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On the Rise: Condos and Townhomes

by Hart Real Estate Solutions

If you drive past any part of Bozeman, you’ll more than likely find some sort of new housing development under construction. What may be surprising for some though is how many of these new developments are actually condos and townhomes, as opposed to traditional single-family detached homes. With both mortgage rates and gas prices having risen recently, some buyers (especially younger, prospective buyers) may feel a bit uncertain about what they’re able to afford. Luckily, condos and townhouses may be more attainable than they think.

Nationally, new townhouses account for 12.3% of all single-family housing starts according to the National Association of Home Builders (NAHB). Over the past 5 years, the number of new construction condos and townhomes for sale in Bozeman has fluctuated quite a bit, with the most recent dip in activity having taken place in March of 2017. Since then, the number of condos and townhomes for sale has been on the rise. In Belgrade, there has also been some fluctuation during this same time period, with new condos and townhomes for sale having also been on the rise since March of 2017, though not nearly as rapidly as Bozeman.

 

Condos and Townhouses for Sale in Bozeman & Belgrade, Jan. 2013 - Present

            

This data was pulled from the Big Sky Country MLS for 2018. While we attempt to provide reliable, useful information, we cannot guarantee that the information is accurate, current or suitable for any particular purpose. Estimates are subject to change without notice.

Similarly, the median sales price for condos and townhomes has also risen in recent years. As of April 2018, the median sales price for both condos and townhomes was $289,900, while in Belgrade this median sales price was $267,400. (Disclaimer: either of these numbers could be skewed toward the higher end of the spectrum by a higher-end listing on the market.) While this may still seem high to many, the median sales price of a single-family home in April 2018 was $396,250, while in Belgrade this median sales price was $310,000. (Again, either of these numbers could be skewed toward the higher end of the spectrum by a higher-end listing on the market.)  Based on these stats, choosing to purchase a condo or townhouse in Bozeman (as opposed to a single-family home) could save you up to $106,350, while choosing to purchase a condo or townhouse in Belgrade (as opposed to a single-family home) could save you up to $42,600.

Number of Condo/Townhouse Sales 2014 - Present

Robert Dietz, Chief Economist for NAHB, states that “future gains in the share as townhouses are a useful bridge from rentership to homeownership for younger prospective buyers in high cost markets…”. This is good news for millennials, as they represented 34% of all homebuyers across other generations in 2017. With condo and townhouse construction on the rise, we can continue to expect an increase in closed sales for these types of homes as we move further along into 2018, and even into 2019.

 

More Housing Coming to Both Bozeman and Belgrade

by Hart Real Estate Solutions

Bozeman Development

The longtime trailer park on North Willson Avenue may soon be transformed into a series of duplexes. Santa Clarita-based company, William Homes LLC, has filed plans to replace the trailers with 16 three-story duplexes, each designed to include 3 bedrooms and an apartment above the garage for future owners to rent out if they choose— all contained within 1,800 square feet.

William Homes, LLC has a portfolio that encompasses many different types of projects, ranging from $159,000 to $1,000,000, which includes everything from townhomes to gated luxury communities.

Although the details about price range and the transition process haven’t yet been announced, construction could start as early as this summer if the city approves the project. 

 

 

Belgrade Development

Plans for a 595-lot subdivision were discussed on Monday with the Belgrade City Council. The future proposed location for this new development sits on 153-acres of the former Prescott Ranch on Belgrade’s west side.

Some board members expressed concerns over non-existent streets that are currently reflected in the plans. The board wants all streets to connect through the subdivision as they are concerned with traffic pileups and proper traffic distribution, both of which are current problems in Belgrade. Another point of concern amongst the board were park sizes— the current plan reflects 5 parks spread out across the subdivision, each averaging 3 acres in size. The board suggested reducing this to either one or two larger parks.

Additionally, developers want to change the zoning from R-2 to R-3 in order to boost density and allow for multi-family housing. All input gathered at Monday’s meeting will be taken into account before developers submit a formal proposal to the city.

How Rising Home Prices & Growing Wages Relate to Desirability in Montana

by Hart Real Estate Solutions

Montana housing market prices are high, especially in Bozeman. In 2016, the median sale price for a single-family home in Bozeman was $359,250. Fast forward one year— the median sale price in Bozeman in 2017 was $380,750 (a 5.98% increase from the previous year).      

This data was pulled from the Big Sky Country MLS for 2018. While we attempt to provide reliable, useful information, we cannot guarantee that the information is accurate, current or suitable for any particular purpose. Estimates are subject to change without notice.

 

In terms of median home values, Bozeman ranked the highest when compared to both other large cities in the state and the United States as a whole.

 

Median Home Values 

Although wages in Montana remain lower than the U.S. average, they are growing faster than other areas across the country. In 2000, the average weekly wage in Montana was 69% of the U.S. level— by 2016, they had grown to 76% of the U.S. level. Quickly growing wages could be a contributing factor to the ever-increasing demand for housing in Montana (and Bozeman in particular), although the demand for quality of life is likely the largest reason for the high demand and rapidly growing population. While the median household income in Bozeman is currently $68,000 (keeping pace with the current median home price), this statistic doesn’t account for the quality of the housing that is available at this price.

Many of the people coming to Bozeman are not reliant on Montana’s economy for income. This group of people includes out-of-state residents who own a second home in Montana, telecommuters, and retirees. In 2010, the share of second homes in Montana was 8%, while the U.S. percentage was only 3.5%. Our state also attracts a large number of people who have the financial means to live wherever they choose—23% of Montana’s personal income comes from non-wage sources such as dividends and retirement. The U.S. level is only 19%. In Gallatin County, more than 40% of adjusted gross income comes from non-wage sources.

Because of the high quality of life in Montana, rising housing costs are partially related to the state’s desirability to those whose income isn’t related to Montana’s economy, which means that wage increases may not be as tied to housing cost increases as we previously thought.

With Bozeman’s population expected to hit 50,000 by the 2020 census, wages growing relatively quickly, and home prices continually on the rise, when will our local market start to become more balanced? With new construction expected to rise as we move closer to that 50,000 mark and potential inventory growth predicted countrywide by the fall, we may be moving closer to both a more balanced market and more affordable housing than we think. 

Bozeman Yellowstone International Airport Prepares for More Traffic

by Hart Real Estate Solutions

Home prices are rising, the population is growing, and our overall economy is expanding— which means that our airport is also seeing an increase in traffic. In 2017, the Bozeman Yellowstone International Airport (BZN) handled just shy of 1.2 million passengers, and now accounts for 30% of all airline traffic in and out of Montana. With an 8.3% increase in traffic from 2016, this is the 8th consecutive year of record breaking passenger traffic for BZN.

BZN is the busiest airport in the state, and the 8th busiest in the Northwest Region of the country (region including Montana, Wyoming, Idaho, Utah, Colorado, Oregon and Washington). With passenger levels currently predicted to be 10% higher this summer than previous years, several upgrades and expansions are scheduled to take place within the next few years to accommodate the ever-increasing growth.

  • The Largest Parking Garage in Montana

Originally on the airport’s to-do list for 2021, the construction of a 4-story, 1,100 stall parking garage began in December and is now scheduled to be completed by June. The garage (which is estimated to cost $30 million) will contain long-term, short-term, and rental car parking.

  • New Terminal Additions

Though not to be completed for several years, a terminal expansion will begin this summer, once the parking garage is complete. The expansion will include three new gates and the ability to handle the inevitable increase in more baggage.

  • Main Runway Maintenance

Runway maintenance is required every 15 years. This spring, the main runway is scheduled to close for three weeks to complete maintenance. Between April 30th and May 19th, no flights will operate between 12:30pm and 11:00pm. This project will cost the airport an estimated $7 million, although if the airport were to entirely close during this time, it would cost the airport an additional $2 million/day. Other runways will still operate during this three-week period, and the main runway will operate outside of the 12:30 pm to 11:00pm time frame.

  • The Addition of a Tower Controller

In order to better handle growing traffic, the airport will add one new tower controller and additional tower hours. With these new additions, tower coverage will span from 5:00am to 1:00am— the current hours of operation are 6:00am to midnight. The new controller will be fully trained and certified by this summer.

 

BZN serves as a year-round gateway to Yellowstone National Park, Big Sky Resort, and Montana State University. With airline traffic continually increasing every year, it only makes sense for our airport to keep pace as it continues to improve and expand its current facilities to better cater to the growing community. 


Belgrade Expands and Prepares for Future Growth

by Hart Real Estate Solutions

In 2010, Belgrade had around 7,389 residents; as of last year, that number has grown to 8,254— a 10.5% population increase in just six years, and probably even more now that we’re in the 3rd quarter of 2017. Many of these residents were priced out of the market when looking to purchase a home in Bozeman city limits.

In a report released by Prospera Business Network, the average price for a 2,400 square-foot home in Bozeman on an 8,000 square-foot lot was $367,241. In Belgrade, the average price for a single-family home is $291,382. At the beginning of the summer, the price was about $260,000.

What Preparations Are Being Made For This Growth?

Plans to improve downtown, alleviate the city’s transportation problems and buy more land to build additional schools are already underway.

The Belgrade City Council is creating a special tax district downtown, with its purpose being to produce a new revenue stream to finance this project (among other infrastructure upgrades), rather than asking residents to borrow the money. The council hopes that after improvements are made, new businesses will be attracted to the area. Here are the 5 areas downtown that need the most improvement:

  1. Poorly designed parking lots
  2. Unsafe conditions
  3. Deteriorating buildings
  4. Deteriorating infrastructure
  5. Defective street layouts

As far as starting to fix current traffic problems, the city of Belgrade is working with the Montana Department of Transportation. So far, a website has been developed to gather comments on road conditions from drivers, cyclists and pedestrians. All input will be taken into consideration when deciding where and how to begin solving this problem.

Belgrade High School set an enrollment record this year with 917 students, and the population for the whole school district this year is 3,406— 5% more than last year. The school district is now looking to purchase anywhere from 12 to 200 acres to build two possible new schools, while still having plenty of space for sports practices and games.

Most phases of these plans are expected to take between 6 and 7 years until completion. With Belgrade expanding so quickly, it only makes sense that the city council is already preparing not only for future growth, but the current population and its present needs.


Related Articles:

Bozeman Continues To Grow With New Proposed Airport Expansion

Record-breaking Research At MSU In 2017

New Short-Term Rental Rules Adopted In Bozeman City Limits

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