I usually don’t include numbers for the sale of condominiums in the area, but this month I thought it noteworthy that condo sales increased dramatically this year. 164 condos sold during the time period of January 1st through October 1st of 2011. Compare this to 131 in 2010 and 110 in 2009, and it reflects an increase of 25% and 49% over the respective years.

Part of this increase is due to an increase of investors re-entering the market and picking up condos to use as investment properties. The rental market has increased over the past few months and most investors have reported filling residential properties more quickly and at higher rents than in the past few years.

Another reason for the increase in condo sales is that parents of MSU students returned to the market over the spring and summer; snapping up homes, townhomes, and condos to house their children while attending MSU. Many find the idea of paying down a mortgage more attractive than rent.

An additional observation of the market is that cash purchases are increasing. During the time period of January 1st through October 1st of 2005, cash purchases accounted for approximately 19% of the total residential sales in the greater Bozeman area. During the same period of 2011, cash purchases accounted for approximately 31% of the total sales.

Many of these cash purchases were in the condo market, as condos have become more difficult to finance as lenders scrutinize the financial health of the condominium homeowner’s association more closely. For homeowner’s that are part of a condominium HOA, it is important now more than ever to be active in the HOA and take steps to insure that buyers are able to obtain financing for units within the association. The ability of new buyers to obtain financing for certain condo projects has had a direct influence on their salability.

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 Southwest Montana MLS, and does not include private party sales.

Tim Ford – REALTOR©