Bozeman Montana Real Estate Information Archive

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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.

 

Montana's Economy Leads The Nation

by Hart Real Estate Solutions

How's Montana Real Estate Market? 

As we recover from the housing crisis, it's evident that Montana performed exceptionally well through the recession as compared to the rest of the country. National home prices finally broke-even with the pre-recession peak, but Montana already reached that milestone back in 2014. Montana's real estate prices are now about 10% above where they were before the housing bust.


 

Housing Price Growth.png


Before the recession, Montana's real estate prices were just under par with national averages. But when the housing bust hit, Montana had better resilience to price deflation than rest of the country. The housing bust wasn't nearly as harsh in Montana as other states. Since 2008, housing prices in Montana have stayed well above national averages.

Bozeman, in particular, had the most pronounced price growth of the state. Median sales price of single-family homes in Bozeman are now exceeding $350,000, higher than Montana's most populous cities.

How's Montana's Job Market?

The number of jobs in Montana are also growing at a considerable rate, with our manufacturing industry outperforming the national rate since 2010. From 2010 to 2012, Montana's manufacturing employment grew at an annual rate of 4% to 5%, while the nation's rate climbed by only 2% to 3%. 

Manufacturing Employment .pngEntrepreneurship in Montana

Much of the job growth can be attributed to a number of new establishments, rather than the growth of existing ones. Several of the largest contributors to Montana's rapid job growth through 2010 to 2015 were from fabricated metal products, beverage, and computer/electronic manufacturing. 

# of Establishments in Manufacturing Industry.png
Another achievement worth noting for Montana is the $4.6 billion Air Force contract won by S&K Technologies Inc., an enterprise headquartered on the Flathead Reservation in northwest Montana. While the enterprise has multiple offices in the U.S. and Saudi Arabia, S&K returned more than $25 million in dividends to the Confederated Salish and Kootenai Tribes (CSKT). As shareholders of the company, the success of S&K makes a significant impact on more than 7,000 members of the Tribes.

The Bureau of Business and Economic Research at the University of Montana projected in a 2016 report that the high-tech and manufacturing companies would grow seven-times faster than Montana's overall economy. These sectors are expected to pay average annual salaries of $57,000—more than double the median wage in Montana.


Montana's Economic Outlook

Overall, Montana's economic outlook is looking robust. Housing prices are climbing, high-tech companies are growing, and more high-paying jobs are becoming available. Montana's real estate market and the high-tech sector will be two things to keep track of in 2017.


See More:

Gallatin County Leads Montana's Economy

 

Bozeman Airport Expands For Explosive Traffic Growth

 

Mid-Rise Buildings To Doom Bozeman's Small-Town Charm?

 

Gallatin County Leads Montana's Economy

by Hart Real Estate Solutions

Gallatin County had remarkable performance in Montana's economy, leading the state in wage growth last year. While it experienced a slight drop in wage growth from 2015 to 2016, the county seems to be in much better shape than the rest of the state. 


Gallatin County's total wage income increased by a staggering $73 million in the first half of 2016 from the preceding year. Yellowstone County, the state's largest, lead the state for the first half of 2015, before Gallatin County took its place in the second half. By 2016, Yellowstone County suffered an abrupt slowdown, while Gallatin County lead the state by nearly $40 million ahead of the runner-up, Flathead County. 

Montana Economic Report


In 2016, almost every county in Montana had slower growth. The Bureau of Business and Economic Research credited this fact to the substantial increases in Medicaid not carried over to 2016, causing health care wages to drop across the entire state. However, there were unique cases for each region. 

Yellowstone County's severe economic slowdown in 2016 was mainly caused by the continued oil slump that devastated Billings' oil producers and energy services. This caused a ripple effect that lowered construction wages and weakened its real estate market. 

Butte (Silver Bow County) was another region that experienced a major loss. Although the county's visitor spending increased, a drop in copper prices profoundly impacted mining wages, which declined 28%.     

While most of Montana suffered an economic downturn, Gallatin County's performance remains the strongest in the state.

Gallatin County's wage growth in 2016 nearly doubled Montana's next best county.

 

Much of Gallatin County's slight drop in wage growth from 2015 to 2016 was due to rising housing prices, and strain on its transportation infrastructure. Gallatin County's median home price broke the $300,000 threshold in 2016, higher than the rest of Montana's most populated counties. However, construction, high-tech companies, and tourism continue to drive our county's prosperous growth.  

November 2016 Market Report

by Hart Real Estate Solutions
 

The 2016 residential market in Bozeman and Belgrade has been highly active from October to November, compared to last year. Between these two cities, 317 single family homes closed, up from 284 in 2015. The median sales price, has also increased from $295,000 to $323,000. The total sales volume of $123,751,980 for this time period increased from last year’s total of $112,737,420. The seller’s market continues, with low inventory and high buyer demand. 

Here are the statistics for October and November, 2016 and 2015:

Residential Sales-Units:

October to November 2015: 284

October to November 2016: 317

Residential Sales--Median Sales Price

October to November 2015: $295,000

October to November 2016: $323,000    

Residential Sales- Total Sales Volume

October to November 2015: $112,737,420

October to November 2016: $123,751,980

Gallatin County Multi-Family Home Sales: May Real Estate Market Report

by Hart Real Estate Solutions

This month, we will compare condo and townhome sales in the Gallatin County for Quarter 1 of 2016 to condo and townhome sales in Q1 2015. Here are a few stats:

  • Multi-family home sales increased by 15.83% (120 sold in 2015, 139 sold in 2016)
  • Dollar Volume increased by 5.96% ($33,245,180 in Quarter 1, 2015; $35,227,688 in Quarter 1, 2016)
  • Median sale price increased by 12.89% ($194,000 in 2015, $219,000 in 2016)
  • Multi-family homes spent 44.62% longer time on the market in 2016 (65 Days on market 2015, 94 Days on market in 2016)

Summary: Multi-family home sales continue to increase. As more multi-family properties sell, they are also selling at higher prices. The trend suggests that multi-family homes will continue to see value appreciation in 2016. It should be noted that they have spent more time on the market in exchange for higher listing prices. Feel free to look at Q1 2015 numbers compared to Q1 2014 to see an even bigger picture. The Gallatin County real estate market continues to grow and values continue to rise.

Gallatin Valley Single Family Home Sales Through February 2016

by Hart Real Estate Solutions

This month, we will compare the first two months of single family home sales in 2015 to the first two months in 2016. Here are some statistics:

  • Total home sales decreased by 15.98% in January and February this year. (253 sold in Quarter 1 of 2015, 169 through February 2015. 142 sold through February 2016.)
  • Total dollar volume decreased by 6.90% in January and February this year. ($104,984,245 in Quarter 1 of 2015, $69,989,501 through February 2015. $65,158,535 through February 2016.)
  • Homes have spent 13.91% less time on the market this year. (115 days on the market in Quarter 1 of 2015, 99 days on the market in 2016.)

HOWEVER, its important to note that as of 2/29/16, 286 single family homes were under contract in 2016, representing $135,862,319 in dollar volume. (To put this in perspective, Quarter 1 last year had $104,984,245 in dollar volume for all 3 months). Those figures do not contribute to 2016 totals until those homes have closed.

Summary – It was a sleepy start to the Gallatin Valley real estate market in 2016. January and February saw home sales and dollar volume decrease compared to 2015. However, a huge number of pending home sales have still yet to be added in, suggesting that March numbers will be extremely high. Although the above numbers would not suggest it, Quarter 1 of 2016 is on track to outpace the first quarter of 2015.

Cheaper For Sale/For Rent Properties To Improve Affordability in Bozeman

by Hart Real Estate Solutions

Over the past few months, the City of Bozeman and local builders alike have worked hard to continue making homes more affordable in Bozeman.

For Rent

Bozeman has partnered with developers GMD Development from Seattle and Homeward out of Missoula. Together, they are building a 136 unit for rent, affordable apartment complex. Bozeman helped fund $200,000 for the project using the workforce housing levy.

The complex will be made for residents who earn 60% or less of Bozeman’s median income. Rents will range from $560 to $940 a month. The units will be subject to a rental control clause that will keep rents at the same or very near to the rates seen today. The clause will be in effect for 46 years.

According to Bozeman’s local HRDC, rental or mortgage costs should only take up 30 to 40 percent of a person’s income. In Bozeman, most residents pay around 50% of their income to rent or mortgage payments.

For Sale

Four new properties have been approved on Cottonwood Road for sale to lower income residents. The new homes will be approximately 840 square feet and cost about $200,000.

Bozeman passed new home affordability ordinances in November 2015 to incentivize builders in Bozeman to construct more affordable homes. The city has required that 14 affordable homes are built by September 2016, that 27 are built by July 2017 and that 54 are built by December 2017. If not, the city will enforce mandatory inclusionary zoning ordinances to make homes more affordable.

This project would contribute 4 new homes to that number. The city would prefer to continue offering incentives and relaxed codes to build affordable homes, rather than force another rule on the building industry. Normally, the city requires homes be built on lots of at least 5,000 square feet. Under this program, builders can lower lot sizes to 4,500 square feet. Bozeman also expedites affordable homes through the building permit process, saving developers who make affordable homes time and money.

The median price for a single family home in the Gallatin County was $330,000 in 2015.  If a person wanted to only have 30% of their income go to their mortgage payment, they would need to make around $70,000 a year.

 

Sources: http://www.kbzk.com/story/30861473/affordable-housing-options-in-bozeman-to-expand-with-new-development

http://www.abcfoxmontana.com/story/30858148/bozeman-set-for-136-new-affordable-housing-units

http://www.nbcmontana.com/news/Construction-begins-on-affordable-homes-in-Bozeman/37972184

http://www.bozemandailychronicle.com/news/city/first-houses-approved-under-new-bozeman-affordabilty-plan/article_6070f54e-b9fe-5c76-8c50-ddcbc58fab81.html

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.

 

Source: http://www.bozemandailychronicle.com/news/city/consultants-to-evaluate-bozeman-s-historic-preservation-regulations/article_e448c583-d28b-5985-9626-a458922612f0.html

 

Gallatin County Market Update - February (Year Long Numbers)

by Tim Hart

This month, we will highlight single-family residence sales comparisons of 2012, 2013 and 2014 in the Gallatin County. Here are a few stats for Gallatin County single family homes that I found eye opening:

  • Unit sales increased from 2012 to 2013 by 17.80% (1,079 sold in 2012, 1,271 sold in 2013)
  • Unit sales increased from 2013 to 2014 by 9.52% (1,271 sold in 2013, 1,392 sold in 2014)
  • Unit sales increased from 2012 to 2014 by 29.01%
  • Dollar volume increased from 2012 to 2013 by 27.97% ($362,263,178 sold in 2012, $463,579,851 sold in 2013)
  • Dollar volume increased from 2013 to 2014 by 31.40% ($463,579,851 sold in 2013, $609,153,302 sold in 2014)
  • Dollar volume increased from 2012 to 2014 by 68.15%
  • Average sales price rose from 2012 to 2013 by 8.64% ($335,739 in 2012, $364,736 in 2013)
  • Average sales price rose from 2013 to 2014 by 19.98% ($364,736 in 2013, $437,610 in 2014)
  • Average sales price rose from 2012 to 2014 by 30.34%

Summary –The Gallatin County has seen growth in unit sales, dollar volume and average sale price. With more unit sales going at higher prices, the county’s market is growing quickly. Increased sale prices should peak any seller’s interest.

 

 

New Construction Hits Six Year High

by Tim Hart

The annual sale rate for new, single-family residences rose to a six year high, thanks to solid real estate sales in September. Sales increased 0.2% and adjusted the annual rate to 467,000 new units sold in 2014. The annual rate has not been that high since July of 2008. The rate had a chance to be even higher, but August real estate sales were also revised from 504,000 units down to 466,000, lowering the average.

Compared to September of 2013, sales of new single-family homes went up seventeen percent. Now, coupled with the 30 year fixed rate mortgage falling to its lowest level since June 2013, many experts expect to see the rate get even higher by the end of the year. Slow wage growth continues to hold back the housing market a little bit, but even previously owned single-family homes found their highest sales for 2014 in September as well. At the current sales pace, it would take 5.3 months to clear the supply of new real estate built in September. In general, a six month supply is considered an ideal balance between supply and demand, implying volatility still exists in the current market.

But, as builders’ and developers' confidence continue to grow, they will continue buying more land and building more houses. A lot of times that can lead to lower prices for new home buyers. Compared to September 2013, the median new home price in September 2014 fell 4 percent, down to 259,000 dollars. Now may be the time for buyers looking for a new home to take advantage of real estate competition to find a great deal on a brand new home.

 

Source: http://www.cnbc.com/id/102118682

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