Community News

 I was reading an article earlier this month on Realtor.org entitled “Nearly Half of States Within Reach of Peak Home Prices.”  It summarized that through October 2013, twenty-three states are now close to reaching the peak sales prices that were witnessed in 2006.  Furthermore, sixteen of those twenty-three states have actually come within 5 percent of the 2006 numbers.  Montana is included in that category. In regards to the levels of home appreciation causing this trend, the five states leading the way are Nevada, California, Georgia, Michigan, and Arizona.  In fact, only one state – New Mexico- experienced a decline (.5%) in price from the prior year.  Interestingly though, while Nevada and Arizona are appreciating at 26% and 14% respectively, they are still two of the five states that are furthest from the 2006 peak prices.

This information piqued my interest, of course, to start digging through our local numbers and see what type of correlation there might be to the national trends. It appears that our region has recovered quite nicely, and although we are not quite as close to “Peak prices” as our state in general, we also need to recognize that our prices were some of the highest in the state during the “Golden Years” of 2005-2007. We normally think that 2005 was the heyday of single-family home sales in terms of the number of units sold, and this figure turned out to be true in these areas: Bozeman city limits, Bozeman surrounding area, Manhattan/Three Forks, and Park County. However, the most fascinating information comes in the form of how we have returned to a sense of normal in terms of sales. If we pull units sold for the above areas through December 23 of this year, there were 482 sales in the Bozeman city limits with 12 more units scheduled to close prior to the end of the year which puts us above the 2005 peak sales figure of 479 units. There are currently 338 closed in the Bozeman surrounding area versus 337 in 2005, 104 in Manhattan/ Three Forks topping 91 sales in 2005, and 184 in Park County which is still below the 2005 maximum of 274 sales. Belgrade topped out in 2006 with 283 sales and closed 236 in 2013. All of these areas should experience further closings by the end of the year as well. 

In terms of median sales price, the numbers peaked in 2006 for Bozeman city limits at $309,500, Bozeman surrounding area at $415,000, and Manhattan/ Three Forks at $253,950.  Belgrade showed the highest numbers in 2007 at $238,750, and Park County peaked in 2008 at $228,400. This year’s numbers through December 23 weigh in at $277,805 for Bozeman city limits (10% less than the highest median), $355,000 for Bozeman surrounding area (-14%), $195,000 for Belgrade (-18%), $218,555 for Manhattan/ Three Forks (-14%), and $186,250 for Park County (-18%).  These numbers have improved steadily over the past three years, and we should see prices at or near peak sometime in 2014 for most segments of the lower and mid-markets. 

When we break down the numbers further and isolate the high-end market, defined as single-family homes with sales prices at  $1 million and above, we see that 2005/ 2006 were peak years in that demographic as well.  The Bozeman surrounding area’s high point came in 2006 with 23 sales at a median price of $1,500,000.  After several declining years, we are currently back up to 17 sales so far this year at a median price of $1,450,000. Belgrade and the surrounding area actually topped out at 6 sales in 2007 at $1,275,000, but after declines and even three years with no high-level sales at all, 2013 is now at 3 sales with a median price of $1,350,000.  Park County reached 8 sales in 2005 and has sold 2-4 properties per year since that time. There have been 3 sales in 2013 with a median of $1,600,000.  Big Sky posted amazing numbers in 2006 with 34 sales at a median of $1,760,500 and has seen much new activity with 16 closed sales this year at $1,469,500 with record sales reported from the Yellowstone Club, which are not included in these numbers. Although this segment of the market is improving, there is still an over-supply of existing inventory, based on buyer demand, of properties in excess of $1,000,000. 

2013 has been a very robust year for real estate sales, with appreciation in most segments of the market. As we move into 2014, there is much anticipation that buyer confidence will continue to be strong.  The first quarter of the year will bring more definitive news of resorts, second homes, and luxury properties.  Look for more detailed final year-end updates next month. Happy 2014… wish you health, happiness, peace, and prosperity in the coming year.