The Gallatin Association of REALTORS® recently compiled incredible data on the Gallatin Valley for their 2022 Gallatin Valley Housing Report. Several ERA Landmark associates and staff members were able to attend the presentation on the report which included, "data about demographics, rental information, housing sales and prices, housing finance information and more."
Many real estate experts found themselves in a crowded room with mortgage lenders, city officials, non-profit organizations, property rental managers, construction industry professionals, and many others eagerly interested in the report. "The report was funded by a grant from the National Association of REALTORS®, and additional funds were provided by the Gallatin Association of REALTORS® and the Big Sky Country Multiple Listing Service. A steering committee of key stakeholders representing real estate, banking and housing finance, planning, and government collaborated to create the report, which is supported by research from the University of Montana’s Bureau of Business and Economic Research."
Our Key Takeaways
With the help of our associate Mark Meissner, we've broken down some standout numbers that really caught our attention. The housing stock was evaluated by its maturity when each structure was built showing us that Bozeman has the youngest stock in Montana. Surprisingly, our latest decade of 2010-2019 built only 11% of our total housing, which shows a lower percentage of builds compared to previous decades. The surge in demand during these past 3 years has made this trend more apparent. There has been a large decline in newly created parcels from 2017 to 2021, which directly translates to less new construction hitting the market to sell. There are several factors affecting the creation of these lots including infrastructure challenges within city limits, outlier municipalities reaching max capacity for both independent water and sewer districts, as well as the overall increase in the cost of raw land, labor, and materials. For the first time in both 2020 and 2021, multi-family housing permits exceeded single-family residential. We expect to see this trend continue based on land availability and the need for developers to accommodate the higher density.
Residential housing stock by year built, Gallatin County, 2019.
Source: U.S. Census Bureau, American Community Survey, 2019.
Shifting gears towards the actual people living in the Gallatin Valley, there were many statistics on owner-occupied homeowners versus tenants. In the Gallatin Valley, the ratio of owner-occupiers was 61.2% to 38.8% of renters, which almost completely flip-flops for the City of Bozeman sitting at 43.1% of owner-occupied residents to 56.9% of renters. We can anticipate that percentage of renters to increase in the coming years. Just in this last year, we've seen an 11.1% jump in rent per square foot bringing the average up to $1.70. A 900 sq ft rental would equate to roughly $1,550 per month.
Average rent per square foot, Gallatin County, 2010-21. Sources: CoStar, Economic & Planning Systems, City of Bozeman.
One of the most fascinating takeaways is the percentage of commute distances for Gallatin County residents. of the 61,410 reported payroll jobs, 12,598 people (20.5%) commute greater than 50 miles for work. Looking at the percentage of renters and those commuting from further distances, we can conclude that we are seeing continued affordability issues with the core places of employment's cost of living being too high.
Gallatin County Commuters
The biggest realization of our market is that we are growing faster than what can be produced. We hope that the information we interpreted from this report is of value to you and your understanding of the real estate market. If you are interested in viewing the entire report, you can browse through the digital version provided by GAR. Whether you are interested in buying or selling property, curious to know the market value of your house or want a more in-depth analysis of this report, ERA Landmark agents are only a phone call away and are happy to help.
We know that having all the facts makes for a better real estate decision. We are dedicated to delivering comprehensive market insight resulting in the ultimate real estate experience. We analyze over 60 market trends and indicators on a monthly basis, so we can provide the most current info to you. We are a team of caring professionals with an unwavering commitment to the community and client-centered outcomes. Over the past 43 years, we have defined our reputation for expertise, integrity, quality, and service. We are where you want to be, with regional offices located in Bozeman, Big Sky, Livingston, and Ennis. We live here, we love it here, and we would like nothing better than to assist with your real estate needs in Southwest Montana.