What a strange year it has been! The COVID-19 pandemic has turned much of the world upside-down. You might be wondering what the impact has been on the Bozeman area real estate market. We are here to offer some insight into this area!
While many industries have been significantly impacted by the pandemic, you might be surprised to find out the real estate market in the Bozeman area isn’t one of them. The following summarizes the current state of the Bozeman / Gallatin County single family home market based on a detailed review of MLS data as of 06/30/20.
This MLS area is located within the current city boundaries. Median home prices have been on a steady climb since the market low point in 2011 with single family home prices nearly doubling during that period. The current median single-family home price in Bozeman is $476,000. This is up 10.7% from the same period in 2019. Affordability remains the greatest challenge in the Bozeman market. Only 6% of the homes sold through the second quarter of 2020 were priced below $350,000. The price segment with the highest percentage of homes sold was for homes priced above $600,000 at 30% of the total homes sold. Price increases continue to be driven by the historically low inventory of homes available for sale. Current homes available for sale represent only 1.9 months of sales inventory based on current sales levels, the lowest level seen in the past 20 years and considerably below the 6 months of sales inventory considered to be a healthy, normal level. Total MLS listings are down 32% from the same time last year. Another factor impacting current inventory levels is the limited availability of single-family home lots to build on. There are currently only 34 single family home lots listed in the Bozeman market. Low lot availability has resulted in the lowest level of building permit issuances since the depths of the Great Recession.
The Gallatin County MLS area to be discussed includes the area from Love Lane on the east to the Gallatin River on the west and from Gallatin Gateway to the south up to north of the Airport on the North. While county prices are more moderate than the City of Bozeman, they too have seen a steady climb in total sales and pricing since the low point in 2011 with single family home prices nearly doubling during that period. The current median home price in Gallatin County is $390,500 which is up nearly 9% from the same period in 2019 with total single-family sales identical to 2019 levels. Only 8% of the homes sold through the second quarter were priced below $300,000 with the largest percentage of homes sold being priced over $500,000 at 26.1%. Much like the city, county prices are being driven by historically low inventory levels which currently stand at 1.1 months of supply, the lowest in the last 20 years. Total MLS listings stand at 64 homes, down 32.6% from the same time last year. The availability of building lots is a significant factor in the county as well given the completion of several large project in Belgrade and Gallatin County starting this year. There are currently only 58 lots listed for sale on the MLS as of the end of the second quarter.
The Coronavirus pandemic appears to have had little impact on the overall Bozeman market. Given the limited supply of single family home inventory and lower levels of new home construction coupled with historically low mortgage rates, we expect home prices will continue to increase by as much as 5-7% annually while we expect overall all single family home sales to decline from 2019 levels. Bozeman continues to be a very attractive community for out of state buyers who may now be looking to relocate from the coastal markets based on recent pandemic concerns. We believe all these factors will be an overall positive for the Bozeman real estate market.