April 30th, 2020

Price Trends Bozeman Real Estate

Price Trends Bozeman Real Estate

2020 Bozeman Price Trends Report – Market Updates – Home Price Trends – Bozeman Bubble…Burst…Stasis? – Median Home Prices

Bozeman Price Trends: Statistical Reports, Market Conditions for Bozeman, Montana in 2020 – Bozeman Real Estate Bubble…Crash? How Clear Is Your Crystal Ball? – Coronavirus

2013 to 2019 Median Sales Price Bozeman Residential Homes Only
Chart 1: Median home prices for Bozeman homes ONLY, inside and outside city limits. Condos here.

Inside the Bozeman city limits (Chart 1): the median single-family home sale price trend began 2020 at $460,000 and rose to $465,000 by late March.

Comparing Bozeman residential median prices March 2019 to March 2020, we find a $35,000 increase in Bozeman’s intracity median home price over March 2019. (‘Want condo/townhouse data?)

In March 2020, outside Bozeman’s city limits (Chart 1), median single-family (precludes condo/townhouse) home prices were $560,000, a $25,000 increase over March 2019.

Imminent Bozeman Housing Bubble…Burst…Crash Due To Covid-19?

Bozeman Real Estate Median Home, Condo, Townhouse Sales Prices.
Chart 2: Bozeman median sales prices for ALL residential: homes, condos, town-homes, inside and outside city limits.

Things to consider when predicting a housing bubble in Bozeman (…or pretty much anywhere in the US) is to try to answer these questions and others:

  1. Is the home’s “price” justified?
  2. Is the home’s “price” more than 3x’s your income?
  3. Has the home’s price increased 2x’s or 3x’s more than local rents have increased?

These are some of the questions to answer regarding a possible housing bubble in Bozeman, or in other US housing markets.

Bubbles are generally fueled by supply and demand; investor speculation; and buyer exuberance. In Bozeman, supply is moderate, demand is moderate to high, and exuberance is moderate to high. Speculation is difficult to assess.

More than likely due to Covid-19, Bozeman’s real estate market has slowed, as indicated by the 7.5% drop in pending sales, early May 2020 (Chart 3). This mild decrease should adjust upward as the summer progresses.

Market previous to Coronavirus pandemic: Is the continued rise in home prices inside the city limits of Bozeman indicative of a Bozeman housing bubble? Well…the housing demand inside Bozeman is still high and prices have responded; only time will tell if this is a continued Bozeman bubble, but Bozeman builders continue with new intra-city projects.

Bozeman Real Estate Pending Sales Trends
Chart 3: Pending Bozeman Home Sales Trends

Also, as bubbles go, interest rates, financial patterns, political instability, and other housing market influencers can change on a daily basis, effecting Bozeman’s housing market.

It’s not clear if there exists a true “Bozeman real estate bubble,” at least not yet. And while it’s true all Bozeman real estate prices and demands are increasing, Bozeman’s home builders are vigorously responding to satisfy the demand for new homes and other types of real estate.

Unlike cities like Boulder, Colorado, where the area of in-city growth is limited in all directions, and the price of land, if you can find it, is astronomical, Bozeman’s area of growth is primarily to the northwest, outside the city (for now) toward Belgrade, MT.

This area, NW of Bozeman, outside city limits and in Gallatin County, contains large tracts of farmland, which, more than likely, will be all residential: consumed by future Bozeman growth.

Prices for this land, though increasing in value as the city moves NW, remain fairly reasonable. Gallatin County land-use laws are still reasonable compared to Bozeman and especially compared to Bend, Oregon’s strict land-use laws, designed to protect green space and farmland.

One way to investigate if a Bozeman housing bubble” is imminent is to call me at 406.579.9683.

Previous Year’s Bozeman Price Trends and Sales Predictions 2008 – 2019

Median Bozeman Home Sales Price by Property Type
Chart 4 – Median Home-Condo-Townhome Sales Price by Property Type

In 2019, the SW Montana real estate market was robust and with low inventory in the mid-price range. Bozeman’s luxury real estate sales were sluggish.

From 2012 to 2019, prices for Bozeman homes increased over 60%. The Bozeman real estate market trend for single-family, residential homes moved consistently, and increasing Bozeman home values followed that trend.

Inside the Bozeman city limits median single-family home sale prices began 2019 at $429,000 and rose to $460,000 by January 2020.

Comparing Bozeman residential median prices January 2019 to November 2019, we found a ~$31,000 increase in Bozeman’s intracity median home price.

In 2019, outside Bozeman’s city limits median single-family homes real estate prices were $517,000 in January, then rose about $39,000 to ~$556,000 in July 2019 (the year’s high) and only dropped ~$500 by the end of November 2019.

The median sales price increase inside the city from January 2018 to January 2019 was ~12% and ~13% outside the city, as well, but from January 2019 to June 2019, prices inside the city had increased only $10,000 but continued rising for the remainder of 2019.

Bozeman Average Home Sales Price by Property Type
Chart 5 – Bozeman Average Home-Condo-Townhome Sales Price by Property Type

Similar to 2019’s prediction, the 2018 Bozeman real estate forecast called for continued robust growth and construction, especially in the western portion of the City of Bozeman in and around the area of Bozeman’s new high school.

The median sales price increase inside the city from January 2018 to January 2019 was ~12% and ~13% outside the city, as well, but from January 2019 to June 2019, prices inside the city had increased only $10,000 but continued rising for the remainder of 2019.

As of the beginning of Q4 2018, according to the city of Bozeman Housing Report, the Building Division had approved 1281 permits.

From late 2018 into early 2019, median home prices remained flat and prices for Bozeman homes in 2019 were predicted to rise around 4.5% over 2018 prices.

From early 2017 to early fall 2017, sales of mid-range Bozeman residential homes, town houses and condos outstripped the housing supply. In 2017, the city approved 1276 building permits. 

Bozeman Real Estate Listings – Belgrade MT Real Estate Listings – Big Sky Real Estate Listings – Gallatin Gateway Montana Real Estate Listings – Livingston Montana Real Estate Listings – Manhattan MT Real Estate Listings – Three Forks Montana Real Estate Listings – Big Sky Real Estate Market Report

Average Percent of Last List Price By Year Built
Chart 6 – Average Percent of Last List Price By Year Built: Home-Condo-Townhome

In June 2016, Q1 and Q2 Bozeman homes and land inventory was declining and home sales continued increasing.

The top price for a Bozeman home sold in 2016 was $4,495,000.

In 2015, the Median Bozeman homes price was approximately $300,000. In early May 2015 we had a 75% increase in the number of Bozeman, Montana building permits issued as compared to May 2014.

Bozeman’s construction industry was very busy in 2015: there were over 250 single-family housing starts by May 2015. More than 60% of Montana’s total building permits issued in year 2015 were issued in Gallatin County.

In 2015, in Gallatin County, Montana, 1272 residential permits were granted. The highest price received for a Bozeman home in 2015 was $6,200,000.

Though inventory in late 2014 was lower than earlier in 2014, continued sales demand and fewer Bozeman, Montana homes listed for sale contributed to a relatively long run of price increases until late Summer 2014, after which prices began stabilizing.

Prices for Bozeman homes hit another all time high in August 2014. The inventory of Bozeman homes declined into October 2014. Then supply and demand levels indicated signs of price stabilization for luxury real estate, residential dwellings, condos, and townhouses.

Dollar Volume Closed Sales Bozeman Homes Price Range
Chart 7 – Dollar Volume of Closed Sales by Price Range

Late 2013: The Bozeman, MT market had been cooling off a bit in late 2013 as more Bozeman homes were available and demand declined. We saw prices move lower as a result. This trend was expected to continue into 2014, especially if the index fell into the Buyer’s zone. Recommendation was to watch for a persistent up-turn in Market Action to signal prices rising again.

In 2012, Bozeman home sales were booming, with the highest home prices in the Montana. The region was once again attracting investors, and those with a few extra dollars to spend on Bozeman Montana real estate from Montana’s oil business.

The artsy counter-culture community of Bozeman was a draw to many out of state people searching for a second home. Bozeman real estate values were increasing, and the region’s forecast was to increase the most for any area of the state, averaging a 2.9% increase by the end of 2012.

In 2011, Housing Predictor’s Montana rankings had four cities’ home values trending upward: Great Falls at a 2.9% increase, followed by Missoula, poised to rise 2.4%, Bozeman home values rising 2.0%, and Billings at a 1.6% increase in home prices.

Pertaining to Montana real estate prices for 2010, this housing forecaster had Montana real estate prices dropping from 2.5% to 3.6% across the four, aforementioned Montana cities.

Based on US housing data received during 2009, Housing Predictor published a top 25 US Housing Market ranking. Five Montana cities placed in the top 25 for 2009: Bozeman 14th, Billings 18th, Livingston 20th, Great Falls 22nd, and Missoula 25th.

In 2008, Housing Predictor Montana Rankings had five Montana cities in the US top 25 and two within the top 10 (you may recall that in January 2009, Billings ranked 3rd and Bozeman ranked 9th, placing both cities in the top 10 for US home values appreciation in 2009).

Taunya Fagan, 406.579.9683, for all your Bozeman home needs!

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