Real Estate Information Archive


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Home Buyer Demand Rising In Real Estate Housing Market

by Tim Hart

Home buyers may soon look like the picture above, as they wait to see that perfect home listing. Ok, maybe not to that degree, but of late, buyers have been lining up to get their chance in the US housing market.

Buyer demand has increased over March and into April across the United States due to low mortgage rates and more, new constructions start-ups adding cheaper inventory to the market.

Mortgage applications rose in the week ending April 4th for the 3rd consecutive week. Applications rose by 7% week over week and were up 12% from the same week in 2014. Mortgage applications are the best barometer for homebuyer demand, so seeing an increase in applications is always positive.

Applications rose by 17% from March compared to February as well. Most attribute the rise in mortgage activity to be due in part to the low mortgage rates seen recently (3.66% for a 30 year fixed-rate mortgage).

Buyer demand has also increased for new construction. Many buyers have opted to wait for a new home, rather than competing with other buyers on an existing home. New construction homes sales have gone up recently because they have found a price point that is appealing for many buyers.




Mortgage Rates Drop in Early April

by Tim Hart

Averaged Mortgaged rates dropped again last week, wonderful news for homebuyers across the United States.

The rates fell because the US employment report fell short of expected totals, adding only 126,000 new jobs in March compared to the hoped for figure of 247,000. Montana may be getting the benefit of both low mortgage rates and low unemployment numbers, making many local buyers more than eligible.

The 30 year fixed mortgage hit 3.66 percent, dropping from last week’s 3.7 percent no longer flirting with 4% as it had in March.

15 year fixed-rate mortgages averaged 2.83%, down from 2.92% last week.

Over the last year, when rates have stayed below 4 percent, mortgage activity has been very high. So long as rates do not increase, mortgage activity is expected to stay true, but in all likelihood grow.

The Gallatin County has seen rising home values of late, making the debate between renting and buying in the Bozeman area a little more grey, but if mortgage rates rise, those who now may be able to afford a home, might not be able to in the future. If renting and buying are financially similar, it would be beneficial to consider homeownership.




Buying Cheaper than Renting Across Most of United States

by Tim Hart

A new study released by RealtyTrac suggests that in most places across the United States, renters are better off buying a home than paying to rent a home. In fact, in 76% of US counties, buying has become more affordable than renting a home.

Currently, the average price of rent on a 3-bedroom property takes 28% of the average homebuyer’s median income. Rental prices have been rising of late due to the high demand across the nation.

With current low mortgage rates, a monthly payment on a median priced home—inclusive of a 10% down payment, property taxes, home insurance, and mortgage insurance—only took 24% of the average homebuyer’s median income. Basically, if a buyer can afford the down payment, there is very little positive to renting over buying in most US markets.

The Gallatin County and Bozeman may still offer advantages for renting, due to the rising home values of both single-family and multi-family properties in the area and high demand from out of town buyers. Home values have gone up nationally, but Bozeman has been outpacing national home value growth by a good margin.

Bozeman’s high demand as a top mid sized town in the US has continued to grow, leading to higher home values. Both Bozeman and its builders are working on solutions to make homes in Bozeman more affordable—both to rent and buy. General growth may not be the sole solution, as building permit applications and approvals have seen high numbers in the past years, but rental rates and home values have not fallen.

However, any financial advantage to renting in Bozeman has become razor thin due to the rising rental market and lack of spaces for rent.

Bozeman has seen higher rental prices due to its proximity to MSU. MSU enrollment hit an all time high this year, increasing demand for properties near campus. Not many college age students can afford to buy a home, raising rental rates in the area. Bozeman Public School enrollment has also increased, showing general buyer interest in Bozeman, helping keep prices high.

Many renters have had to look to Belgrade and other surrounding areas to find affordable rental prices.

Still, in general, for any renters who have saved any form of down payment, whether in Bozeman or the United States in general, now is certainly the time to consider home ownership and turn a never improving rental situation into an improvable, equity building investment.




Bozeman to Reconsider Historic District Regulations?

by Tim Hart

The City of Bozeman will pay $60,000 for an in depth study reviewing the effects of its Historic Conservation Overlay District on the local real estate market. There will be a meeting at 6 pm on Tuesday in City Hall to discuss Bozeman’s next steps.

The Historic Conservation Overlay district is in the heart of Bozeman and is designed to protect old historic structures that contribute to Bozeman’s look and culture. The district encompasses 3,000 properties in Bozeman.

If any of these 3,000 properties want to adjust, renovate or change the exterior appearance of their home, city planning needs to review and approve the changes. On average, the city deals with around 300 applicants a year.

The Overlay District was first enacted when 3 historic homes were demolished for a now closed Pizza Hut on Babcock Street. Since its enactment, the district has succeeded to preserve the historic character of Bozeman. Bozeman recently was honored as a top 100 location in the US for livability--and the city's character certainly affected that rating.

Now, Bozeman has grown concerned that they are over impacting home affordability in town. Each new application for approval takes time and money, not just from the property owner, but from the city as well, and therefore the taxpayers. The city and builders alike have tried to find alternatives to help lower home values in Bozeman. The district has also become a highly sought after location in town and the district has seen property values rise. Those values could also be rubbing off on nearby neighborhoods and even affecting all of Bozeman’s affordability.

Bozeman would like to find out whether this is the case or not. The study will make its final presentation to City Commissioners in September.




I read a wonderful editorial written by the Bozeman Daily Chronicle that discusses Bozeman’s overall health and how that connects into the city’s cultural and economic growth. The writer draws some positive conclusions between the amount of public trails available in the area and the city’s overall health.

According to a University of Wisconsin, the Gallatin County was the healthiest county in the state for the sixth year running. In another recent study, Headwaters Economics concluded that well developed trail systems highly impact a number of quality of life issues in any town, both economic and societal. Could they be related? The writer says yes, of course, and highlights that trails can provide a lot more to a town than just physical health.

Trails are considered a “high amenity asset” that benefits businesses, increases property values in the nearby area and promotes overall public health, according to the Headwaters Economics report. The Gallatin County leads the state in low unemployment, Bozeman’s technology industry continues to attract more and more workers to Bozeman, while single-family and multi-family properties alike have seen their values increase rapidly in the last year as well. These facts suggest that the study may not be too far off from reality.

Headwaters Economics has also released figures highlighting the Gallatin County’s economic and popular growth and have also suggested this might be linked to the high amount of public land in the area. Their reports fall in line with the author’s opinion, that the local trails around Bozeman have directly helped lead to the town’s continued growth and prosperity. For the writer, the trails are necessary—not a luxury—and the writer pointed to the 15 million dollar open space and trails bond that was passed in 2012 as evidence that most Bozemanites think similarly.

From a real estate perspective, having nearby activities within walking distance of any home can really add value to that home. When the activity is nature based, healthy, and of course, free, it can attract buyers who may not have looked in a certain neighborhood or street otherwise. Bozeman continues to be a very healthy, positive environment, so it is no surprise that people want to move to Bozeman.  The writer of the article concludes that one of Bozeman’s greatest assets is that people want to move to Bozeman, they don’t have to move to Bozeman. So long as Bozeman remains a “want” place and not a “have to” place, we should expect to continue seeing the growth and prosperity it has enjoyed in recent years.




2015 May Bring Millennials to Home Buying Table

by Tim Hart

Realtor Magazine believes that this year will be the year when millennials, or Generation Y buyers, come out of the weeds and take a seat at the housing market table. The magazine has pointed to rising rent prices, a strengthening job market, and the impending Federal Reserve decision to raise interest rates.

Last year, the number of first time homebuyer purchases sank to its lowest level in 30 years. However, millennials comprised 32% of the U.S. housing market, suggesting they have not been shifting into home ownership as expected. Many experts have pointed to 2015 as the year that trend shifts.

Rent prices have driven or are expected to drive many millennials to purchase a home. Whether locally or nationally, vacancy rates have been extremely low, leading to high prices. Many people have complained about getting priced out of the city they call home. In the United States, leasing costs have risen every quarter since 2010. In the 4th Quarter of 2015, apartment rents in the US increased by 4.6 percent.

The job market has continued to strengthen. Wages and employment totals have been rising over the past year and for those aged 25-34, unemployment fell to 5.4 percent. In Gallatin County, unemployment numbers are even lower. In October of 2009, millennial unemployment was at 10.6 percent.

The Federal Reserve continues to hint at an impending hike to interest rates, so many millenials are expected to get a home under contract before they see mortgage rates increase. Currently, mortgage rates are still below 4 percent.

Finally and a bit obviously, millennials are getting older each year. Each year that passes gives a millennial more time to potentially save the needed money for a home purchase. Financing had been the major factor holding back millenials from a home purchase in 2014.

Whether or not millennials become major players on the housing front is yet to be seen. However, the climate seems right to push the next generation of homebuyers into the housing market.

To read about how each generation falls into the home buyer profile, click here.




Tim's Know Your Homes 101 - Spanish Mission Revival

by Tim Hart

Spanish style homes are very distinct in their style and feel. Perhaps the most famous style of Spanish architecture in the United States is the Mission Revival. If your mind jumped to Mission tortilla chips, rather than Mission Revival, you are actually a lot closer to correct than you might have thought. The hanging bell through an arched opening is one of the calling cards of Mission Revival architecture--hence the chip's name. 


The Mission Revival style roots back to imperial Spain, when missionaries built churches across North and South America. These older, public structures were known for their breathtaking interiors with enclosed courtyard, arched entryways, and prominent bell towers as seen in the image below. However, builders and architects who revived the style for residential homes showcased the exterior components that make Spanish architecture stand out.


Residential Mission Revivals in the US are unique for their clay roof tiles, most often in red. The high, white stucco walls help the roof stand out even more. If the walls aren’t white, then the exterior walls are most commonly colored in a tan or burnt orange.


This month, we will compare single-family residence sales for Quarter 1 in the Gallatin County between 2014 and 2015. The 2015 numbers reflect sales through 2/28/15. Since Quarter 1 of 2015 has not ended, I have adjusted quarterly numbers in 2015 by adding a month of projected home sales.

Here are a few stats for all of Gallatin County single-family homes:

  • Unit sales decreased in the first quarter by 2.92% (211 sold in 2014, 137 in 2015, adjusted quarterly rate of 205)
  • Dollar volume decreased in the first quarter by 2.48% ($87,394,684 in 2014, $56,812,622 in 2015, adjusted quarterly rate of $85,227,460
  • Median sale price in the first quarter increased by 11.08% ($289,000 in 2014, $325,000 in 2015)

Summary – Numbers for the month of March are projected numbers. Although January and February sales were slightly lower than those seen in 2014, March may greatly impact the overall market health of the quarter. Based on these projected numbers, the market saw a slight setback but continues to stay on pace with high sales seen in 2014. Median sale prices continue to rise, showing that home values in the Gallatin County are up and trending upwards. As of now, 2015 looks to be in line with numbers seen in 2014.

The Gallatin County and southwest Montana, along with a few select regions in the state, have helped raise the average wage for the state and lower unemployment numbers.

The Bozeman Daily Chronicle analyzed numbers released by the Montana Department of Labor and Industry and split the state into its major regions.

The Billings region, lead Montana with an average wage of $40,733 in 2013. Southwestern Montana came in just behind that with an average wage of $39,698. In Gallatin County, 66% of its residents earned their income through a wage or salary disbursement.

Despite the Gallatin County leading the state in economic growth, the average wage still came in second to the Billings region. Perhaps the slightly lower wages reflect the consequences of being a major tourist hub for the state. In an area with high tourism, many retail and service industry jobs that pay minimum or close to minimum wage will find greater success. The minimum wage was raised from $7.90 an hour to $8.05 an hour across the state at the beginning of 2015.

The highest earners in the state were physicians and surgeons at $243,000 per year. The lowest average wage came from gaming dealers—at $18,150 a year.

Montana and the Gallatin County both had unemployment rates below national averages. The seasonally adjusted unemployment rate in the United States currently sits at 5.7 percent. Currently, 4.4% of Montanans are unemployed. In Gallatin County, only 3.6% of people are unemployed.






Classifying the 2015 Home Buyer

by Tim Hart

What drives homebuyers in 2015? Where are they coming from and where do they want to go? And as I’m sure you are asking yourself right now, why does any of this even matter so long as my house sells?

Well, any home seller who understands what type of buyer he/she will ultimately sell their home to, can then fix and adjust the home to make it appeal to the highest amount of buyers, raising its market demand.

The National Association of Realtors recently released their Home Buyer and Seller Generational Trend report, outlining, among many other topics, the general outlook of United States homebuyers.

Generation Y, those aged 35 and under comprise the largest share of home buyers at 32 percent, more than all baby boomers combined. Their average income is $76,900 a year. It should be noted that the median age for these home buyers was 29, meaning that those home buyers are generally closer to 35 than to 18 when they are ready to make a purchase. Sixty nine percent of Generation Y buyers are first time buyers and 39% of them were driven to purchase a home for the desire to finally own their own home. For buyers aged 33 and under, 59% of them are purchasing a home to leave a rental situation.

Generation X, those aged 35-49, comprise 27% of homebuyers in the United States. On average, they make $104,600 a year. Generation X buyers, in general, are shopping for more than just themselves. Generation X buyers are usually shopping for families. As the presence of children in the home peaks for a buyer aged 35-49, homes aiming to sell to Generation X’s will need to be child friendly, with additional bedrooms and possibly a bonus room.

As age increases, homebuyers are far more likely to already be homeowners. Below age 33, homebuyers are generally leaving a rental situation. For homebuyers over 50, more than half owned their previous residence. Whether that means they are buying a second home, are downsizing or have other reasons to move, these buyers will generally be more seasoned, discerning and will expect more from their home.

Young boomers or people aged 50 – 59, comprise 15% of the buyer’s market. They are likely to move for job relocation or to downsize their home. Younger boomers make an average of 96.6 k per, the first age group where median income goes down from the previous generation as oppose to up.

Older boomers, people aged 60 to 68, move for retirement or to be closer to friends and family. As age increases, the rate of owning more than one home also increases.

If you have considered selling your home in the past, you may not have considered this question: What type of buyer will my home more than likely sell to and how can I make it even more attractive to that person? Once you have found that answer, you are well on your way to listing a highly sought after home.



Displaying blog entries 1-10 of 376