Community News

Vacant land sales have been basically stable in Bozeman, Belgrade, and rural Bozeman for the first six months of this year.  In 2011, 93 building lots closed in comparison to 94 in 2010, but far off the pace of 2007 when we saw nearly double that amount of sales. The median sales price of a lot in Bozeman has declined 12.5% from the previous year to $46,650. In the rural area surrounding Bozeman, the median is down 5.9% to $80,000. Though we have seen very little speculative construction, there are new housing starts in many developments in the northwest sector of Bozeman and west of town, including Loyal Gardens, Black Bull, Northern Lights, Gallatin Heights, Middle Creek Parklands, Baxter Meadows, and Valley West.

The West Edge Condominiums are a good example of a new home construction project that appeals to income levels often not served by homeownership projects. These homes were constructed at the corner of Cottonwood and Fallon and recently enjoyed their ribbon-cutting ceremony. According to the HRDC website, “the Montana Department of Commerce awarded Gallatin County over $6 million through HUD’s Neighborhood Stabilization Program. Funding was used to acquire a 23-unit foreclosed property and construct 36 new affordable housing units. A large portion of these units are available for purchase by households earning less than $30,000 per year.” Phase I homes range from 820 to 1,052 square feet and are priced from $95,000 to $102,000. Amenities include granite countertops, gas fireplaces, stainless steel appliances, and Trex decking. Phase II homes are 870 to 1,229 square feet with prices ranging from $96,000 to $108,000. Features such as Energy Star appliances, private patios, birch trim, and cabinetry are standard.  

Another project to make note of is Norton Ranch Homes which has broken ground at Waterfall Avenue in Bozeman’s newest development, Norton Ranch, near Cottonwood Road. Single-family homes in this new neighborhood offer single-story and two-story models all with 2 car garages and will be attractively priced between $185,000 and $225,000.

A healthy new construction market leads to job creation and a stronger overall economy. According to a quote from the Southwest Montana Building Industry Association (SWMBIA), the construction of 1,000 single-family homes generates 2,448 jobs in construction and construction-related industries; approximately $79.4 million in wages; and more than $42.5 million in federal, state, and local tax revenues and fees. Although we are nowhere near the peak of new construction in the Gallatin Valley, the hail storms of 2008 and 2010 have continued to supplement the building industry.  

Looking at the number of building permits issued by the City of Bozeman is another way to track how the residential building market is fairing. In June, there were a total of 29 permits issued for new housing units which brings the year-to-date total to 89. This compares to 138 housing unit permits through the end of June 2010 and 111 in 2009. Just for comparison's sake, since tracking started in 1983, the fewest permits issued year to date were for 8 housing units in 1987 and the most was 437 in 2007.  

Gallatin County does not issue building permits for homes constructed outside of the city limits; however, a Land Use Permit is required prior to the construction of most structures within the County’s zoning district, and in many districts a Certificate of Completion/ Occupancy must be issued by the County Planning Department prior to occupying the home.  Utility Solutions, which provides water service to North Star, Middle Creek Parklands, Gallatin Heights, and Black Bull, reported an increase of 83 hook-ups from January 2010 through June 2011.  

National statistics for 2011 show that residential housing starts have been down compared to the same month in the previous year. This is mainly due to the fact there is a high number of foreclosures in many markets which leads to a glut in inventory and a decrease in the value of existing homes. This decrease in single-family starts might help shrink some of the existing housing inventory and stabilize housing prices. On the other hand, there are some markets where new home construction would be desirable given the very low levels of home construction and decent local economy, but often builders are being held back by the difficulty in obtaining construction loans.