Bozeman, MT, Real Estate Market Forecast 2023

Bozeman’s mountainside allure and community-minded energy have piqued the interest of several buyers across the country. However, with growing demand in this city and insufficient supply to support it, rising prices may continue into 2023. Additionally, with national trends of increasing interest rates and inflation, homes will become difficult to buy. Before diving into the 2023 forecast, here’s what you need to know about the current Bozeman housing market.

For a quick understanding of what’s happening in Bozeman today, review the statistics below. Then, read on for a detailed explanation of what these numbers mean for you.

 

 

Bozeman is currently a seller’s market, although following the trends of the rest of Montana and the US, market conditions aren’t as skewed toward sellers' favor as in 2021. This is indicated in the number of homes for sale, which has increased since last year. However, the rise of remote workers has bolstered the already growing population, affecting locals and new residents alike. The cost of living in Bozeman is 20% higher than the national average, and with median income not keeping pace, this is causing problems for home buyers in Bozeman.

The population growth and rising prices are indicated in Bozeman’s median list price, which is much higher than Montana’s median home value of $445,017. Increasing interest rates and higher monthly mortgage payments also make buying Bozeman luxury homes an exclusive venture. Given the rising prices and inadequate supply, as well as Bozeman’s desirable location near outdoor recreation and nature views, properties in the area have a high yearly appreciation rate, adding to rising prices in the area.

Bozeman real estate will likely continue to appreciate like the rest of Montana properties, although at a slower rate than seen previously. With buyers still interested in properties in the area but with insufficient supply, they may start looking to areas outside Bozeman, like Great Falls. Population growth in the area has increased by 10% in the last decade, outpacing the housing supply, which only grew by 7%. Without more home growth, Bozeman may become an area that’s only attainable for those searching in luxury markets.

Although prices in Bozeman are still high, list prices are being impacted by higher interest rates. This slight dip is likely the market correcting itself rather than an indication of a crashing market. By cooling demand with higher prices, the rate that home prices increase in Bozeman will start flattening out, which will help buyers in the area searching for homes. Despite these factors, housing costs will still be high.

Buyers in 2023 will face a few hurdles when searching for homes in Bozeman. Firstly, average mortgage rates in Montana are 6.52% for a 30-year fixed mortgage and 5.69% for a 15-year fixed mortgage. If these rates continue into 2023, which they likely will, it may be more difficult to buy a home, especially given Bozeman’s cost of living and median home price.

It’s not all bad news for buyers; Bozeman has more inventory than in the past year. Additionally, as the market begins evening out, buyers will have more opportunities to find properties that meet their needs. Even with the cooling market, properties in Bozeman are still good investments, ensuring that your purchase is well worth it five or 10 years down the road. To best navigate the local market, work with experienced agents who know the area, like Joy Vance.

Sellers in 2023 will benefit from Bozeman’s seller’s market. Lower inventory and higher demand are likely to continue through the next year, which puts sellers in a good position to receive high offers on their property. Bozeman is a desirable town for several reasons, and those wanting to live closer to work or near natural attractions will be searching for homes for sale like yours.

Sellers who wait until 2023 shouldn’t worry about rumors of a crash in the housing market, as supply still favors sellers. However, they should consider the effect of rising interest rates and inflation on buyer demand. Despite low inventory, unaffordable properties may continue to dampen market activity, which will be felt in your home’s sale. Keep this in mind when thinking about the new year.

 

Investors that are already established in Bozeman can expect to continue benefiting from the area’s perks and demand into the new year. The median rent price in Montana has increased by $250 since last year, and with buying a home unattainable for some people in the city, renting has become an alternative for locals. The growing population of Bozeman will likely only increase demand for these types of properties.

Investors looking to establish themselves in Bozeman in 2023 will experience many of the same challenges as buyers. It may be difficult to break into the housing market, given Bozeman favors sellers. However, if you’re able to find a property to invest in, you can expect it to appreciate over the years. Additionally, you can expect to benefit from the rental market fed by the growing population.

Those searching to buy and sell in Bozeman within the next year can expect both obstacles and advantages from the current housing market. Buyers will benefit from the slowly cooling market, while sellers can expect good offers for their property within the seller’s market. Whatever way you act, Bozeman itself provides several perks for all those involved in home transactions. When you’re ready to buy or sell in this Montana city, contact Bozeman real estate agent Joy Vance to guide you through the process.