2020 and into 2021 has been a wild time for the Bozeman real estate market! The Covid pandemic had a major impact on the number of people moving to Bozeman, construction supplies dwindled and home prices went through the roof, with the median price of a single-family home increasing by $150,000 in a year!* This summer began with the same frenzy with no signs of slowing, but in the last couple of months, things are beginning to change nationwide as well as Bozeman. While we don’t expect to see the Bozeman real estate bubble burst, we are seeing things level off.
According to Business Insider, home sale prices fell in July nationwide and it was the first time prices didn’t set a record in five months. Nationally median sales prices first started to show a decline in March. Although it’s important to keep in mind the 4-week average for sales prices is still 18% higher year over year. Experts expect these numbers most likely will not return to pre-covid numbers. This was similar in Bozeman where for months we’ve been seeing median sales prices going up and in the last two months they have been leveling off. In May the median sales price in Bozeman was $623,000 and this number slowly decreased in the last three months with $620,000 the median sales price in July.
(Due to low inventory, a median price based on the sales for one month can be easily skewed. In order to give you the most accurate price possible, the median price listed here is based on 3 months of activity. This data comes from the Big Sky Country MLS.)
Buyer demand in 2020 and into 2021 far outpaced supply which led to bidding wars and listings going for well over asking. This past spring, 43% of single-family homes sold in Bozeman for more than asking!* In June and July, things started to slow. We saw buyers begin to back off and fatigue from the frenzy. This has allowed some inventory to increase and since buyers backed off, homes that are priced high are staying on the market longer. Since the first of the year, we have seen a steady increase in residential properties for sale in Bozeman. In January there were just 97 new listings and in June that number increased to 228. This is good news for buyers.
While nationwide homes are staying on the market longer, in Bozeman we are still seeing inventory going under contract quickly. However, we are seeing fewer bidding wars and fewer homes going for over asking. At the beginning of the summer, if a single-family home went on the market in Bozeman for under $600,000 it wasn’t uncommon to have 30 groups through the home, a dozen offers made and the home going for upwards of $100,000 over. I think everyone can agree, it’s nice to see this calm down.
Along with buyer fatigue and a small increase in inventory another reason the real estate market is cooling is mortgage rates are creeping up. They have been at historic lows, even into July which surprised some experts. No one is expecting sharp spikes coming up, but they do believe they could increase slightly over the next few months.
If you have been looking to buy in Bozeman or the surrounding areas, knowing the market is calming down is a positive. If you were holding off over the past year because you didn’t want to battle with other buyers over the limited inventory, now might be the time for you to start looking. With more homes on the market, there are more options and while multiple offers still happen, it is definitely not quite as cut-throat.
While things are stabilizing slightly, the real estate market in Bozeman is still strong and no one is anticipating a big correction or crash. It is still a great time to sell your home as we come to the end of summer. Generally, the real estate market slows down even more as we get closer to the winter months, so right now is the time to get your home on the market! If you're wondering what your home is worth in the current market, click here.
*Stats are from Big Sky country MLS InfoSparks
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