2020 will go down as one of the craziest years we’ve ever seen in Bozeman real estate. When the year began, we saw a steady stream of out of state buyers showing interest in the area. There were still homes available for sale, and while they were going quickly, bidding wars were rare. But then, COVID hit. In the first month, we saw a complete drop in real estate activity as everyone hunkered down at home, unsure about what this new pandemic would mean for our housing market. But by May we started to see real estate activity pick up again along with a significant increase in out-of-state traffic on our website.
By mid-summer, Bozeman’s real estate market was like nothing that we had ever seen before. Nearly every home that came on the market within a certain price range was getting multiple offers, and homes started selling for over asking price often. In the final months of 2020, we have seen a huge drop in inventory and a huge spike in closed sales. You don’t have to be an economics expert to know that this clash of supply and demand will have a significant impact on our real estate market as we move into the next year.
The number of homes available for sale in Bozeman has been on the decline since 2016, but between May and November of this year, we saw the number of homes for sale in Bozeman drop almost 30%. This is the most drastic decline in inventory that Bozeman’s real estate market has ever seen. This, combined with the increase in buyers is creating an incredibly tight real estate market.
Graphic: Homes for sale in Bozeman
Bozeman was on the map well before the pandemic, but something changed when COVID hit. All of a sudden people were fleeing cities and looking for places that had wide-open spaces and a high quality of life. Cue Bozeman. Out of state traffic on our website increased 87% this year, and requests for information from people out of state increased 263%. We saw a huge influx of people from California, Utah, Texas, Washington, and Colorado, just to name a few. This increase in buyers has impacted an already tight real estate market.
Graphic: Homes sold in Bozeman
Before 2020, it was rare to see a bidding war on a home in Bozeman or to see a home sell for over the asking price. But this year both of those became the norm in our market. With the median price of a single-family home in Bozeman hovering in the $500,000 range for most of the year, many home buyers became desperate to find anything in their price point. Any home listed under $400,000 went FAST and often for over asking price. Between May and December of this year, 40% of the single-family homes sold in Bozeman that were priced under $450,000 sold over the asking price. If you are in this price range, don’t get discouraged. You can still buy a home in Bozeman, click here to find out how.
Graphic: Average days on market in Bozeman
Based on the influx of buyers in Bozeman, low inventory, and increased competition, this comes as no surprise. Home prices in Bozeman have been increasing steadily for several years, but we did see a bit of a jump this year, particularly with single-family homes. Between May and November, the median sold price of a single-family home in Bozeman went from $509,950 to $575,000. The sold prices of condos and townhomes did not increase quite as drastically. When we look at the median sale price of condos, townhomes, and single-family homes in Bozeman, it went from $432,000 in May to $465,000 in December.
So what does all of this mean? Well, for those who own a home in Bozeman and are thinking of selling, this is great news. The value of your home increased significantly over the last year. If you decide to sell (and you use a good real estate agent) you will get top dollar for your investment.
If you are a buyer in Bozeman’s real estate market, all of this may seem discouraging but please don’t lose hope! If Bozeman is out of your budget, Bozeman’s surrounding areas are a great option and you can find significantly lower real estate prices in Belgrade, Livingston, and Three Forks. If a home in Bozeman is within your financial reach, you want to make sure you have a great real estate agent who can help you navigate the competition. Click here to contact us and we will make sure to get you in touch with a great real estate agent who can help.
*statistics courtesy of the Big Sky Country MLS, InfoSparks
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