Year End Market Report 2020

Tim Ford  |   Sunday Jan. 31st, 2021

Wow! What a year it’s been. A pandemic, an election, and a real estate frenzy in the Gallatin Valley. When the pandemic first hit, a lot of people, myself included, wondered if it would negatively affect the real estate market. In fact, the opposite proved to be true.

The number of single-family home sales in and around Bozeman rose almost 14% from 996 last year to 1,133 this year. I would argue that number would have been even higher if there had been more inventory for buyers to choose from. The lack of inventory led to even more bidding wars than Bozeman has seen in past years, causing prices to rise considerably.

Even with the increased activity in the market, there were actually slightly fewer homes to choose from. 1,188 single family homes were listed for sale on the MLS in the greater Bozeman area this year, versus 1,240 listed last year, and 1,227 listed in 2018. This compares to 1,180 homes listed in 2017, and 1,298 in 2016.

Looking at homes both inside and out of city limits: In 2019, the 996 single-family homes sales saw a median sold price of $495,250. That number rose an astonishing 19.6% to $592,000 in 2020.

Restricting the data to homes sold just inside Bozeman city limits, last year 592 homes sold at a median sold price of $460,000, a 7.6% increase in pricing over the 609 homes sold in 2018 at a median sold price of $427,500. In 2020, the median sold price for the 612 single-family homes sold within city limits rose 17.4% to $540,000.

Buildable dirt inside Bozeman city limits has essentially disappeared. Earlier this year, there were quite a few subdivision lots for sale within Bozeman city limits. As the market activity ramped up in late spring and into summer, almost every lot was snapped up. 107 lots sold in 2020, with the vast majority (99 of 107) going under contract by August. As of the date of writing this article, there are 2 lots for sale within Bozeman city limits, both listed for around $350,000.

After remaining fairly low for the last 2 years, the months’ supply of homes dipped even lower. From 2018 through 2019, it hovered between 2.9 and 3 months. This year, it dipped down to 2.1 months. This is the number of months it would take to sell the current inventory of homes on the market. Some often consider a “healthy” or “normal” market to have somewhere between 4 and 5 month’s supply. A higher number represents a buyer’s market while a lower number represents a seller’s market.

Of particular interest is how the upper end market has been affected. The number of homes sold for more than $1 million nearly doubled, from 77 homes sold last year to 149 in 2020. Looking at the even higher end market, home sales north of $2 million almost tripled. In 2019, only 11 homes sold for more than $2 million while 2020 saw 32 closed sales.

The included data reflects sales of homes 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 Big Sky Country MLS, and does not include private party sales.

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