As prices fall, Bozeman housing market picks up

In recent weeks, Ted and Heather Fust have been driving around the Bozeman area, looking at the houses for sale.

NICK WOLCOTT/CHRONICLE Chris Omland inspects a Bozeman home while shopping for a house Friday. Some new statistics indicate a possible brighter future for Bozeman's housing market. But they haven't actually gone inside any yet.

"Financially, we're not quite ready," Heather said.

The Fusts, a couple in their early 30s, want to take advantage of declining home prices and low mortgage rates. But before they buy anything, they want to build their down payment and make sure that they wind up with a mortgage they could pay with just one income, should one of them lose their job.

"We've been watching the market for the last two years - since we moved here," Heather said. "The market now kind of helps us."

Just a few months ago, the housing market in the Gallatin Valley was pretty bleak. But Realtors say buyers who had been sitting on the sidelines are starting to look and homes that are priced right are sometimes getting multiple offers.

"Things are coming around," said Paul Dueringer, real estate broker at Prudential Montana Real Estate in Bozeman.

It's still slow, though. So far this year, 101 single-family homes in the Bozeman area have sold, compared to 502 in all of 2008 and a peak of 816 in 2005, according to the Gallatin Association of Realtors' Multiple Listing Service.

"What's selling are the properties between $200,000 and $250,000," Dueringer said. "That's where the deals are right now."

The lowest sales price in Bozeman so far this year was $186,000.

Only six of the 101 homes sold since New Year's Day were over $400,000.

Who's buying?

The deals going through are primarily local buyers buying local properties, said Robyn Erlenbush, broker-owner of ERA Landmark Real Estate.

The falling price of homes in the Bozeman area has helped bring in the buyers. The median price of a home here fell 18 percent, from a peak of $341,851 in 2006 to $280,000.

People who otherwise might have bought a house in Belgrade and commuted to Bozeman for work or school are choosing to buy in town now that it's becoming more affordable, Erlenbush said.

In fact, first-time homebuyers make up a large part of today's buyers.
 

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