Warm summer weather is bringing a cooling effect to Montana’s real estate market.
“The market feels a little lukewarm right now,” said Brian Huskey of Billings, Montana. Times American Real Estate agent. “Buyer demand remains modest, but many are now just sitting on the sidelines as housing affordability and interest rates play a large role in people’s decisions.”
In Billings, 90-day average altos research corp. As of July 19, 2024, the Market Action Index score was 38.77, slightly lower than the 44.48 recorded a year ago and the 51.72 recorded in July 2022. The metro area reported a Market Action Index score of 75.42. Altos considers any market with a Market Action Index above 30 to be a seller’s market.
While the market has since cooled off, Billings’ decline in Market Action Index scores has been quite modest compared to other pandemic housing hotspots like Austin, Texas, which dropped from a high of 100 in June 2021. down to 33 by mid-July 2024.
Huskey attributes the relative stability of Billings’ real estate market to the fact that it’s more of a working-class community with a stable job market.
“We have a lot of stable jobs in the big refineries and in the medical field, and with that comes stability in the housing market,” Huskey said. “We’re not seeing as much market volatility as we are in more luxury secondary housing markets like Bozeman.”
Charlotte Durham is a Bozeman company leader, Sotheby’s International Realty-Brokered charlotte durhamdoesn’t necessarily say her local real estate market has experienced huge swings, but she says it has definitely cooled down.
“This is the slowest June in our market in years,” said Durham, an agent specializing in luxury goods. “We’re seeing an improvement after July 4, but it’s still slower than what we’ve seen in the market probably since before COVID-19 hit.”
Overall, the Bozeman real estate market’s Market Action Index score has dropped from 66.88 in early June 2021 to a 90-day average of 32.38 in mid-July 2024. Homes between $1.38 million and $1.38 million. of 44.75 dropped to 29.74
This slowdown is a boon for buyers still in the market.
“Especially in the $2 million to $5 million range, there’s quite a lot of inventory on the market right now, which is great property,” Durham said. “So, I think we’re going to have to see prices come down a little bit, especially in this price range.”
Altos data shows the 90-day average median list price fell $300,000 to $1.2 million compared with a year ago. At the upper end of the $2.835 million-plus market, list prices have dropped in recent weeks, from $3.6 million in mid-April to $2.9 million in mid-July.
Agents say the lower price tag is too low for sellers to accept.
“The market is definitely better than the summer of 2022, but still similar to the summer of 2022,” Keller Williams Northwest Montana– Brokerage team Montana Hidden House Hotel, explain. “Prices have been rising and are now starting to come back down. We are seeing more price reductions in the market but some people are a bit scared that if a property has a 90-day lease instead of 45 days like most properties, they will The price will be lowered to get ahead of other properties.”
However, Baumgartner said the increase in days on market doesn’t really bother him.
“It’s a more standardized market,” he said. “Inventories are up a little bit, not as high as they were in 2019, but better than they were and still a little bit of a seller’s market, so we’re moving toward a balanced market.”
Statewide, Altos data supports Baumgartner’s assertion. The 90-day Market Action Index in mid-July was 33.66, indicating a very slight seller’s market, and the 90-day average of active single-family listings has risen to 3,258, the highest level since mid-March 2020 amid the COVID-19 pandemic.
While rising inventory is good news for buyers, there’s no denying that home prices in the state have risen significantly over the past five years. In late summer 2019, Altos data showed that the median 90-day average list price in Montana was hovering around $390,000. As of mid-July 2024, it has risen to $725,000.
Statewide, brokers attribute sharp increases in home prices to the pandemic homebuying boom and the rapid influx of out-of-state buyers flocking to Montana. While the influx of out-of-state buyers does help boost property values in the state, agents say it creates challenges for locals looking to buy.
“This is not just a controversial issue,” Baumgartner said. “This is bad. Montanans are very proud of this state and owning property here, but most people can’t afford a home right now. Inflation is too high, and with what most people are making in government jobs, you You have to have about three jobs to buy a house, unless you’re in a high-paying industry.
Robyn Erlenbush ERA Landmark Real Estate Bozeman agents have also seen the rapid appreciation of home prices take a toll on local clients.
“When Bozeman was rediscovered, there was an influx of people carrying cash, if you will,” Allen Busch said. “So, all of a sudden, competition increases, prices go up, and then interest rates go up, and it’s a perfect storm of ingredients that puts local buyers in a bind. I know someone who ended up buying a house in Bozeman, 90 miles from their job, because They can’t afford anywhere closer.
Local agents say some buyers may gain an advantage if interest rates fall in the coming months. But this may be short-lived.
“This is an election year, and people tend to be a little uneasy because they don’t know what’s going to happen. But if interest rates come down a little bit, we’re going to have a strong fourth quarter regardless of the election outcome. There’s going to be a lot of people.” Want to buy or sell. Anything above $1 million will probably still be a little slower, but anything below $1 million, I think we’ll see some multiple offer situations that will look interesting.
