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More Affordable Housing Coming to Bozeman

by Hart Real Estate Solutions

Bozeman is growing exponentially— this is no surprise. What might be surprising though is how quickly it is predicted to grow by 2045. Between 2000 and 2016, Gallatin County added roughly 2,200 new residents each year. From 2017 to 2045, Gallatin County is expected to gain nearly 55,000 new residents, with 50% of these residents expected to live in the City of Bozeman.

It’s been a seller’s market in Bozeman for some time now, with both available inventory and housing affordability increasingly becoming more of an issue in our market. The greater Bozeman area has experienced an average 8.3% increase in median sales price over the last 5 years. Currently, the median home price in Bozeman is $398,000— meaning that a household needs to earn at least $68,400 per year, or $32/hour for one earner, in order for this home to be considered affordable at the 30% of income affordability standard. While the median household income in our area is $68,000 (indicating that home prices are in line with incomes), this statistic doesn’t account for the quality of the housing that is available at this price.

However, with the city’s prices on track to surpass wages, and so many people moving to the area over the next few decades, the need for more affordable housing options is critical. The latest affordable housing project is being led by HRDC, and will be constructed on a parcel of land that partially wraps around Baxter Square Park (just under 3 acres), a quarter mile northwest of the North 27th Ave and Baxter Lane intersection. The 24 townhomes will be available to families who earn between $30,000 and $40,000/year, and those who are interested must financially qualify and complete HRDC education and home buying courses.

The Location Dilemma

Years ago, previous developers created a human-made pond adjacent to the future location of the new affordable townhomes. Their project was stalled in 2008 after the recession and was never fully completed. Over the past decade Cattail Creek merged with the pond, creating an expanse of wetlands in the area, resulting in a difficult location to build on.

Originally, HRDC had plans for a few single homes— they’ve since asked city commissioners to approve constructing the new affordable units closer to the pond, in addition to reducing both the size of the lots and the amount of space between homes and the streets. HRDC also proposed the creation of dog stations, individual lot fencing, and enhanced building signs for each of the units. City commissioners approved the project on February 26th, as it falls in line with their preference for constructing more homes on less space as Bozeman continually adds several thousand new residents every year. 

Future Location for Affordable Townhomes (Approximate)

 

Next Steps

If Bozeman continues to grow as quickly as it is predicted to (an additional 27,500 residents by 2045), then projection estimates will demand 12,700 new housing units over the 2017 through 2045 time period. In order to construct all of these units, developers need between 1,800 and 3,100 acres— the current supply in city limits for residential development is 1,300 acres.

While some of these new 12,700 units will be single-family homes, others will be multi-family buildings, townhomes and duplexes. Some will be affordable housing opportunities, and others won’t be.  At any rate, Bozeman IS growing, and quickly. Whether growth means that we expand up, or expand out, expansion of some sort and the addition of more affordable housing options will be necessary over the next few decades as our city prepares for massive growth.

Another Mid-Rise Building Proposed for Downtown Bozeman

by Hart Real Estate Solutions

Last fall, construction on the controversial Black-Olive building was approved by Bozeman City Commissioners after more than a year of discussions, meetings, and revised design plans. Many Bozeman residents (and in particular, those who live downtown) were and still are concerned that the building will ruin Bozeman’s small-town charm, while others believe that the solution for our rapidly growing community is to “build up” instead of “build out”.

Andy Holloran, the same developer behind Black-Olive, has recently proposed plans for a five-story, 50-unit building on the corner of Lamme and Willson, across the street from the old Deaconess Hospital building. The new mid-rise (currently being called the One 11 Lofts) is expected to include 4 studios, 24 one-bedroom, 11 two-bedrooms, and 11 three-bedroom units. Based on its proposed location, the building is zoned in the city’s Central Business District— which means that the ground floor may or may not include commercial space for businesses.

Will Parking Be an Issue?

One of the major reasons why Black-Olive was originally denied was due to a lack of sufficient parking being included in the first round of design plans— only 37 on-site parking spaces for 56 apartments. Neighbors in the vicinity to Black-Olive were concerned about residents filling up already crowded street parking in front of their homes.

The One 11 building plans currently include 53 parking spaces for the 50 units, which is within the city’s requirements of a single space per unit. Most of these parking spaces will be located within an enclosed garage on the building’s first floor, with 6 spaces on the street outside. So far, the amount of parking provided in Holloran’s first draft of plans is significantly larger than that of Black-Olive.

Next Steps

Though construction on Black-Olive will begin in May, the One 11 plan is under review by the city. Planning documents describe the building as featuring corrugated metal, wood paneling, a flat roof and light-colored brickwork, ultimately giving it a “timeless and contextual quality”. Will this mid-rise threaten Bozeman’s small-town charm and obstruct mountain views? Or will it help maintain downtown’s sense of historic value while still offering a solution to limited housing in the area? For now, all we can do is wait to see how the city responds to the proposal.

 

Proposed Location for One 11 Building

By now, most Bozemanites are aware that the city will soon break ground on a second high school on the west side of town. However, Bozeman High School isn’t the only school that will soon be full— all 8 of the existing elementary schools are expected to reach capacity by either 2020 or 2021. With Bozeman’s rapid growth rate of about 4.2%, it comes as no surprise that schools are quickly reaching capacity. Based on how fast the Bozeman school enrollment has been growing every year, the School Board says that the district will need two new elementary schools in the next 10 years.

The school district currently owns several parcels of land—however, none of them are ideal for elementary schools because they are in areas of town that are not growing the fastest, and therefore do not need additional schools. Ideal pieces of land that Bozeman school officials are interested in purchasing include the parcels near the post office on Baxter Lane, and a parcel south of Huffine Lane near Ressler Motors. In order to raise money to purchase these parcels of land, school officials are hoping to sell the land they currently own— the Emerson lawn at Babcock and 4th Avenue. With the deadline to put a land purchase for schools on the May 8th ballot coming up on February 27th, school officials are eager to sell the land their currently own as soon as possible. So far there are three Emerson lawn bidders, though none of the three bids have met the current appraisal amount for the lawn ($2.275 million).

Desired Locations

Both parcels of land located near the post office are long and thin— not ideal for a school. To remedy this, school officials want to buy both parcels and combine them into one, square-shaped, 10-acre parcel. Luckily the owners of both parcels inherited the land, and are more than happy to sell the land, since it will become home to a school, rather than another condo complex. The total cost of both parcels is estimated to be around $1.6 million. Developer Gene Cook owns the 12-acre parcel of land just southwest of Ressler Motors off of Huffine Lane— school officials have stated that although terms of a deal haven’t been negotiated just yet, they are hopeful that the developers will be willing to either work out a land trade or donate several acres to the school district.

Bozeman school officials will ask voters in May to approve either one or both locations for the future elementary schools and are hoping to have the money from the Emerson lawn sale in hand by that time so that school officials will not have to ask voters for money or tax hikes. 

 

Current Elementary Schools (Blue) and Probably Future Locations (Red)

Why Baby Boomers and Millennials Are Competing for Housing

by Hart Real Estate Solutions

For years, many parents put their family homes up for sale once the kids grew up and moved out— this is known as the “empty nest” story, where many parents wanted to downsize as they grew older and neared retirement. This isn’t the case anymore— many Baby Boomers (born between 1946 and 1964) haven’t been able to find a smaller home that was cheaper than the large family home, so instead they’re opting to stay put and not sell. With so many Boomers choosing not to list their homes for sale, overall inventory has remained tight and prices have stayed high.

Why is this?

In a recent survey conducted by Realtor.com, 85% of Baby Boomers said they were not planning on selling their homes in the next year. When asked why, 72% said that their current home met their family’s needs, 13% said financial concerns prevented them from selling, and 12% said they needed to make home improvements before selling. Baby Boomers hold a very high stake in the housing market, as they currently make up 78% of ALL homeowners, while Millennials only make up 41%.

As Baby Boomers decide to stay put, this removes about 33 million properties from the housing market. Many of these homes are suburban single-family homes or urban condos— the same types of homes that Millennials are looking to buy. However, many of these older homes do not have the same modern, open-floor plan that both Millennials and Baby Boomers alike are attracted to, making it difficult for Baby Boomers to sell their homes. Both generations are competing for the same types of homes (1,800-1,950 sq. ft.), even though they have different lifestyles.

Many low-end homes that Millennials would consider purchasing in a more balanced market are being rented rather than being available for sale, due to competition being so high. The idea of purchasing a starter home and reselling it several years down the right road when they’re ready to settle down and start a family is no longer a viable option for them, due to lack of inventory and affordability in today’s market. As a result, many Millennials are now skipping traditional starter homes, and choosing to buy something larger right off the bat.

The Future

Many analysts believe that more housing in the future should be built to cater to the desires of Millennials (greener materials, less square footage, etc.) rather than the older generations. Others believe that Baby Boomers will eventually sell their homes as they hope to get a better price later rather than settling for a lower price now. If and when “the great senior sell-off” happens, it isn’t likely until the mid-to-late 2020s, as the oldest millennials approach their mid-40s and are more interested in the larger homes that the preceding generation is ready to let go of.

How To Ensure a Smooth Move with Your Pets

by Hart Real Estate Solutions

While moving to a new home is tremendously exciting, it can also be incredibly stressful. Whether you’re moving across the country, across the state, or just across town, moving requires a lot of preparation and planning ahead of time, especially if you have pets. We all love our furry friends and want to make the move easier not only for us, but also for them. Here are a few tips to ensure that your move with pets is as hassle-free as can be:

  1. Cats (and skittish dogs) don’t like change— keeping your pet’s routine as normal as possible leading up to moving day will help them start to acclimate to a changing environment. Walking and feeding them at the times you normally would will benefit them tremendously.

 

  1. Additionally, start bringing your moving boxes in early rather than all at once to help them adjust to the moving process ahead of time.

 

  1. On moving day, keep pets in a quiet, closed room or a fenced backyard to avoid them getting underfoot or running away, especially since front and back doors will be open for a majority of the time that you are loading up vehicles.

 

  1. Always transport small animals in a well-ventilated and secure carrier, and always keep larger dogs leashed and under control.

 

  1. If you’re moving long-distance and plan on staying in hotels for any part of your move, make sure the hotel is pet-friendly before you arrive.

 

  1. Inform your vet if you’re moving out of the area— they’ll be able to give you medical records and prescriptions, and may even be able to recommend another vet in your new neighborhood.

Moving isn’t easy, and it certainly isn’t made any easier by having to move your pets, but by planning ahead, making arrangements early, and maintaining their routine, a move can be smooth sailing, no matter the distance.

Our office puppy, Maya!


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A New Solution: Bozeman’s First Affordable Housing Director

by Hart Real Estate Solutions

Bozeman’s Affordable Housing Action Plan pinpointed several major strategies to implement over a 5-year timespan (2012-2016). Its purpose was to work on providing more affordable housing units and down payment assistance for both renters and homeowners alike. While this plan outlined several goals that were partially met by the end of 2016, affordable housing in Bozeman is still a significant issue that needs continued attention and work in the future.

In 2010, 28% of homeowners and 49% of renters in Bozeman were living in unaffordable housing, when using the widely accepted benchmark amount of <33% of total income for homeowners and <30% of total income for renters. It’s important to note, however, that there is no universal home price or rent benchmark that defines “affordable”— this varies by income level and should be based on ability to pay.

 By 2015, at least 4,000 of the city’s 8,400 renters were paying rents at or above the 30% threshold, while a third of homeowners were paying at least that much, if not more.

Is Something Being Done to Help?

With these statistics not having improved much in recent years, the City of Bozeman has decided to hire its first affordable housing director. The person who will fill this new position (expected to begin by the end of January) will be responsible for generating solutions to help reduce the gap between the cost of housing and how much many Bozeman residents can afford to pay.

Six months ago, Bozeman planning adopted a new rule that mandated that builders and developers would have to either sell 3 in 10 homes in new developments at $260,000 or less, OR 1 in 10 homes at $215,000 or less, subject to change based number of bedrooms per unit. The city has been trying to keep up with this rule, which is where the need for an affordable housing director stems from.

Additionally, the new director will help to track housing projects from the time a building permit is issued to the time that someone closes on their home, in order to ensure that this 6-month-old rule is followed from start to end.

As 2018 unfolds, it will be interesting to see how this new position begins to change the affordable housing market and what impacts it will have on many of Bozeman’s renters and homeowners who are currently above the income threshold for housing. 

Affordable Housing Development for Livingston in the Works

by Hart Real Estate Solutions

With 13.2% of Livingston’s total population (last estimated in 2016 at 7,401) in poverty, the addition of an affordable housing development would greatly benefit citizens who are currently working and earning lower wages.

How is This Problem Being Addressed?

Over the next 10 years, the Montana Board of Housing has assigned $27 million in credits to help fund affordable housing projects not only in Livingston, but in Billings, Butte, Kalispell and Lewistown as well. Homeword, Inc., a Missoula-based, non-profit affordable housing developer, has been awarded $5.8 million in tax credits to transform the old Livingston Memorial Hospital building into 34 studio, one- and two-bedroom apartments.

The new apartment complex, Bluebunch Flats, is named after Montana’s official state grass, Bluebunch Wheatgrass. In keeping with Homeword’s mission of sustainability, hospital rooms in the existing Memorial Hospital building will be renovated and converted into individual apartments.

Units will available to residents who make between 40% and 60% of the area median income. As of last year, median household income for Livingston was $40,358, while per capital income was just shy of $27,000. Although rent prices are not yet set in stone, they will likely range from $425 for a studio to $800 for a two-bedroom. Construction is set to begin in the summer of 2018, with a projected completion date of mid-2019.

Other Affordable Housing Projects Around Montana:

  • Billings: Heights Senior Apartments— 38-unit project for senior citizens
  • Butte: Copper Ridge Apartments— 32-unit project for families
  • Kalispell: Courtyard Apartments— 32-unit acquisition rehabilitation project for families
  • Lewistown: Meadows Senior Apartments— 35-unit acquisition rehabilitation project for senior citizens

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Housing Market Trends Amongst Generation Y

Home Prices and Growth: What's Going On?

Belgrade Expands and Prepares for Future Growth

Housing Market Trends Amongst Generation Y

by Hart Real Estate Solutions

Inventory of homes for sale is tight and as a result, months of supply is low. With so many homes not remaining on the market for long, sellers have the advantage over buyers in that they have a much higher chance of obtaining top dollar for their home.  While this information isn’t new, you may be surprised to learn that generational trends play a huge role in today’s housing market, particularly amongst the buyer population. 

Who’s Buying the Most?

Different generations have different home buying tendencies and patterns. In 2016, Millennials/Generation Y (ages 36 and younger) represented 35% of all homebuyers across all other generations. This year, that number is down to 34%— still the largest share of home buyers. Of these buyers, 66% were also first-time home buyers. Generation X (ages 37-51) represented 28%, Younger Baby Boomers (ages 52-61) represented 16%, Older Baby Boomers (ages 62-70) represented 14%, and the Silent Generation (71-91) represented 8%.

 

Of all Gen Y buyers, 46% had a median student loan balance of $25,000, and 23% agreed that saving for a down payment was the most difficult step in the home buying process. It makes sense that this loan balance would decrease over time as the buyer ages, due to increases in income— however, 27% of buyers between the ages of 37 and 51 had the highest median loan balance of $30,000. This is likely due to accumulation of their children’s college loans on top of their own remaining balances.

Why Is Gen Y Dominating the Buyer’s Market?

Despite low inventory, rising house prices, and student loan debt, why does Gen Y represent the largest share of home buyers? For starters, rent prices are on the rise too— when taking into consideration that monthly rent payments can increase over time and mortgage payments are fixed, many Gen Yers are leaning towards home ownership. Many are also choosing a mortgage over renting because of their dogs— 33% of Gen Y home buyers stated their primary reason for purchasing a home was to have a yard and plenty of room for their dog, while 25% stated it was because of marriage and 19% stated that it was the birth of a child. Simply put, the desire to own a home of their own, the desire for a larger home, and a change in their family situation were the top 3 reasons amongst all Gen Yers for purchasing a home.

Looking Towards 2018

Although student debt and rising house prices may present a challenge for some, many Gen Yers are putting these factors aside and continuing to contribute to the housing market in a pretty significant way. As the days remaining before 2018 starts are limited, here’s what the Professional Warranty Service Corporation predicts for generational home trends for the new year: Gen Yers will represent 45% of all home loans while Baby Boomers represent 30%, and overall home sales will increase by 8%, or about 670,000 units. So far, it looks like Gen Y is on track to dominate the market for another year! 


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Home Prices and Growth: What's Going On?

Survey Finds Seceding Buyer Confidence in the Real Estate Market

Red Flags in the Real Estate Market

 

5 Tips to Help Your Home Sell in the Winter

by Hart Real Estate Solutions

True or false- the best time to sell your home is typically during the spring and summer months— true. However, this doesn’t mean that you can’t sell during the winter and still get a great price.

If you’re considering selling this winter, here are several tips to help you prepare your home:

  • Snow removal: In order to set foot inside your home, buyers have to get there first. Shovel the snow and use salt to melt any ice patches, and ensure that the path to the lockbox (if you’re using one) is clear for agents.
  • Curb appeal still matters: Even though people won’t be spending much time outside the home for several months yet, it’s still important to maintain the exterior— clean out the gutters and keep trees and shrubs trimmed to help buyers envision what your home will look like during warmer months.
  • Set the scene: Create a cozy feeling during showings— add blankets to the couch, light some candles and use tasteful Christmas décor if selling during the holidays. If you have a fireplace, use it to showcase both its ability to warm up a room and its added aesthetic to your home.
  • Light it up: Winter has a tendency to remove a lot of natural light. To combat this, open window treatments during the day and utilize lightbulbs and candles to create as much lighting as possible.
  • Keep on eye on the weather: Be prepared for delays due to bad weather— showings, inspections and even document transmissions can be delayed if a winter storm rolls in. 

 

Sometimes homes sell for more during the snowy months because there is less inventory to choose from, although the amount of time to sell is dependent on weather, which in turn is dependent on the number of showings you’ll get. Even though there are fewer buyers during the winter months, the buyers that ARE looking tend to be more motivated. While there are benefits to selling during the spring and summer, there are also benefits to selling during the winter as well. 


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Home Prices and Growth: What’s Going On?

by Hart Real Estate Solutions

What Does Growth Look Like Around the U.S.?

It comes as no surprise to many of us that owning a home can be an expensive venture. Factor in HOA fees, interior appliances/materials, miscellaneous maintenance costs and everything in between, and it’s easy to see why being a homeowner can appear to be daunting to some.

Although home prices grew 5.6% last year, this is only determined when comparing dollars to dollars. If this statistic is adjusted for inflation, this increase is still actually 15% below the high that occurred in 2006. Of the country’s 100 largest metro areas, only 41 grew to new peaks, even though 97 of these 100 metro areas did see overall home price growth. Overall, housing markets on both the West and East coasts have experienced inflation-adjusted home price increases of more than 40% in the last 16 years, while markets in the Midwest and South have generally experienced decreases.

However, growth has not been the same across all income levels. After Harvard researchers collected data for more than 9,000 ZIP codes across the country, most home prices in all income brackets were LOWER than their pre-2006 peaks. Here’s the breakdown:

  • Low-income areas: 13.7% lower
  • Moderate-income areas: 6.5% lower
  • High-income areas: 3.3% lower

Because of the post-recession change in home prices, many homeowners were able to emerge from underwater, a term indicating that the value of a home is below or under its mortgage amount. In 2011, the number of underwater homeowners topped out at 12.1 million; by the end of 2016, that number was down to 3.2 million.

                   

Source: PalmBeachPost.com

What About Growth in and Around Bozeman?

Bozeman remains one of the fastest growing small towns in the country, with a population growth rate of 4.6%. Home prices across the state currently exceed pre-2006 levels by 10%.

When comparing median sales prices between Bozeman, Belgrade and other Bozeman areas, home prices are still steadily on the rise in all 3 areas.

 

Median Sales Prices (2011-2017)

This data was pulled Big Sky Country MLS for 2017. 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.

 

Although median sales prices are continually rising, the good news is that the median sale price is often lower than the median original asking price: 

This data was pulled Big Sky Country MLS for 2017. 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.

 

As for the country as a whole, Freddie Mac predicts an overall home price increase of 4.9% in 2018. While that may seem like quite a jump, this prediction is still lower than the 6.3% growth we’ve seen so far this year.  Much like the prediction for 2017, 2018’s prediction also suggests continued economic growth of around 2%, steady job gains and relatively low mortgage rates. 


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