In June, 2017 the Bozeman Daily Chronicle analyzed data from the Department of Revenue. They discovered that the value of residential properties inside Bozeman city limits increased by an average of 15% in the span of just two years. The increase in property values was not specific to a certain price point, location or style of home. According to the Chronicle “Pretty much every home in the city — Willson Street mansions, college rentals, newer construction on the west side — is valued higher than it was two years prior, often drastically so. Of the 9,333 residential properties inside city limits, DOR statisticians estimate that only 227 lost value over the reappraisal cycle.”
The amount of wealth this has created for property owners in Bozeman is remarkable. The increase comes out to more than $524 million of property value gained inside Bozeman city limits. So, yes. Being a property owner in Bozeman does pay off. And, as one of the fastest growing communities in the U.S, population growth and property values are showing no signs of diminishing.
Low supply and increasingly high demand continue to drive the cost of rent higher and higher. In the last 5 years, rent for a 1 bedroom apartment in Bozeman increased by 30% while rent for a two bedroom apartment increased by more than 60%*. According to a Bozeman Rental Housing Survey conducted in 2014, the vacancy rate for rentals in Bozeman was effectively zero. Since 2014, Bozeman’s population has increased by more than 3,500 people while enrollment at Montana State has increased nearly 8%. With Bozeman’s population growth showing no signs of slowing down, the housing market is struggling to catch-up. Bozeman's highly competitive rental market makes investing in Bozeman an appealing alternative.
These days, with the average price of a single family home in Bozeman moving above the $400,000 mark, it is impossible for many to invest in a traditional home. At the time this article was written, there were 42 condominiums for sale within Bozeman city limits with prices as low as $190,000 and as high as $1,797,000. There were 17 townhomes, starting at $316,000 and topping out at $1,537,000. Other great opportunities for investment in Bozeman are single-family homes with apartments, like this one, duplexes, fourplexes or complete apartment buildings.
Many people have been priced out of the Bozeman real estate market as the rush to grab a piece of the Bozeman pie drives prices higher and higher. The good news is that there are many affordable alternatives outside of Bozeman.
In Belgrade, the average price of a home is 32% lower than in Bozeman. A single-family home costs an average of $311,403 and the average price of a condo is just over $150,000. Prices are similar in Livingston, Three Forks and Manhattan where the sticker shock of Bozeman’s real estate prices is distant.
While real estate in these areas may not be quite as lucrative as in Bozeman, as the growth in Gallatin Valley continues to spread you can bet that the property values will increase.
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