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Bozeman’s Resilience & Big Sky’s Attractions Fuel Continued Real Estate Allure, Defying National Slowdown

By Taylor Owens

The allure of Southwest Montana persists even as national real estate markets slow down. Gallatin County stands out as one of the fastest-growing counties in the United States. Private jet usage at Yellowstone International Airport increased 5-6% last year, and investors continue to eye the area as reflected by nearly 40% of 2023’s Bozeman home sales closing in cash or 1031 exchange transactions.

While the national median home price fell 7.1% in 2023 to a $425k, Bozeman pricing continued to climb with a 1.7% year over year increase to a median home price of $748k. However, this is a marked reduction from the 16.7% growth in pricing Bozeman experienced from 2022 to 2023. 

“One of the most prominent trends we’re seeing is a return to more normalized yearly price increases,” Eli Kretzmann said, sales agent at Outlaw Realty. “While Bozeman home prices are still above the national average, prices have flattened out in the past year.”

Closing out 2023, one of the biggest changes seen in the market was price reductions. Stagnating inventory began forcing sellers to realize the COVID pricing high is a thing of the past and they must price accordingly for this newly normalizing market. 

“Generally, the market has cooled from COVID highs, and many buyers and sellers remain on the sidelines with the current rate environment and home pricing,” EJ Daws said, supervising broker at Outlaw Realty. “Homes that are unique or well-positioned within the comparable market are still selling fairly quickly, with multiple offers, but days on market has increased to around 20-30 days.”

The flattening of the market in 2023 gave buyers a chance to catch their breath and negotiate a fair deal, but, without a massive influx of inventory, large, market-wide price drops are not expected. 

Supply is the primary limiting factor keeping prices buoyed in the Bozeman area. Rounding out 2023, the high price of labor and materials continued to disincentivize new construction while homeowners locked into three-four percent mortgages were reluctant to sell. Despite limited supply and high prices, a steady influx of new residents showcases the high demand for properties in the mountain West. 

“Bozeman proved resilient during COVID and economic downturn, and truly was an escape for many people who had been thinking of moving to the mountain West that decided to go for it,” Daws said. “I don’t foresee huge amounts of for sale inventory headed our way that would be outside of the typical cyclical market, which should keep pace with Bozeman’s population growth rate and allow for fairly normal absorption. However, if rates head lower towards the 4-5% range this next year, this will open the affordability door to many buyers and we will get back to a really active market.”

Quality of life continues to be a major draw for people moving to Bozeman. Access to the outdoors, a bustling downtown, and a tight-knit community continue to be appealing to many. 

“Bozeman is a vibrant place,” Daws said. “I grew up here and have experienced the appeal firsthand. An incredible thriving university, excellent schools, a rock-solid downtown, amazing restaurant scene, great business environment. I could go on and on. At the end of the day, Bozeman is still a ‘small town’ relatively speaking, and has so much appeal to families, singles, young professionals, retirees, etc. Our access to recreation, and tight local community really help people feel “home” when they are here.”

The Franklin in the winter. PHOTO BY MICHAEL RUEBUSCH

On the other side of the valley, Big Sky’s appeal as a year-round destination continues to grow. New attractions, such as the addition of a new tram at Big Sky Resort, the availability of accommodations at the Montage, and the development of The Franklin Residences, contribute to the area’s desirability. 

“Big Sky’s notoriety has increased dramatically in the past few years with the extensive lift upgrades at Big Sky Resort, the recent opening of the Montage Hotel, and now the One and Only Hotel nearing completion,” said Michael Pitcairn, broker at Outlaw Realty.

At the end of 2023, Big Sky Resort celebrated a successful two-year construction process with the grand opening of the new Lone Peak Tram. The new tram boasts 75-passenger cabins, spectator access and a new vantage point with views of the Gallatin and Madison mountain ranges. 

“Ski access has been another important factor when buyers have limited vacation time and want to spend as much time on the snow as possible,” Pitcairn said. “The sub $1 million market is always fairly hot as it is an attractive entry point to garner a property in Big Sky.”

Big Sky’s population is roughly 3,500 with most properties being vacation homes. The unparalleled access to world-class recreation, including downhill skiing, Nordic skiing, mountain biking, hiking, fishing, as well as nearby proximity to Yellowstone National Park, has made this town a hub for outdoorsmen and adventurers alike.

“Sales have cooled off and buyers are back in the driver’s seat pursuing well priced and unique properties,” Pitcairn said. “We are seeing activity on irreplaceable legacy properties, ski access homes, and also the sub $1 million market. Astute buyers understand that certain homes and land cannot be replaced or replicated, and therefore are securing their legacy properties.”

The Franklin Residences, situated in the heart of Big Sky’s town center, are thoughtfully designed, luxury residences with walking access to dining, shopping, live music, the BASE community center, an ice skating rink, farmers’ markets, and much more throughout the year. These residences are the perfect opportunity for newcomers to claim their space in Big Sky’s community.

“With unprecedented features, including rooftop decks and hot tubs, underground heated parking, and an in-town walkable location, the Franklin building creates a whole new residential offering never before available in Big Sky’s Town Center,” Pitcairn said. 

Even as national real estate markets experience a slowdown, the magnetic charm of Southwest Montana endures with Bozeman and Big Sky standing out as highly sought-after destinations. The real estate markets in these areas remain vibrant and in demand as we enter 2024.