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Displaying blog entries 1-10 of 73

Bozeman's New "Midtown" Gets Started

by Hart Real Estate Solutions

Bozeman has gone forward with plans to input a new urban renewal district on the North 7th area to beautify and densify the district.

The area, now rebranded as Midtown or Midtown Bozeman, has struggled with its lack of connection to the other parts of Bozeman and it’s urban, box-store feel. The area grew during the 60’s and 70’s, and has a basis in automobile transportation. For this reason, most of North Seventh has strip-mall style commercial businesses.

In the proposed plan, the district would try to foster developments that attract both commercial and residential patrons, ideally in mixed-use buildings. Bozeman wants to create the district so it also can become a center of activity, adding new conference and event venues. Bozeman has already worked on upgrading the fiber-optic cables in Bozeman and this new project would add cable to the Midtown Bozeman area.

Commissioners will use a TIF (a tax increment finance district) to help beautify the area and make aesthetic improvements. By using a TIF, Bozemanites will not see their taxes increase unless they are within the district. Bozeman used TIF funds in 2015 to fund the expansion of one of its downtown elementary schools, Hawthorne.

A similar urban renewal plan was put in place for Bozeman’s downtown in 1995, a change that has been considered a huge success since its implementation.



New Bozeman Neighborhood: The Lakes at Valley West

by Tim Hart

The final plat of Valley West Subdivision’s final phase was approved on October 5th, allowing development to begin on Bozeman’s west side. The Lakes at Valley West, as the final phase is called, has been under formal review for the past year. Now with approval, it will bring approximately 60 homes and 2 lakes to the already thriving subdivision.

Valley West has been one of the fastest growing and most active subdivisions in Bozeman. The final phase will help provide amenities to the current neighborhood while also increasing home inventory in the Bozeman area.

Bozeman, like the United States overall, has dealt with rising values and a very competitive rental market. Across the nation, builders have been trying to increase home inventory to help alleviate rising home values. With both rental values reaching an all time high as well as rental vacancies reaching an all time low, increasing the number of homes available should help increase competition.

Bozeman has approved additional neighborhoods, apartment complexes and multi-use properties to try to increase local inventory. Bozeman has also looked into trimming lot sizes to make the home building process more affordable. Currently, commissioners have put an inclusionary zoning proposal on hold as well.




At the end of September, Bozeman and County Commissioners agreed to hire an architect to design the new law and justice center for the local area. The effort would be a shared joint effort between county and city governments, necessitated from the overall costs of such a project. Hiring an architect shows each government’s resolve to get the project approved and underway in Bozeman.

Both commissions approved unanimously to hire ThinkOne architects to submit building designs by the end of June 2016. Hiring an architect is just the first stage however, as the multi-million dollar construction bond that funds the project will be put up for voter approval in November of 2016.

Due to the high level of uncertainty in Bozeman’s construction market, ThinkOne Architects has been asked to submit 30% of the required design documents by the end of June, which will help calculate the building’s cost for the vote next fall.

Currently, Bozeman holds the honor of being Montana’s safest major town. With Bozeman’s recent growth and economic expansion, it will be important to maintain order moving forward. Having the correct infrastructure in place will allow Bozeman to stay on top of any potential crime and keep Bozeman’s reputation safe and flourishing.





How Lasers Affect Real Estate

by Tim Hart

This month, I wanted to highlight an investment Bozeman made in 1993 that now seems to have impacted Bozeman’s economic outlook for the better. We never know where our hard work might pay off down the line and how it might change Bozeman’s future.

I read a great article this month by the Bozeman Daily Chronicle about the growth of Optics Technology in Bozeman. The optics industry works with lasers, high tech cameras and other similar technologies to create better products, medicines etc.  In 1993, the first real investment into Optics Technology in Bozeman was made. Local companies, the State of Montana, MSU, and the National Science Foundation teamed up to raise 3 million in optics research in Bozeman. By 1995, MSU had its own Optics Technology Center.

Since then, MSU has had 15 spinoff companies come directly from their programs, whether through new technologies invented on campus or by students who trained at the University and began their own company. According to the Bozeman Chronicle, there are now 30 optics companies in Bozeman, employing some 500 people most of whom earn higher than Bozeman’s average wage. Without the investment made in 1993, it is hard to say whether any of the growth of Optics Technology would have been possible. It is much easier to say that the growth of these local companies have provided an economic boost to Bozeman.

But the best news continues to be that Bozeman has worked hard to reinvest back into the sciences and that similar breakthroughs might be possible in Bozeman’s future.

Both the state government and the National Science Foundation again have offered major grants to MSU for continued scientific development in the area.

The National Science Foundation awarded a 3 million dollar grant to expand the nanotechnology center at MSU. The grant will give MSU the ability to put all of their associated labs in one location. Currently MSU has 5 nanotechnology labs. The money will be distributed over 5 years will also provide funds to upgrade and buy new equipment.

On top of this, MSU received 4.6 million in grants from the State of Montana. In total, MSU scientists have won 8.9 million of the 12.9 million that has been offered this year, with only 2 million dollars left outstanding. MSU worked very hard to achieve the grants they received, putting in 150 of the 200 proposals reviewed by the state. The 4.6 million in grants will go to infectious disease research in both humans and ranch animals, mental health research, energy research and research to better recover metals from wastewater.

Continuing to win grants like these and continuing to pursue them with the veracity seen in 2015 will help keep Bozeman on the forefronts of technological advances. It seems pretty apparent that research like this can drive future economic prosperity. Economic prosperity will help drive more people to Bozeman. So although lasers and nanotechnology feel very far from real estate, they might be closer together than people might initially think.








Rural Mortgages Get Boost from CFPB

by Tim Hart

The Consumer Financial Protection Bureau, with changes to some current rules, will help buyers in rural areas get financed for home purchases. The CFPB made changes to its rules to increase the number of financial institutions that would be eligible to offer loans in rural areas. To do this, they broadened the definitions for lending as well as expanding the definition of a rural area.

The CFPB has expanded the definition of small creditor, raising the definition from 500 first-lien mortgage loans to 2,000, freeing up additional lenders to make rural loans.

They also expanded the definition of a rural area. They will now include all census blocks that are not in an urban area, whereas before, they had other credentials needed to classify a property as rural.

By broadening both definitions, more lenders will be able to loan and more rural buyers will qualify for financing.  Ideally, this will help entice more buyers into the housing market, further strengthening it as it recovers from the recession.




Commissioners to Address Bozeman Affordable Housing

by Tim Hart

In a great article by Eric Dietrich of the Bozeman Daily Chronicle, he outlined the affordable housing proposal that commissioners will consider on September 21st as well as outlining the comments and concerns about the proposal from the two most prominent, opposing parties.

The proposal was made in light of rising values in the for-sale housing market in Bozeman and whether it’s the local government’s responsibility to help keep a certain segment of homes at the affordable level. Currently, there is worry that some residents will need to move to outlying communities to keep their homes affordable. Bozeman has had experts, non profits, builders and anyone else with creative ideas offer their best suggestions to tackle affordability. Ideally, Bozeman commissioners will reach a decision next Tuesday.

The Proposal: Currently, the median income for a resident in Bozeman is $61,800 and can afford a home up to $250,000. However, as of last November, median home prices sat at $287,000.

To help lower the average costs of homes in Bozeman, the city would try to build 14 new affordable single-family homes and townhouses by 2016 with 54 new units by 2017. The city would use inclusionary zoning to get the homes built. Essentially, they would ask builders to build a certain number of affordable homes for every full subdivision, development etc. To entice builders in, the city would help cut down their costs by subsidizing impact fees and reducing lot sizes.

Three quarters of these homes would be priced for residents only making 90% of the median income. That would help a family of three making $55,600 able to afford a home of $213,000.

The last quarter of affordable homes would be built for residents making $49,450 and below, or 80% of the median income. These residents could afford a home of $161,000. 

Currently, builders and home affordability non-profits sit on each side of the debate and both have brought up their own concerns with the proposal.

HRDC: The HRDC is a non-profit, community action agency that has helped build affordable homes across town as well as help residents below median income levels to keep a good quality of life.  The HRDC’s concern with the new proposal is that it does not go far enough. The HRDC would like to see more affordable housing for those making $49,450 or less. They were also disappointed that the proposal does not address issues of affordability in the Bozeman rental market.

Builders: Local area builders are concerned that the new proposal and regulations will require too much financial risk on their part without equal compensation for their sacrifice. Essentially, they would be asked to recoup the lost profits of adding affordable homes to a subdivision through the impact fees and lot sizes. Builders do not believe the profit line makes that feasible.  On top of that, builders are concerned that even if low income buyers were able to buy a home in Bozeman because it had been subsidized, they may not be able to qualify for financing from banks and other insitutions that want to see certain levels of income.  Builders would take on a lot of financial risk without the guarantee that a buyer would be waiting for them.

No matter what the City Commissioners decide, the affordable housing debate will continue in Bozeman. Hopefully, Bozeman will be able to come up with a proposal that would be agreeable to all parties, if not ideal.



Yellowstone Park on Pace to Break Visitor Record

by Tim Hart

After 8 months, Yellowstone National Park is on track to break the most visitors it has had in its recorded history. After the high season starts to wrap up in late August to early September, park officials generally have a good idea of how well the year has gone and will go—so far, Yellowstone continues to trend more visitors each and every year, with old highs quickly becoming the new baselines. 

After August, the park had a total of 3.1 million visitors. That number is 15% higher than the total seen after 8 months in 2014. In 2014 through August, Yellostone had 2.7 million visitors and in 2013 they had 2.3 million visitors. Its pretty clear the park continues to attract more visitors each and every year.

In August alone, 854,000 people visited Yellowstone –10 percent more than those who visited in August 2014. Each of Yellowstone’s five entrances also saw higher vehicle traffic.

From a real estate perspective, more visitors will ultimately lead to more permanent residents. As noted in a previous tourism article, 1/10 of current residents were drawn here either through a seasonal, outdoor job or simply by visiting the local tourist attractions. Gallatin County’s economic growth and population growth both seem to have been positively affected by the amount of accessible public land nearby.

As Yellowstone tourism numbers continue to increase, it would not be a surprise to see the nearby towns’ populations and development follow suit.




Commercial Permits in Bozeman Up as Businesses Shift West

by Tim Hart

The City of Bozeman approved 447 new commercial construction projects—200 more permits than the previous year—highlighting Bozeman’s recent growth on the west end.

City officials confirmed that the west side of town has been the fastest growing and seen the highest rate change in population growth. Bozeman gave out 639 single family home permits in the last two years, with many focused on the west side of town. Businesses have seen the same trends and their shift towards the west end is a smart attempt to attract a less touched market.

As Bozeman’s downtown has become increasingly attractive to both residents and businesses, many other businesses have shifted their gaze to the developing west end of town. This was part of the reason why commercial permits were so high in the last year. Downtown Bozeman properties often require a bit more planning and capital as many require additional construction or renovation. Meanwhile, the west end of town has seen primarily new construction –allowing new businesses to customize the space to their business while taking advantage of a new market. 

City commissioners recently approved a large market space on Bozeman’s west side, highlighting how many people are moving to that section of town.

As Bozeman continues to grow (and apparently westward), planners will need to keep residents close to the standard institutions and amenities in town. So far, it appears they have stayed ahead of the curve, building up both residential and commercial sectors to keep Bozeman an enjoyable, convenient town to live in.



Gallatin County Market Update - September 2015

by Tim Hart

This month, we will compare condo and townhome sales in all of the Gallatin County for 2013, 2014 and 2015 through the second quarter and compare those figures. Here are a few stats for Gallatin County condos and townhomes:

  • Total Quarter 1 and 2 sales increased by 27.46% from 2013 to 2014 (244 sold in 2013, 311 sold in 2014)
  • Total Quarter 1 and 2 sales increased by 6.75% from 2014 to 2015 (311 sold in 2014, 332 sold in 2015)
  • Between 2013 and 2015, sales increased by 36.07 percent.
  • Quarter 1 and 2 dollar volume increased by 55.84% from 2013 to 2014 ($56,339,593 volume in 2013, $87,800,977 volume in 2014)
  • Quarter 1 and 2 dollar volume increased by 0.43% from 2014 to 2015 ($87,800,977 volume in 2014, $88,180435 in 2015)
  • Between 2013 and 2015 dollar volume increased by 56.52 percent
  • Condos and townhomes stayed on the market 11.11% shorter in 2014 compared to 2013 (112.5 days on the market in 2013, 100 days on the market in 2014)
  • Condos and townhomes stayed on the market 21.00% shorter in 2015 compared to 2014 (100 days on the market in 2014, 79 days in 2015)
  • Between 2013 and 2015, average days on the market for condos and townhomes fell by 29.78 percent.

Summary – Through Quarters 1 and 2, condo and townhomes in the Gallatin County continue to see prices increase, though at a smaller rate, while staying on the market much shorter than in previous years. These figures suggest activity is high and the market remains healthy.

All Cash Transactions Down as Home Values Rise

by Tim Hart

Transactions consisting of only cash have now hit their lowest share since 2009. In June 2015, all cash sales accounted for 22% of all existing home sale transactions. In June of 2014, all cash sales were at 32 percent. Existing home sales continue to rise so many buyers have turned to financing their home because their overall confidence in the housing market has improved.

In March, all cash transactions fell by 33% in comparison to March 2014 numbers, suggesting that cash sales have been going down pretty consistently for the past year. According to CoreLogic, all cash sales peaked in 2011 at 46.5% of all home sales in the United States. As the economy and home values have improved, this number has fallen consistently.

In general, individual investors account for a majority of cash sales. As home values have risen over the past years, individual investors will not have as much of a guarantee of return on investment. Investment groups have picked up the slack in some sense but as values rise, all cash transactions will continue to go down. In June, individual investors accounted for 12% of all cash transactions, with other groups, companies or firms accounting for the other 10 percent.

Having less cash transactions helps homebuyers with third party financing better compete against other buyers for a listed home. Due to the fact that all cash transactions are very clean, neat and quick, its hard for any seller to choose financing over all cash offers. Having less all cash offers floating around the market will help other home buyers get the home they want at the price they want.




Displaying blog entries 1-10 of 73