Simply put, by a buyer and not an agent whom only work for the seller and not the buyer, the real estate agents in Western Montana are also the sellers. They're all friends and if you do the research you will see that the real estate agents are also the landowners in many cases. They are all buying and selling and dancing and jigging and making bank off of one another as they play the local markets.
They give you a song and dance that you are "paying for the view". When the view they refer to is the mountains which is on fire and you can't see from smoke for most of the Summer/Fall and in the Winter/Spring the Mountains are not accessible because of being snowed in, property costs should be much lower because there is no view.
As others have pointed out, there are no jobs in Ravalli County. The buying and selling is coming from people and corporations from California. The closest average sized town is 60 miles away in Missoula and the job market there is even non-existent. Businesses only want to pay minimum wage while rent/mortgage is at a premium. We can't afford to eat while the real estate agents laugh all the way to their off-shore banks.
By the way, Ravalli agents keep trying to say that living here is safe. No, not even close. Firstly, as of Fall 2016 the city of Hamilton, MT crime rate is at 300%. The area Republicans walk around with guns and threaten to "take up arms" against all Democrats and any who disagree with their twisted anti-Constitutional logic. Disagree with me? Then look in to the "Obama Library" outhouse that the current Commissioners and Sheriff all had a part in condoning. It was a direct threat to kill not only President Obama but any and all Democrats in the Valley who voted for him. By the way, these same people are the school teachers who are a threat to our children. Ravalli County Montana is nowhere near a safe place to live.
Off the soap-box and on topic, this question was posted in 2009 but, in 2017 the answer is still the same. Greed and lack of empathy is why prices are still high and will stay high in the Bitterroot Valley.