A new report from Coldwell Banker Realtor puts Bozeman at the top of the list for most expensive home market in Montana.
The 2013 Home Listing Report looked at the average cost of a four bedroom two bath home. It found that type of home lists for, on average, $355,000.
We took those numbers and put them up against real estate statistics from the Gallatin Association of Realtors. Their numbers aren't complete for this year and don't specifically show four-bedroom, two-bath homes. However, they paint a similar picture -- the average home price is $350,000.
We spoke to one mortgage broker who tells us she's been seeing average home prices right around the $350,000 mark in the Bozeman area. How does that compare to the average income of the home buyer and are they able to afford those homes? We're told it depends.
Loan consultant Judy Sprandel owns Preferred Mortgage in Bozeman. She tells us she has seen an increase in home prices and says some of that may be due to lack of inventory. But Sprandel explains there's still ample opportunity for first time home buyers to get into a home in our market.
"We have more buyers than we've had in a long time. We are able to qualify them for mortgages and there's some great programs out there," says Sprandel.
She says her average home buyers bring in around $60,000, so we asked Sprandel, "With those sorts of incomes do you see it possible to purchase a $350,000 home?"
"We have not had any problems getting people qualified," replied Sprandel.
At current interest rates, Sprandel says a $350,000 home could cost as much as $1,700 a month. That is, as long as the potential home buyer doesn't have a lot of additional debt.
"If they don't have a lot of student loan payments or car payments, they typically can qualify. The ratio we use is 45 percent of gross income," explains Sprandel.
That 45 percent is a breakdown of what you bring in every month and what you pay out in debt.
While the market seems to be bearing an average of $350,000 homes, Sprandel tells us she thinks that's likely the most it can handle at this time.
"I think there's enough jobs that are well paid or dual household incomes, so they do seem to be able to afford that at this point," Sprandel says.
Sprandel does say she believes there's a need for more affordable housing in the Bozeman area-homes priced in the $225,000 to $275,000 range.
As it stands now, she says home buyers who can only afford homes in this price range are forced to the outskirts of town in place like Four Corners and Belgrade.
We asked Bozeman City Commissioner Chris Mehl his take on the $350,000 home average. He says, at first, that number seems like a lot for Montana but, the more you look at it, you find Bozeman is booming.
Mehl explains there's not much we can do about it except increase the supply. From a city perspective, he says they're processing applications all the time, annexing land into the city and the market is responding.
"So many people are moving here, the university is expanding, retirees are moving here, we're creating jobs here. Right now, we're a very hot market and we're seeing the results of that," explains Mehl.
Mehl tells us he doesn't want to see the average home price rise much above $350,000 but he says we not have much of a choice if that's what the market demands.