It’s no surprise that Bozeman has been one of the fastest growing towns of its size for many years, along with several other towns in the mountain west. Bozeman saw the third biggest population gain for a micropolitan area in the nation from 2020 to 2021.* Residents have all felt the effects of this population increase, and when we think about the extra 3,753 people that recently moved to Bozeman relative to its size, it’s mind-blowing.
There have been a number of contributing factors that have led to Bozeman’s popularity, and Covid catapulted those. As a real estate office, we have seen a huge increase in website traffic and out-of-state interest over the past two years. When Covid hit, the inventory of homes for sale dropped drastically, prices rose, and our town felt a palpable shift with many newcomers. This fall we saw a brief slowdown in the market, which got everyone wondering if the bubble was going to burst. As we head into the busy season of real estate, we are wondering - is Bozeman still a hot spot?
We have started to see an increase in listings since the start of 2022, which is common for real estate in the spring. Home prices in Bozeman are still rising steadily and homes are still going under contract incredibly fast. However, we are beginning to see price reductions again which has been largely unheard of over the past two years. It's hard to determine if we are seeing the real estate stabilize after two unusual years of activity, or if Bozeman is losing its spark and people are moving on to the next hot spot. There is also the reality that many people have been priced out of the Bozeman real estate market and are moving out of the area.
Even prior to the pandemic, Bozeman often made it on top lists of the best places to live. In 2020 Bozeman was #6 on the Top 15 fastest-growing micropolitan areas on siteseer.com, but in 2021 it dropped off the list. In fact, 9 of the 15 towns on this list have dropped off, including Kalispell, Montana, and a few other mountain west towns in Utah and Wyoming. It appears the trend of people moving from metro areas to smaller towns is continuing, but not at the same pace. This change could be because remote work is shifting again with more employers requiring people to get back to the office.
But, the desire for people to move to mountain west towns has not ended. Bozeman continues to be in the company of towns like Salt Lake City, Jackson Wyoming, Bend Oregon, and Coeur d'Alene, Idaho as hot spots to visit and live. Bozeman, Missoula, and Kalispel all made the lists of hottest real estate markets by appreciation in 2022, with Bozeman showing a 30.33% increase year over year for home price growth**. This means that even though Bozeman might be off the radar for some, it still appears to be part of the conversation.
At a local level, we have seen out-of-state interest slow down slightly. No one expects to see a housing bubble collapse as we did in 2008, but most housing markets have a cycle. As Bozeman builds up the inventory for the increased demand we have seen over the past two years, we might start to see a correction in the market. This is a cycle Bozeman has seen more than once over the years. But as we see more employers and tech companies looking to make Bozeman their headquarters, and the Bozeman Yellowstone International Airport continues to add direct flights to major metropolitan areas, it is very likely that Bozeman will always be a place of interest. And, as long as the show Yellowstone is on the air, Bozeman will probably remain a popular place.
*U.S. Census Bureau’s Vintage 2021 report
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