The Real Estate Market in Bozeman continues its streak, with prices increasing, low inventory levels, and more multiple offer situations. Many are even starting to ask if prices and activity levels are rising too quickly.

The average days on market, currently at 88, is really not indicative of how fast appropriately priced properties are selling. A few outliers are keeping that number misleadingly high. Of the 368 homes sold between January 1 and July 1 of 2013, 178 homes sold in 30 days or less, and 138 homes sold in 2 weeks or less. The median DOM is currently 32 days on market.

Some of the inventory problems are being created by the fact that many homeowners are still underwater, or owe more on their home than it is worth. While many of these underwater homeowners once looked at the short sale as a viable option, more are now just holding on until the market returns to a point where they can sell and break even. With the rate that prices are currently rising, that may not be too far into the future.

Many underwater homeowners are buying a new home and holding on to their current home as a rental until prices increase sufficiently. This creates supply problems as buyers take homes from the inventory without adding homes to it. My personal opinion is that prices will continue to be pushed higher by the lack of inventory until they reach or break above peak pricing levels, which will afford those currently underwater the ability to sell.

Interest rates have ticked up somewhat, but are remaining volatile, sometimes moving as much as a half percent or more within a few days. By the time this article goes to print, they could be back down again, or could be even higher. Regardless, the rising interest rates have yet to slow the market down. Some buyers have found that they can no longer afford what they could a month or two ago, but the market seems to be pushing through this as it has yet to deter many other buyers who still find attractive homes in their price range.

As usual, I have included data for the number of homes sold during the first six month of 2013. In addition to the 368 homes sold during this time period, another 173 homes are currently pending, or under contract, as of the date of writing this article.

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, Condominiums, or Townhouses.

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