Nationwide, the S&P/Case-Shiller index indicates that home prices have risen 3.6% from last year. Using median homes prices to look locally, in Bozeman, the median home price for homes on both less than and greater than 1 acre including areas outside the city limits, rose from $252,000 in 2011 to $275,550 in 2012, a 9% increase. If we restrict that data to just homes within the city limits on less than 1 acre, the median home price rose from $237,750 in 2011 to $254,500 in 2012, a 7% increase.

I do believe these numbers for Bozeman are somewhat misleading and show the flaw in using median sold prices to show how individual home prices are trending. The median home price is one of the easiest numbers to determine, and as such is often used to try to determine how home prices are moving. However, it’s definitely not a perfect science as it doesn’t take into account the type of home, nor is it an exact representation of what the change in value of an individual home may be.

While I strongly believe that home prices in Bozeman are trending upwards, I feel that our current gain over last year is somewhere closer to 4% or 5%. If we restrict the data even further and limit it to the most common size of home sold, those being between 1500 and 2000 square feet: from January 1st through December 1st of 2011, 81 such homes sold inside Bozeman city limits with a median sales price of $217,000. For the same time period of 2012, 122 such homes sold with a median sales price of $228,925, an increase of 5.5%.

The good news is that both home prices and the overall number of sales continue to rise in Bozeman. Sales have stayed steady even as we begin winter, and 2013 looks promising. Watch for my article next month when I will have the year in review for 2012.
The included data reflects sales of homes on both less than and more than one acre in the greater Bozeman area, including Four Corners, Gallatin Gateway, Bridger Canyon, and Bozeman city limits. The data includes home sales reported through the local Southwest Montana MLS, and does not include private party sales, Condominiums, or Townhouses.

Tim Ford is a Realtor ® with Vellinga Real Estate in Bozeman Montana. He can be contacted at 406-209-1214.