Land is always a big part of the real estate conversation in Missoula. But lately, many developers are saying the same thing: “Even if the land were free, we still couldn’t make the project work.” That’s a clear sign something has shifted.
In 2025, land sales haven’t stopped—but they’ve slowed. Projects are harder to pencil, especially when construction costs are high, interest rates are still elevated, and rents or sale prices can’t rise fast enough to close the gap.
What’s Still Selling—and What’s Not
Deals are still happening, but most of the activity is in two categories:
- Lower-cost land for commercial and industrial uses (often under $10 per SF)
- Large parcels that can be subdivided and platted, especially when the land is priced under $5 per SF
What’s sitting on the sidelines? High-priced land in areas like downtown or along major corridors. In many cases, the cost of the land—paired with what it takes to build—just doesn’t leave room for a profitable project.
Why Land Prices Aren’t the Full Story
When a project doesn’t work, land is often blamed. But land value is what’s left after the cost of construction, financing, and operations are taken out. If all those inputs have gone up—and revenue hasn’t—then the price you can pay for land has to come down.
In other words, it’s not that land is worth less in theory—it’s that developers can’t make the math work right now. And in today’s market, landowners who understand that reality are more likely to get deals done.
Comparing Land Comps? Be Careful.
Land comps from 2021 or 2022 are still floating around—but they don’t reflect today’s financing costs or construction pricing. What sold two or three years ago doesn’t always help a developer make a deal work today.
If a property sat idle during the recent building boom, there’s a reason. And that same challenge—whether it’s zoning, access, size, or cost—is still likely to be in play now.
Where the Opportunities Are
The best opportunities in today’s land market often come down to three factors:
- More affordable pricing
- Infrastructure availability
- Alignment with the city or county’s growth goals
The City of Missoula and Missoula County have done a solid job laying out where growth should happen. The updated 2045 growth plans and zoning codes help point developers in the right direction.
For sellers, this offers a chance to match a property’s use and location to what the market needs now—not what it supported a few years ago.
A New Way to Think About Land
In the past, landowners often set their price and waited for buyers to meet it. That strategy doesn’t work as well today. Most developers aren’t sitting on extra budget. If the deal doesn’t pencil out, it won’t move forward—no matter how good the location is.
And with supply costs already high, uncertainty around tariffs adds more risk. Materials could get more expensive, which means there’s even less room for high land prices in a successful project.
Instead, land pricing needs to start with the finished product in mind. What will the buyer or tenant pay for the space? What will it cost to build? And only then—after backing out all those costs—can the land value be determined.
That’s not a fun conversation, but it’s a necessary one. And it’s the kind of thinking that gets deals to the finish line in 2025.
