With rising interest rates and talk of a recession, many buyers are hitting the pause button on their home search. This is understandable during uncertain times, especially coming off of a crazy couple of years in Bozeman real estate. While it may not be the right time for everyone, there are many reasons it is still a good time to buy in Bozeman
After years of huge price increases month over month, we have finally watched prices stabilize this summer in Bozeman. From January 2020 to January 2022 we saw a 61% increase in the sales price of single-family homes!* This past April we finally saw a decrease in median sales prices and they have continued to stabilize. Everyone can agree that home prices in Bozeman were getting out of control and out of reach for many buyers. This decrease in prices may mean it’s a good time to start your home search again. Price reductions have also increased in the last month so there may be a home you thought was out of reach that is now in your price range.
Buyers in the last two years faced an immense amount of competition in Bozeman. When a home came on the market it was met with tons of showings and resulted in a handful of competitive offers with some going for up to over $100K over asking! Along with that was the influx of out-of-state buyers, some of whom were making cash offers and removing all contingencies. This made it nearly impossible for the average home buyer to get an offer considered. Supply and demand issues that Bozeman was facing became more exaggerated because of Covid and the migration of people here. Since the first of the year, inventory has been increasing, which is good news for buyers. To give an example in December 2021 there were under 60 new listings. Fast forward to June and there were over 200!* The increase in supply has greatly reduced the amount of competition buyers are facing. Rather than having to make an offer immediately, or even sight unseen, they can take a little time and think about it before writing an offer.
With the increase in homes hitting the market, and prices stabilizing more sellers who were waiting to list are doing it now. Most want to get their home sold in case prices come down further, or they are also buyers and need to sell sooner rather than later. This means sellers may be more willing to negotiate. When there aren’t a dozen offers coming in the minute the home is listed, sellers are more likely to consider the ones that are.
The rise in interest rates has had a huge impact on buyers and does need to be considered if you are looking to buy a home. However, rates remain well below historical highs. We’re coming off many years of low-interest rates so it has been an adjustment for buyers. Click here for more information on navigating the rising interest rates or click here for ways to reduce your mortgage rate. There are also options to refinance later on when interests have come done.
Bozeman’s population has increased by more than 40% in the last decade and is growing more than three times the growth rate of the state of Montana.** We have seen this slow down this summer, but it certainly doesn’t mean Bozeman isn’t still a hot spot. Many believe that Montana will continue to be on the radar for people looking to make a move, along with other mountain west towns. Covid may have catapulted it, but Bozeman has been one of the fastest-growing cities in the U.S for the past decade. This means buying in Bozeman while prices are stabilizing will most likely be a good investment for the future.
*Statistics courtesy of the Big Sky Country MLS
**Statistics courtesy of the U.S Census Bureau and www.worldpopulationreview.com
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