in 2022 is finally starting to move, but not evenly.
"It's more of the ice is beginning to break. It's not really flowing yet."
That single line explains more about buying in Kalispell right now than any headline price ever could.
Two Markets Wearing One Median
Look at what the median has actually done and the volatility starts to make sense. According to Northwest Montana Association of Realtors MLS data, Kalispell's median sale price rose from $535,000 in 2024 to $560,000 in 2025. That looks like a modest, orderly climb until you zoom into a single winter. Between January and February of 2026, the median jumped from $505,000 to $552,500 in one month, a $47,500 swing, before settling in just below the same month a year earlier.
A market doesn't move $47,500 in thirty days because every house in it got more valuable. It moves because the mix of what closed that month shifted between the two tiers Fetveit described. Some months lean starter-home heavy. Some months a handful of larger closings pull the average up. The number is real. What it represents changes from one reporting period to the next.
Aaron Noel, a realtor with my team at Brody Broker in Kalispell, described the summer of 2026 as a market that's still balanced and healthy, even with rates holding between 6 and 7 percent. June 2026 brought 210 closed sales compared to 175 the year before, and the value of those closed sales jumped to $194 million from $110 million over the same month. Notice that the dollar figure grew faster than the unit count. That gap is the price-tier split showing up again, just from a different angle.
Here's the same story in two rows instead of two paragraphs:
| Segment | Second half of 2025 | What's driving it |
|---|---|---|
| Homes under $1 million | Down roughly 4% | Primary-residence buyers stretched thin, sellers competing on price |
| Homes over $1 million | Up roughly 10% | Second-home and luxury demand holding steady |
If you're comparing two Kalispell neighborhoods and one of them is quoting you a median from six months ago, you're not comparing homes. You're comparing whichever tier happened to close more often that season.
The Part the Median Never Explains
Even if you could pin down which tier a neighborhood actually belongs to, the price tag still wouldn't tell you whether it's affordable for someone earning a Kalispell wage. That's a separate question, and the numbers on it are worse than most relocators expect.
University of Montana Bureau of Business and Economic Research Director Jeff Michael laid out the math at a mid-year economic update in Kalispell this summer. He walked the room through the standard affordability test: what share of median household income it takes to buy the median-priced home with a 10 percent down payment. Nationally, that threshold runs about 43 percent. In Kalispell, it's 67 percent.
Michael's framing of the 30 percent rule of thumb makes the gap land harder:
"Thirty percent of your income is generally considered a threshold for a definition of affordability, and from 2009 till 2019, median households all across the country nationally met this affordability threshold of 30 percent."
Kalispell isn't just above that threshold. It's more than double it.
What makes this worth sitting with is the comparison Michael drew next. Gallatin County, home to Bozeman, has a more expensive housing market than Flathead County on paper. But Michael noted that Gallatin's incomes keep closer pace with its prices, so its residents actually fare a little better on this measure than Kalispell's do. In his words, Flathead County has "the most acute affordability problems" in western Montana relative to local income, not because the homes cost more than Bozeman's, but because local wages haven't kept up the way Bozeman's have.
None of this is slowing demand down. Flathead County continues to post the highest in-migration of any county in the state, based on IRS tax filing data the BBER compiles. Montana's overall population growth has cooled since the pandemic-era surge, with the state adding roughly 6,348 new residents in 2025 compared to more than 20,000 in 2021, but Flathead keeps pulling people in anyway. Demand doesn't pause just because the math stopped working for the people already here.
The Zoning Map Just Moved Under the Same Median
While the price story was playing out, Kalispell was quietly finishing something that changes what gets built next to whatever house you're considering, and it happened on a state-mandated clock that most buyers never hear about.
In 2023, the Montana Legislature passed Senate Bill 382, creating the Montana Land Use Planning Act. MLUPA required ten Montana cities, Kalispell among them, to replace their old growth policies with new 20-year land use plans and updated zoning by May 2026. Kalispell's city council formalized that plan in April, finishing the zoning and subdivision rewrite required to comply with the state's full MLUPA framework.
The most practical change for anyone comparing neighborhoods: duplexes and accessory dwelling units are now a permitted use in every residential zone in the city, not just the denser ones. That change was recommended by planning staff back in February and rolled into the final code, alongside shifting multifamily buildings from a conditional to an outright permitted use in commercial and office zones, cutting minimum lot sizes by 25 percent, and loosening parking requirements to line up with the state's House Bill 492. On top of that, the city folded its old R-3 and R-4 zones into one. Councilor Sid Daoud explained the reasoning at the April meeting, noting that state code already permitted duplexes in both zones, so keeping them separate only added confusion the city didn't need.
There's a second piece that matters just as much as what changed. MLUPA eliminated the public hearing requirement for individual site-specific developments, replacing it with hearings held only during the broader 20-year planning process and community check-ins every five years. Councilor Kyle Waterman acknowledged the tradeoff directly when the council built its new public participation plan in June, saying the city wanted to make sure residents still had ways to stay informed even though the old hearing requirement was gone.
Put together, a parcel that used to be R-4 with a public hearing standing between it and a new duplex next door now sits in a merged zone where that project can move forward administratively. You can see what this looks like on the ground already. Bloomstone, the mixed-use development off Four Mile Drive, has grown from its original 2008 plan of 569 units to an approved 702, with its fifth and sixth phases alone adding 288 apartment units. Parkline Towers brought 224 new apartments to the city's east end along U.S. 2. And the city's own 2025 development report shows permits issued for 406 multifamily units against just 114 single-family and townhome units that year, a ratio that runs opposite to what most buyers still picture when they hear "new construction in Kalispell."
What to Actually Check Before You Compare Neighborhoods
None of this means Kalispell is a bad place to buy. It means the single number most buyers lead with tells you almost nothing useful on its own. Before you compare two neighborhoods, or two towns, here's what's worth pulling instead:
- Ask which price tier a specific listing actually sits in, not what the citywide median says that month. A street full of $450,000 homes and a street full of $1.2 million homes can both technically be "in Kalispell" without behaving like the same market at all.
- Pull the zoning designation on the actual parcel, not the neighborhood's reputation. Duplexes and accessory dwelling units are now a permitted use citywide, and former R-3 and R-4 lots are now one merged zone, both changes that can move forward without the public hearing that used to give neighbors a say.
- Run the affordability math against your own income, not the national median. Jeff Michael's 30 percent benchmark is the number that matters, and Kalispell's current 67 percent ratio means the math is tighter here than the sticker price alone suggests.
A couple of questions that come up often
Does the zoning change apply to homes outside Kalispell's city limits? No. MLUPA only applies to the ten Montana cities named under the law, including Kalispell, Whitefish and Columbia Falls. Homes in unincorporated Flathead County fall under separate county zoning that wasn't part of this rewrite.
Will my existing single-family home suddenly have new rules? Existing homes are grandfathered in as they are. What changes is what can legally be built on a comparable lot going forward, which matters most if you're evaluating vacant parcels, teardowns, or the character of a street you expect to stay the same for years.
If you're trying to figure out which Kalispell market a specific listing actually belongs to, or whether a lot's zoning still means what it used to, that's exactly the kind of question worth working through with someone who tracks this month to month rather than glancing at a portal once. Nelson Schwab has been walking Flathead Valley buyers through these details long enough to know which numbers are worth trusting and which ones need a second look. Schedule a free consultation and we'll figure out what your budget actually buys, not just what the median says it should.
