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At Home in Bozeman Real Estate Blog

Tim Hart


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YMCA Moving Forward with 5.5 Million Center

by Tim Hart

The Gallatin YMCA will move forward with their plans to construct a 5.5 million dollar athletic facility just north of Gallatin Regional Park in Bozeman. According to preliminary plans, the building would be 24,000 square feet and would include weight and cardio centers, locker rooms, a community program area and administrative space.

The 7-acre site was purchased by the YMCA, thanks to a large donation in 2008. However, after the recession tightened up funding, the project has been on the back burner ever since.

Recently, the YMCA restarted their attempts to get the facility running. They have been requesting donations from the community and so far, have raised 2.5 million for the first phase of the project.  In summer 2014, to lighten their load, they paired with the City of Bozeman to build a new aquatics center. But once the bond approving a new law and justice center fell through, the aquatic center moved down on the city’s priorities.

The YMCA serves 5,800 kids annually. That number has grown by 540% since 2010. Bozeman continues to attract new families, looking to raise their children in a positive environment. The YMCA’s recent growth helps support that claim.

As Bozeman continues to grow and continues to stay such a family friendly environment, residents should expect more, similar projects to better address their family needs in the future.




Townhouse Construction Up in 2014

by Tim Hart

Townhouse construction has been taking a larger share of new construction start ups in the real estate world. In 2014, townhouse start ups totaled 19,000 in the fourth quarter which was 12% higher than in 2013.

Townhouse construction totals for 2014 hit 72,000, up from 68,000 last year. Builders have been building more townhomes due to the current buyer demand and buyer reliability. As home prices have risen, more buyers have had to look at multi family and attached single family options. In Bozeman and the Gallatin Valley in particular, townhome prices have surged in the last few years. (To read a 2014 market report on townhomes in the Gallatin County, click here.) The lack of rentals has also pushed many renters into the home buying search both locally and nationally.

Townhomes now take 12% of all single-family housing starts. That is their largest share of the housing market since 2012.




97% of Montana Borrowers Have Equity in their Home

by Tim Hart

If Montana already didn’t have enough positive trends for their housing market, more good news came from Realtor Magazine in mid March. The magazine released which states had the highest percentage of borrowers with positive equity in their home—and Montana ranked 3rd, at 97 percent. The magazine analyzed any property with an active mortgage in the United States to reach their numbers. Montana and the Gallatin County rebounded comparatively well from the housing crisis compared to many of the other states in the nation, but seeing how many borrowers in the state have equity in their home really cements that fact.

In the United States, 89% of homes ended 2014 with equity in their home—a great sign for the national housing market. 44.5 million homes had equity and if home prices rise by 5% another 1 million will no longer have negative equity.

Interestingly, home sale values greatly affected whether buyers have been sinking or swimming across the nation. For properties valued over $200,000, 94% of them had positive equity. For properties valued below $200,000, only 84% had equity.

5.4 million home owners are still underwater from the housing crash. The issue of negative equity continues to hold back the potential of the market but negative equity is expected to diminish in 2015. For Montana, the local market has been able to grow so much partly due to the financial freedom of buyers and sellers in the area.

Nevada had the highest percentage of home owners still with negative equity, at 24.2 percent.




Home Buyers Paid Larger Down Payments in 2014

by Tim Hart

The average home buyer had more capital to put down on a home in 2014, according to an analysis of nearly 20 million home sales. The average down payment made by home buyers in the United States was $58,496. On average, buyers were able to put down 15.4% of the purchase price. Having buyers across the country with more money to put down in 2014 shows the positive turn both the economy and housing market have taken in the past few years.

The average down payment has been between 13 and 15% over the past decade and only 2013 and 2014 have risen above that standard.  

Only a quarter of home buyers with conventional loans put down less than 3% on their home. That same number was nearly at 37% in 2006, just before the housing crisis. Most of the buyers putting little money down in 2014 were first time home buyers.  The average sale price on homes receiving less than a 3% down payment was $190,304.

When buyers have more money to spend, that’s great news for everyone involved in the housing market. Buyers can manage their mortgage payments easier while sellers can sometimes get higher prices. Healthy activity from both sides will lead to a normalized growing market, shielding buyers and sellers from the pitfalls of a volatile market.




Builders Address Bozeman Home Affordability

by Tim Hart

Local Bozeman builders have tried to come up with viable solutions to the affordable housing scenario in Bozeman. Although more building permits have been issued in the last few years, many of these homes are aiming at prices above $300,000 (read some stats on 2014 single family residence homes here). As the Gallatin County has seen high economic prosperity, home prices have gone up as local buyers find themselves able to buy more expensive homes. However, several local builders have tried to come up with designs that would be both affordable and useful to future buyers.

One design has called for a 2 story economy home. The 2 bedroom, 2 bathroom home would be 1,336 square feet and would come with a garage. The home design would sell on average for around $220,000.

Another design would build 720 square foot dwellings with a single bedroom and a flex space area. For this design, the builders would be able to put multiple units on a single lot and the homes would sell for $198,000 each.

Unfortunately, current city set back requirements would need to be changed to make either option possible.  A set back is the space between the home and the lot edge. Current set backs are designed to allow adequate privacy to residents while providing access for repair vehicles and equipment.

The city commission has set a May deadline for builders to brainstorm potential solutions before they move forward on the Bozeman affordable housing issue. In late February, the city postponed a potential zoning change that would require builders to build homes at certain price points on some of their lots. The city has also tried to raise home inventory and looked into lowering impact fees to lower prices. Builders will also want to decide if the options are viable – based on buyer interest in these models. Without a consistent market of buyers, homebuilders would have to take on serious financial risk building these homes. 




Home Inventory Down in Early 2015

by Tim Hart

Home inventories have fallen in early 2015 as markets have struggled to find a balance between homes for sale and qualified buyers. Home inventory fell in January by 6.7% month over month and 8.7% year over year.

Although obvious on the surface, the major problem causing a lack of homes for sale is that sellers have yet to put their homes up for sale. Many home owners have watched their markets increase, with the expectation that their home will sell higher the longer they wait. In many cases this will be true. However, in markets like Bozeman, Montana, where there are many willing and able buyers waiting for the right home to come onto the market, a seller who puts up a home in a desirable neighborhood may actually receive multiple offers, allowing them to choose the highest bidder. If seller’s wait, they will inevitably find more competition as more people list their homes, driving the bargaining power back to buyers.

Prices will continue to rise as inventory remains low and so long as competition remains low.

Around the nation, high and rising home prices have kept many buyers from getting involved in real estate. Median home prices have been rising and the median home price in the US in January was $211,000. Bozeman has seen above median home prices for both single-family residences and town homes.

The average family in the US currently earns $63,900 annually. Overall, that family can afford 62.8% of homes. In the third quarter of 2014, that family could only afford 61.8% of homes, so affordability has improved. But as sellers continue to hold back potential inventory, rising prices may affect home affordability negatively.

Ideally, the market will normalize regarding home value growth and buyer affordability. Signs remain positive that the market is recovering but inventories will need to rise to continue the housing market growth.





Mortgages Rates Rising, Still Below 4 Percent In March

by Tim Hart

Mortgage rates in the United States have fluctuated over the last few weeks, but with a general upwards trend. Homebuyers will want to keep their eyes on the mortgage rates over the next few weeks to see if they continue to remain low. If they do not, home buyers may want to speak with lenders sooner as oppose to later, to lock in a more favorable loan.

30 year fixed rate mortgages returned to the start of year averages (to see January rates click here). A 30 year fixed rate mortgage gave a 3.86% interest rate in the week ending March 14th. The rate has risen from the 3.8% in late February. The rates had dropped in the first week of March to 3.75% but have now risen again. Although the rates are going up, they are all well below the 4.37% interest rate given in March of last year.

Since October, interest rates have not really risen above 4 percent, minus a couple of weeks. Coupled with the FHA lowering mortgage insurance rates, its no wonder buyers took out more mortgages in 2014 than years previous.

The 15 year fixed rate mortgage rate rose to 3.1% from 3.03% last week. In October 2014, 3.08% was the lowest the rate had fallen since 2013. Since then, it has remained pretty steady.

As mortgages rise, homebuyers will want to be aware that their buying power will be diminished. Of course, the rates are very low in general so there will still be mortgages available for most buyers. However, for buyers walking the line between buying and renting, the current low rates may be needed to get loan approval.




Indonesian Woman Lists Herself with Home

by Tim Hart

For home sellers who have seen their local markets heat up in 2015, they will be happy to know the heat is limited to houses only. In Indonesia, one homeowner, Wina Lia, is trying to spice up her home sale by adding an unexpected ingredient to the mix – herself. Lia has offered an opportunity for her hand in marriage to any Indonesian buyer who chooses not to negotiate on the listing price of $76,500.

Homebuyers who prefer hot home deals in a more traditional sense are allowed to make an offer on only the home. Buyers looking for love over shelter may be disappointed to find out the home purchase only gives them the chance to ask for her hand, but does not guarantee her acceptance.

The real estate agent, Dian Purna Dirgantara, crafted the idea when the homeowner admitted she was also looking for a husband at the time. Since he produced the advertisement, he has received endless calls from viable buyers and the curious alike. Whether Dirgantara’s strategy will be picked up by other agents and homeowners looking to make a home sale is yet to be seen.



More Mortgages Taken Out in 2014

by Tim Hart

According to Federal Reserve Bank of New York’s Household Debt and Credit Report, outstanding mortgage debt rose a good deal in 2014 and should continue to do the same in 2015. When the mortgage debt rises, it usually does not mean that people with mortgages are getting into worse debt or aren’t paying their bills. Instead, the numbers reflect the total number of people taking out mortgages across the United States. When people take out more mortgages, it shows they, and the economy alike, have seen more prosperity in recent years—the best sign for any market, housing or otherwise.

Total household debt rose by 306 billion or 2.7% from the 4th quarter of 2013 to the 4th quarter of 2014. At the end of 2014, Americans had 11.8 trillion dollars in outstanding household debt. After 4 straight years of decline from 2009 to 2012, 2014 marks the second consecutive year of growth.

Clearly, more buyers are coming to the negotiating table, whether they’ve seen rising wages, are tired of renting in high cost markets, or want to take advantage of low mortgage rates. Mortgage originators are expecting to see increased business in 2015, specifically from first time buyers who now feel within their capability to purchase a home.




Bozeman School District Enrollment Increases

by Tim Hart

The Bozeman School District will be adding 170 more students next year, highlighting Bozeman and the surrounding area’s continued growth. Last year, Bozeman schools had their highest enrollment ever and it looks like the record won’t make it through the calendar year.

In addition to the 170 new students, administrators will hire 11 more teachers to better educate the additional students. In order to make those hires, the 2015 legislature will need to pass the public schools bill in April. Luckily, the bill dealing with inflation costs has already passed.

Elementary and middle schools will increase by 167 students next year. That is a 3.8% increase from the 2014 to 2015 school year when 4,321 students were enrolled in elementary and middle schools. The high school only added 3 new students. From a real estate perspective, the enrollment totals suggests that Bozeman is still very much a family town—and new families looking to move here, tend to make that move early. With the nearby schools, public lands and outdoor activities, its easy to see why Bozeman would be a big draw for young families looking to live in Bozeman for an extended time.

As enrollment increases, Bozemanites may have concerns that the quality of the education may be diluted. However, this year suggests otherwise. Bozeman High School was honored for its students high Advanced Placement Exam scores and ACT scores. The high school was also awarded two grants for studies in mental health and mathematics. Longfellow, one of the local elementary schools, won a department of education honor as a Blue Ribbon School.

The Bozeman School District still remains the gold standard for schools in the area. It is no wonder that more and more families move to Bozeman to educate their children in such a positive learning environment.





Displaying blog entries 1-10 of 363