Platinum Properties Releases Bozeman’s 3rd Quarter 2015 Real Estate Market Report
Posted by Platinum Properties — October 26, 2015
BOZEMAN, MT - The fall season is upon us and the Bozeman real estate market is undergoing a shift as dramatic as the fall colors, as exciting as Montana State (MSU) Bobcat football, and as unpredictable as the changing weather. The market splits in opposing forces at the $2 Million price range. Under a $2 Million list price, it is a Seller’s Market. Above $2 Million, and the buyers still have the upper hand. The market is so frothy and volatile in the $500,000 to $1.5 Million range that REALTORS® are more important than ever to help navigate and negotiate transactions.
We are noting market patterns as the 3rd Quarter of 2015 concludes: inventories continue to be pressured as they have through-out 2015, sales under $1 Million are robust, Days on Market (DOM) continue to shrink so buyers need to be prepared to act immediately, and land is holding steady in the level of inventory and units sold but it is increasingly difficult to find really good land. Much of what is on the market, both in land and homes, has issues of one sort or another.
This market report, prepared by SU Platinum Properties, is compiled from Gallatin Association of REALTORS® and Southwest Montana Multiple Listing Service data for Areas 1 (Bozeman city limits) & 2 (surrounding Bozeman area). The report focuses on the properties priced $500,000 and above, and vacant land of 5 or more acres meant for single family residences. Private sales are not included and the information may have discrepancies due to reporting.
185 properties have closed this year, which represents a 413% increase from the 36 properties that had closed at this time in 2014. The North and South of Bozeman are fairly close in actual closings, with 38 reported on the North side, and 43 on the South. Area 1, Bozeman city limits, has 58 closings for the year, which represents 33% of all properties sold. Buyers are wanting to be close to downtown Bozeman! Average DOM for Area 1 homes in the $500,000 to $750,000 range has dropped to an amazing low of 82 days, with 48 closings in this price point and only 28 current listings.
To date, in Areas 1 & 2, homes priced $500,000 and above, there has been $135,228,706 in closed transactions, with homes averaging 94.5% of their list price. This is a 35% increase over the same time frame in 2014, in which $99,628, 881 was recorded. 39 homes priced $750,000 to $1 Million have closed this year, a 129% increase over the 17 recorded at this time in 2014. In both 2014 and 2015 homes in this price range are holding strong at 95% to 96% of list price to sold price.
The South Side of Bozeman leads the market with actual dollar amounts of closed transactions, with $41,186,000 in transactions, representing 30.5% of the total volume. The City Limits is a close second, with 30% of the volume. The North Side, with lower average prices paid for individual homes, has 20% of the volume with only 4 fewer closings than the South Side, and Bridger Canyon is posting only 8.3% of closed transactions to date. Bridger Canyon has $15.5 Million in pending sales, which is 137% increase over its existing $11,242,000 volume. We fully expect that pending sales will change the stats for the year end as there are 48 properties under contract with a $51,499,510 combined list price. 27 of these are priced $500,000 to $750,000. Seven are between $750,000 and $1 Million, while 11 are listed for $1 Million to $2 Million. Three are for homes in excess of $2M, with one over $6 Million. We anticipate even more homes going under contract as buyers are arriving in Bozeman seeking property each week. The top high-end agents are heavily booked in October. Many of the buyers are coming for their 2nd or 3rd tour of properties, thus greatly increasing the odds that they will write a buy-sell.
It’s a Seller’s Market!
The strength of today’s Bozeman real estate market is homes priced $500,000 to $750,000. This price point is a very strong Seller’s Market. 119 of the 185 closed transactions are in this price bracket, representing 64.5% of all transactions. There are currently 72 listings between $500,000 and $750,000 with an average of 111 DOM. If a buyer likes a home, they are best served to make an offer, as quality properties are going under contract, many with multiple offers, on the day they are listed.
Properties in the $1 Million to $2 Million range are doing well, posting a 92% increase in units sold, with 25 closing to date, compared to 13 at this time in 2014. The South Side of town has 8 closings in this range, inside Bozeman city limits has 7, while Bridger Canyon has had 4 closings $1-2M. There are currently 47 properties listed between $1 Million to $2 Million, which is an 11% decrease from 3rd Quarter 2014.
Sales have decreased by 42% compared to 3rd Quarter 2014 for properties priced over $2 Million, with only 4 properties closing this year. The highest recorded closing, at $3.9 Million, is for a 233+/- acre tract of land adjacent to state land in the South Side with an insignificant home. The other 3 sales are all on the South Side for homes right at the $2 Million price point. Each of these properties were significantly reduced from their original asking price.
Inventory is challenging if you are seeking a home. As of Sept. 30th, 175 homes priced $500,000 and above are listed for sale, compared to 220 listed at the end of the 2nd Quarter 2015, a 20% drop in inventory during a time period that has enjoyed a 45% increase in sales.
Inventory Down/Sales Up = Classic Supply and Demand
Quality, well-priced homes with a key amenities (good design and use of space, desired materials, views, privacy, location) are going under contract within days—if not hours—of being listed while certain properties have not sold due to a number of factors: uniqueness of the home’s style, priced above current market values, need to renovate, location, lack of privacy or view.
We have a backlog of clients seeking their special home which has yet to come on the market. The tides have turned, and we are now firmly in a Seller’s Market if the house is priced right and is a quality home.
SU Platinum Properties has been enjoying continued success with closings. Between being Sellers’, Buyers’, and Dual Agents, we have participated in close to 20% of the total volume of sales for 2015 for single family homes priced $500,000 and above in Areas 1 and 2. We continue to be involved in the tops sales in Bridger Canyon, Bozeman city limits, North and South sides, and Gallatin Gateway. Our clients write glowing testimonials of the service and expertise we provide. Call us if you are thinking about listing your home! We have buyers. Call us if you are seeking your next home or land to build on. We know the inventory. We specialize in making transactions be positive experiences for all parties.
Note: If you remove the $500,000 to $750,000 tracking from 3rd Quarter 2015, the total Inventory listed is 103 units compared to 147 units 3rd Quarter 2014, and units solid is 66 units compared to 36 units at 3rd Quarter 2014.
Vacant land for single family residences on 5 or more acres continues to inch upward, with 39 closings by September 30th, an increase of 69.5% over 2nd Quarter 2015 sales of 23 parcels. Approximately 892 acres have closed in 2015, averaging $16,508 per acre. Bridger Canyon, Trail Creek, and both the North and South side of Bozeman have 7 to 8 closings a piece, with all but Trail Creek in the $3.25 Million to $3.38 Million net sales range. Trail Creek, with 29 listings and 8 closings for the year, remains the spot within the Bozeman area to find bargains.
There are 155 parcels listed, with 47 listings for 20 to 30 acre tracts and only 15 listings for 5 to 10 acre parcels. If you want a large tract of land, the further reaches of Bridger Canyon and Gallatin Gateway have the most offerings, with Gallatin Gateway prices ranging from $4,000 to $17,500 an acre for tracts over 40 acres while Bridger Canyon goes from $10,000 to $32,000 an acre.
Bridger Canyon, with 41 listed tracts, has the most available number of listed lots. There are 31 listings on the North Side, 29 in Trail Creek, and 25 on the South Side. Bridger Canyon has 8 closings at this time, with sales totaling $3,325,000. The largest recorded sale, in which SU Platinum Properties acted as Dual Agents, is a 38 acre parcel which closed at $29,632 an acre, the highest per acre price paid in Bridger Canyon. The highest price paid per acre for single family land this year is $59,817 for a tract along the East Gallatin River that had an existing home foundation, well and septic installed.
We know land in Gallatin Valley is finite. Of the 35 listings between 10 to 20 acres, 6 of them are priced at over $45,000 an acre. A 20 acre parcel in Old River Farms is listed at $57,673 an acre. Prime land will become increasingly expensive. If you are considering purchasing land, there is no time better than now.