While real estate activity in Bozeman was noticeably slower this summer compared to previous years, the median sale price in Bozeman has remained steady. Many agents attribute the slowing market to the end of the pandemic as well as rising interest rates but there are still a lot of questions about what is happening in Bozeman’s real estate market. So, to get a better picture of what's happening with the market, let’s take a look at some numbers!
Beginning in the spring of 2020, we saw the median sale price of a home in Bozeman increase each month for nearly two years straight! As the pandemic came to an end and interest rates started to rise, things finally started to slow down. Across the nation, many cities saw home prices drop. In Bozeman, we saw more of a leveling out as the market steadied. It was a relief to most to simply see prices not rising so quickly. In Bozeman, we went from seeing a 48.5% increase in median sold prices from June 2020-21 to just a 1.16% increase from June 2022-23.
We also saw a decrease in homes sold this past summer compared to previous years. There were 236 homes sold in July 2020 compared to 113 homes that sold in July 2023. This indicates that while the real estate market in Bozeman slowed, it hasn't come to a standstill either. The homes that are selling, however, aren't selling in bidding wars and going for over asking like they were at the height of the market. To date, in 2023 we have seen more homes go for under asking rather than at or over asking.
The one segment of the Bozeman real estate market that seems to be the least affected is the luxury market. So far in 2023, there have been just over 1,000 listings in the Bozeman area. Of those listings, the majority were listed between $600,000-$800,000. But, the second largest group of homes for sale in Bozeman were over a million dollars with nearly 400 listings in that category! And, these listings aren't just sitting on the market, they are going under contract and selling.
CNBC.com recently posted an article that named Bozeman as a city with the largest shares of million-dollar listings out of 30 small markets they reported on. This is a tough pill for anyone who has lived in Bozeman for a long time to swallow. What we are seeing is locals who work in the community getting priced out of Bozeman, and people who can afford these high-priced homes continuing to move in.
While listings are sitting on the market longer in Bozeman, the supply of homes is still low. As we approach the end of summer we are beginning to see an increase in listings. If you look at the numbers since 2020 it appears we will be on target to have as much, if not a little more inventory by the end of this year.
2020 - 1,306 Listings | 2021 - 1,157 Listings | 2022 - 1,125 Listings | 2023 - 1,007 Listings YTD
There is still a lot of development happening all over Bozeman. Downtown is seeing huge changes with the North Central project that will bring both residential and commercial properties. The south side of Bozeman is booming with several new developments expected to bring hundreds if not thousands of homes to the market, and the growth has certainly not slowed down on Bozeman's northwest side of town either. All of this new development will add to Bozeman's inventory and hopefully help meet demand.
When it comes to predicting what is going to happen in the Bozeman real estate market as we head into the final quarter of 2023, many experts think it will remain the same until interest rates decrease. This means many buyers are waiting and once rates come down there will be a lot of pent-up demand. If supply hasn't caught up at that point, we will likely see home prices start rising again. This may not be the case nationwide, but certainly in a place like Bozeman and other Montana towns that remain popular places to move to.
To stay up to date on Bozeman's real estate market, click here. We update these numbers monthly and there are some great market indicators to explore here.
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