As a specialist in high-end real estate in Bozeman, Montana, I am frequently asked, “Has the real estate market hit bottom?” It’s a tough question to answer without having a direct line to the future. However I can address the current market in luxury Bozeman real estate, in which a home priced above $750,000 is considered to be “high-end.”
Bozeman is a small, select market area, with two areas within the Gallatin Valley considered “prime.” Land seems infinity due to the Big Sky, the vast acres of ranch and farmland, and the 5 bordering mountain ranges with thick forests and Blue Ribbon trout streams. But, in actuality, land is at a premium. Much of the land is either owned by someone not wanting to sell, held in Conservation easement, unable to be sub-divided, or owned by the state or Federal government. Location in Bozeman does matter as it directly influences a person’s way of life, and there is very little land to choose from, which means land prices are high and stable.
Bozeman has experienced peak periods of people moving to the valley. I’ve been told that today only 3 out of every 10 people living in Bozeman are born in Montana. The years 1999 to 2004 brought in the last large influx of newcomers. These people were not relying on Bozeman for their livelihood. They relocated here for lifestyle, purchased much of the remaining choice acreage, and custom built their dream home. Now, their youngest child is off at college and they want to downsize, or they dream of living in the desert or on the coast–any number of reasons have caused them to put their home on the market, but, generally, it is not financially driven in the sense of them having to sell. Only a couple of luxury homes have gone into foreclosure in Bozeman since the 2007/2008 downturn.
There are currently 121 homes listed on MLS for $750,000 and over. In the past 12 months, 21 homes have sold over $750,000, with 10 being over a million dollars and only 3 over $1,500,000. This has lead some sellers to decide they just want to get rid of their home, and so they are emotionally driven to slash their prices rather than financially compelled. It is far tougher to gauge a market driven by emotion rather than stats and comps. What will a seller accept as an offer? What is a home worth? My answer has grown repetitious, “In this market, you never know what a seller will accept until you begin the dialogue by making an offer in a buy/sell contract.” Many sellers here can—and will—sit on their valuable properties until the inventory has noticeably shrunk and a buyer acknowledges the home’s worth. Others just want to move on with their lives. So, has the market hit bottom? I have no idea, but I am daily working to help structure deals in which both the buyer and seller feel good about the transaction. It is property-by-property, with few comps and no solid answer. There are deals to be had, and beautiful properties for sale.