Bozeman Trending - Fall

Market Shift?

Can you feel it? The market has shifted - so very slightly. As is often the case with the change in season, a change in the market follows.

Bozeman's most expensive month to buy has historically been August. 2021 however, has held crazy gains throughout the year and September of 2021 median sold price increased 35.7% over September of 2020. Break that down. If you closed on a home in the Bozeman City Limits in September of 2020 and held it for one year, your home today is worth 35.7% more today than it was a year ago.

Bozeman properties from September of 2020 to September of 2021 increased nearly 3% a month in the last twelve months. 

Understanding Pricing

Another way to breakdown the 3% a month increase of Bozeman home values: if it on average costs 7% to sell a home and you live in a property for 3.3 months, you could sell the property and break even, less mortgage payments.  If you live in the same property 4 months, after selling costs at the current growth rate and sold the median Bozeman home, you'd walk away with an extra $10,100 after estimated 7% selling costs in your pocket and have lived in essence "rent free" for four months. 

If you are currently renting in Bozeman, why are you renting? Don't forget, with a decent credit score (680 or above) and as little as 5% down, you could be eligible for a conventional loan!

What is the other piece to this discussion? Supply.

What is a balanced market? A balanced market is one where Buyer demand is nearly equal to Seller supply. In real estate courses, we've always been taught a balanced market provides a 3 month supply of inventory. If a home has to wait up to 90 days to be consumed by a Buyer, a Seller is then (in theory) motivated to work competitively with the Buyer to ensure the needs of both sides of the transaction are met.

2015 was our last balanced market in Bozeman. In the past three years, the Bozeman market has varied between 2.9 months of supply and a current 1.1 months of supply. What does this mean? It means, statistically we continue to be in a Seller's market. Seller's have the goods in high demand and Buyer's are still lining up to buy properly priced property.

Setting Expectations

List vs. Sold: Does pricing matter?

Thankfully, yes. Pricing still matters. Properties that are overpriced languish on the market. Statistically, homes in Bozeman and Belgrade can expect to be on the market no longer than 5 days. As properties sell statistically at, or above asking, today pricing is as critical as ever. Buyers should expect to pay full price, meaning incorrect pricing, as little as 1% over the market could cost the property critical days on the market and cause the listing to languish.

When an easy to show property stays on the market for over 5 days, Buyer's start to wonder "what's wrong". The first question is price. There can of course, be extenuating circumstances that procure longer days on market including difficult to show property or properties not showing well. If the showing conditions can be improved, an acceptable offer will likely follow.

In Summary

Pricing is Still an Art

I'd love to tell you that pricing is absolute. That there is hard and fast data every time and the rules of the market are always followed. However, if that happened, Zillow and Trulia would be able to predict our market. We have shown time and time again that there is no substitution for experience.

Knowing each micro-market and helping our Buyers and Sellers prepare for the market segment they are hoping to transact in is one of the many tools that sets us apart from our competitors and will help support you in your real estate transaction,

be it buying or selling.

Remember, all of the data I've shared above is broad stroke. It is a general update for the Bozeman and Belgrade market as a whole. It does not address individual outliers or pockets of data that perform differently. There are communities that statistically transact at higher values than their neighbors, and others that perform seasonally. Are you curious what is possible with your property today? Let's talk about your personal situation and explore what may be possible, together.