Bozeman Real Estate Market Prediction, 2022 – Want the 2023 Forecast?
Rampant inflation and soaring interest rates impacted Bozeman’s real estate market in 2022.
Looking Back: the 2022 real estate forecast for Bozeman called for a continuation of the tight Bozeman residential market: 1. On-going, but lower-paced, increase in residential prices 2. Continued growth in residential construction (increased supply of building lots in 2022). 3. Shortage of property 4. increased demand for property. 5. Up-tick in mortgage rates ⇑ 1.5%.
Bozeman Residential Real Estate = Homes, Condos & Townhomes – DOM = Days On Market
The U.S. real estate prediction for 2022 from NAR, the National Association of REALTORS®, was for the US residential real estate market, which CEO Lawrence Yun says, “has performed exceptionally well during the height of the pandemic,” to see a decline in sales and an increase in inventory.
What did the Bozeman, Montana housing market look like in 2022?
Chart 1: (These charts default to “every city” combined. Please manipulate as needed):
Actual: In Greater Bozeman, prices (homes, condos, townhouses) hit $740,000 by the beginning of Q2 2022 and $750,000 by the end of Q2 2022.
In January 2022 (Q1), the cost for residential was $663,325 inside the city and over $1M outside the city of Bozeman.
In Q2 2022, inside the city, we thought we’d see residential prices (homes, condos, townhouses) rise to the low to mid-$600’s and hit the mid-$800,000’s for homes, condos, and townhomes outside Bozeman’s city limit.
Actual: In Q2 2022, the cost for residential was $699,950 inside the city and over $950,000 outside Bozeman.
2021’s real estate forecast for Bozeman included panic from the pandemic, which sent people fleeing from the urban to the suburban; this will continue into 2022, despite continued property shortages and rising costs.
Actual: Urban flight decreased somewhat, but Bozeman’s population continued to top historical trends.
Looking Back: Bozeman, Montana’s hottest real estate market in 2022
Bozeman’s 2022 real estate market will be hard-pressed to break 2021’s record, especially with mortgage rates bound to top 4% in 2022.
Actual: Median prices topped those of 2021. Mortgage rates topped 4%. Closed sales were significantly lower than 2021 and 2020.
Record low housing inventory in Bozeman: At the end of Q1, 2022, residential inventory was at record lows.
January 2022’s 123 residential listings was ⇓ 129 units less, or ⇓ 105% lower than January 2021’s 252. In 2022, more people were buying, not selling.
Chart 2: In January 2022, Median Days on Market (MDM) was 13 days in greater Bozeman and 3 inside Bozeman.
One year prior: January 2021: Inside Bozeman, MDM was 4 and outside city limits, MDM was 10.
And just like 202o’s building activity, construction of rental housing, businesses, retail stores, and such continued.
Visible road maintenance crews and the carving of new streets into what but 5 years ago were farms and ranches reveals the exponential growth of Bozeman.
Chart 3: January 2022: the number of residential properties for sale, (homes, condos, townhomes) began falling in mid-2020 for all of Bozeman and continued all the way through 2021, from a high of 399 listings (May 2020) to 123 listings in Q1 2022.
New listings numbers had been flat since June 2021.
Total residential for sale numbers flattened in mid-2021, but remained historically low all year.
The forecast was for our historic trend of fewer for sale signs and higher prices to continue through 2022.
Actual: This was the trend in 2022.
Covid’s continued impact and major cause of urban instability will continue to fuel Bozeman’s housing market.
Actual: Urban instability waned through 2022, causing the hot market to cool by year’s end.