Bozeman’s real estate market has seen some fascinating shifts over the past few years, particularly in the realm of cash transactions. Despite widespread predictions of a significant drop in mortgage rates in 2024, this has yet to materialize. Meanwhile, cash transactions have remained robust and, in certain areas, have even reached new record levels.

Looking at single family home sales both inside and outside of Bozeman city limits from January 1st to June 1st:

Back in 2019, about 25.7% of sales, or 88 out of 343, were cash transactions. As we navigated through 2020, the percentage dipped to just under 20%, with 62 out of 311 sales. Then came 2021, a year marked by a significant leap: 103 out of 341 homes, or just over 30%, were bought with cash. The peak arrived in 2022 with an impressive 39%, equating to 105 out of 268 sales. Though last year and this year saw a slight decline from that peak, they are strikingly similar and remain above the pre-pandemic average. In 2023, 32.2% of transactions (82 out of 254) were all-cash deals, closely followed by the first five months of 2024 with 32.4% (83 out of 256).

Historically, the percentage of cash sales hovered in the low 20% range, displaying consistency despite minor fluctuations. For instance, in 2015, 85 out of 371 sales (22.9%) were cash, while in 2014, 70 out of 318 sales (22%) and in 2013, 61 out of 276 sales (22.1%) were made in cash.

Downtown Bozeman,
A Hotspot for Cash Buyers
The allure of downtown Bozeman continues to draw cash buyers, as the area has consistently reported a higher percentage of cash transactions. Again, looking at single family home sales in the time period of January 1st through June 1st, in 2019, 32% (18 out of 56 homes) were cash purchases. The following year saw a rise to 39% (20 out of 51 homes). By 2021, 44% of sales (22 out of 50 homes) were cash. 2022 was again a big year, with 45% (19 out of 42 homes). It dipped slightly in 2023 to 34% (13 out of 38 homes), but surged again this year, setting a record with 51.2% (21 out of 41 homes) of downtown single family home sales made in cash.

Drilling Down,
Downtown Condos
Drilling down into the downtown condo market, the trend of cash purchases is again notable. In 2019, 36% (12 out of 33) of condos were bought with cash. This nudged up to 37.5% (9 out of 24) in 2020, before slightly dipping to 33% (10 out of 30) in 2021. The year 2022 saw a significant rise, with 44% (17 out of 39) of condo sales being cash transactions. Despite a drop in total sales to 29 in 2023, the cash purchase rate increased greatly, to 62% (18 out of 29). This year saw a similar trend, with 60% (15 out of 25) of downtown condo sales being all-cash deals.

A Closer Look at 2024
As usual, I have included data for the number of single-family homes sold during the first five months of 2024. 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, condominiums, or townhouses.