As we pass the halfway mark of the year, it’s an opportune moment to review the real estate market in Bozeman over the past six months.

Supply Side Analysis

After several years of decline, the number of new listings has increased. From January 1st to July 1st, 608 single-family homes were listed for sale in the greater Bozeman area. This is up from 548 new listings last year and 585 homes in the same period of 2022. While this year’s figure exceeds the 592 listings of 2021, it is still below the 649 homes listed in the first half of 2020 and the 722 in 2019.

These figures reflect a 10% decline in new listings from 2019 to 2020, followed by another 9% decline from 2020 to 2021. In 2022, the decline was more modest at 1%, but last year saw a further 6% drop. This year’s increase marks a 12% rise from last year, although it remains 15% below 2019 levels.

Sales Performance

Despite the rise in new listings, sales numbers have slightly decreased from last year. In the first half of this year, 322 single-family homes were sold in and around Bozeman, compared to 344 sales last year and 348 in the first half of 2022. Sales in 2023 followed a declining trend similar to the number of new listings from 2021 and 2020, when 434 and 435 homes were sold, respectively.

Pending transactions are also down compared to last year. Currently, there are 92 pending single- family home sales, compared to 113 last year, and 100 the year before. This is a notable decline from the pandemic years, when there were 156 pending sales in 2021 and 230 in 2020.

Median Sold Price Trends

After a decline last year, the median sold price for single-family homes has risen this year, both inside and outside city limits. In the first half of each year, median sold prices climbed 37% from $523,317 in 2020 to $715,000 in 2021, and another 26% to $900,000 in 2022. Last year saw a slight 2.7% decrease to $875,000, though this was still 22% above 2021 prices. This year, the median sold price increased by just over 8% to $948,950.

Homes outside city limits tend to be more expensive. Restricting the data to single-family homes inside city limits, the median sold price increased by 42% from $477,750 in 2020 to $678,400 in 2021, and by another 18% to $800,000 in 2022. Last year, this number decreased by 5% to $760,000. This year, the median sold price inside city limits is up almost 4% from last year at $789,000, slightly below 2022 levels.

Market Dynamics

The month’s supply of homes for sale, a measure of how long it would take to sell all current listings, has increased towards pre-pandemic levels. Generally, anything below a six-month supply is considered a seller’s market, while anything above is considered a buyer’s market. Starting around 2017, it consistently hovered around three months. In 2020, it dropped to around and below one month, and remained there through 2021. It increased slightly to around three months in 2022, and has risen to around 4.5 months this year. Some consider a “normal” or “healthy” market to have a five-to-six-month supply of homes.

The median days on market has also returned to pre-pandemic levels, but is slightly down from last year. In 2021, the median days on market plummeted to just five days, down from 25 days in 2020, and 23 days in 2019. It continued to fall to four days in 2022. Last year, it increased to 21 days, but this year it has decreased slightly, to 17 days.

Interest Rates

Interest rates remain volatile, and should be monitored frequently by serious buyers. At the beginning of the year, many anticipated that 2024 would see interest rates drop below 6%, but this has yet to materialize. Currently, they are slightly up from recent averages, hovering around 7%, depending on factors such as down payment and credit score.

The included data reflects sales of homes in the greater Bozeman area, including Four Corners, Gallatin Gateway, Bridger Canyon, and within 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 townhomes.