Inventory shortage continues to be the reccurring theme in the Bozeman real estate market. The months’ supply of homes is currently at an all-time low of 2.5 months. The demand from buyers remains strong, but the number of new listings coming to the market has been steadily decreasing. As such, we’re continuing to see multiple offer situations. In these situations, buyers that aren’t able to pay cash often lament their inability to be competitive. As I’ve done in years past, I thought it prudent to compare the percentage of cash sales over the years.

Looking at cash-only transactions: for sales of single family homes in all of Bozeman between January 1st and June 1st  of 2016, 90 out of the 377 homes sold were purchased with cash. That is approximately 23.9% of all sales. This nudged down slightly in 2017 to 74 out of 347 sales, or 21.3%. In 2018, 102 out of 386 sales, or 26.4% were cash purchases. This was the largest percentage I’ve seen since I’ve started tracking this number. This year, the percentage has dipped just a bit to 25.7%, or 88 out of the 343 sales. 

Even though it edges slightly up and down over the years, the percentage of sales is generally fairly consistent. In 2015, 85 of the 371 sales during the first 5 months were cash, or 22.9%. In 2014, it was 70 of the 318 sales, or 22% and in 2013, 61 of the 276 sales, or 22.1% were cash purchases.

The downtown area, which is attracting a lot of out-of-state buyers, has one of the higher percentages of cash-only transactions. Last year, 22 out of 71 single family homes purchased were bought with cash, or 31%. This year, 18 of the 56 homes sold were purchased with cash, roughly 32%. Looking at downtown condos, last year 16 out of 33 sales, or 48% were cash purchases. This year, 12 out of 33, or 36% were cash purchases. 

Buyers that don’t have cash that end up in multiple offer situations can still try to be competitive. At the end of the day, most people still prefer more money in their pocket, so there’s a good chance that a higher offer with financing could beat out a lower offer with cash, but not always. Buyers can also do their best to make their offer as attractive as possible by closely analyzing their contingencies and all the terms of their offer. We’re starting to see more buyers submit offers without inspection contingencies as an attempt to be competitive, and I’ve seen more than one seller choose a lower offer without an inspection contingency over a higher offer with one.  

As usual, I have included data for the number of single-family homes sold during the first five months of 2019. In addition to the 343 single family homes sold during this time period, another 187 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 Big Sky Country MLS and does not include private party sales, condominiums, or townhouses.