Nestled among the mountains in southwestern Montana is the small city of Bozeman.
It has experienced a boom in recent years, with an influx of people moving there.
More than 58,000 people now live in Bozeman, according to the U.S. Census Bureau. Gallatin County, where the city is located, has over 126,000 residents.
Bozeman is also home to a dynamic and lively real estate market.
"Obviously we’ve seen nationally a shift in the real estate market since 2023. I think that, just as you’ve probably heard in other markets, we saw less buyers in the last two years, primarily due to interest rates and also people waiting to see what was happening with the election and understanding their confidence in economics and the future of the country, so I think that affected us as well, but I would say absolutely" it is booming, The Agency Bozeman and The Agency Big Sky Managing Partner Joy Vance told FOX Business.
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"There’s certain parts of the market that we saw take a back seat, but then other parts of the market we saw still record-breaking prices," she said.
The city’s downtown has been "record-setting," according to Vance. She also said that for single-family homes in Bozeman priced over $2-3 million, "we’re still not seeing homes sit on the market for very long," getting purchased in less than 30 days.
Single-family homes and residences that fall within the high-end market have been "in the highest demand and with the lowest inventory," per Vance. She also said luxury homes in Bozeman have been one of the strongest markets in the area.
Meanwhile, the condo market "has been lagging" some and "anything sub-jumbo rate has taken a back seat," she explained. First-time home buyers "are facing limitations in the area due to the median sales price being above [$750,000] and interest rates causing high monthly payments," according to Vance.
Bozeman’s median home price is $761,000, The Agency reported. The value of homes in the area have risen over 59% over the past five years, per Zillow.
The city is located about 30 miles from Big Sky, where the private Yellowstone Club resort can be found and many big names have homes.
Bozeman has "seen the effects of that type of wealth come into the area," according to Vance.
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"There’s only around 4,000 people that live in Big Sky year long, and there’s restaurants there that still have shoulder seasons. And so people will come to Big Sky and ski or come in the summer, and they fall in love and they buy a home, and then after a year, they’re going, ‘I can’t go to the same 10 restaurants," so they’ll come to Bozeman," she said. "Bozeman is a thriving small community, but we’ve got great restaurants, we’ve got entertainment, and so we’re seeing people who own homes in Big Sky then want to purchase a home, like a condo downtown, so that they don’t have to drive the canyon at night after they’ve had dinner and possibly a glass of wine."
"We’re seeing second homes as a result in Bozeman, but I also think that it’s putting Bozeman on the map."
The city is "very sought after" thanks to the lifestyle and quality of life that people get living in the area, Vance said, noting it attracts a "very healthy, active type of person" and a "lot of entrepreneurs."
The area offers an abundance of outdoor recreational activities such as hiking, skiing, biking and fishing. Other aspects like its safety, expanding airport, schools and health care have also drawn people to Bozeman, per Vance.
The lifestyle is "a bit slower paced" but is "attracting some of the amenities that you would get in more urban areas but we still have a small town feel," Vance said.
"People are hearing about it, and once they come here, we see a lot of people who own second, third, fourth homes that are looking in Bozeman because of the lifestyle," she added.
Bozeman’s population jumped nearly 43% between 2010 and 2020, according to the Census Bureau. It also posted a 7% increase from April 2020 to July 2023.
"I think the challenge that any community that goes through rapid growth faces is affordable housing, and that is clearly a topic of conversation for our community," Vance said. "We’re definitely talking about it, and we’re trying to find solutions."
She thinks Bozeman’s real estate market will have a "busy year" come 2025 if interest rates come down.
"I don’t see a surge in prices. We did a course correction over the last year and a half, and it was minor," she said. "We’re going to see probably a lot of sellers put their house on the market in February, March and April that have been holding not because, one, interest rates – they had low interest rates, most of the homeowners – and waiting to see what would happen with the election … and I do think that buyer demand is going to be dramatically different."
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An October report from Mortgage Bankers Association suggested 30-year fixed rate mortgages would become 6.3% in the final quarter of this year and continue to trend down over 2025, hitting 5.9% by the third and fourth quarters next year.
