Intro to Bozeman

Predictions for 2021 Economy and Real Estate Market

by Liz Nitz

Predictions for 2021 Economy and Real Estate Market

Matthew Gardner, the Windermere Real Estate Company, gave our company his thoughts on the Economy and the Real Estate Market this week.  The summary of his talk is below:

  1. Currently the economy is declining a bit and as expected due to Covid. We have recently seen declining jobs numbers which funnels to declining spending.  However, Matthew predicts that once the vaccine really hits some large numbers of distribution, we will see people heading back to work and spending will then increase. Both increased jobs and spending are good things for our economy overall.
  2. The move from larger cities to the suburbs and smaller cities is real. However, Matthew does think that once the vaccine has been distributed that many workers will only part time work from home and then also part time go into the office.  For this reason, he sees many people not moving too far away from their primary place of employment.
  3. In the apartment market, we will see declining rents in the larger cities as people leave the city and as they can afford to purchase homes outside of the cities. Also, the larger cities may be a bit overbuilt this year as 400,000 new units are supposed to come on line.  Developers will probably turn their attention to building in smaller cities as a result.
  4. Luxury housing performed incredibly and surprisingly well this past year. This segment is expected to do well again in 2021.  Reasons are that jumbo interest are very low and with the increased flexibility of work locale, people can choose to get more value and also move to locations with lower tax rates.  Matthew also thinks we will have more foreign buyers in 2021.
  5. Zoning overall will see more commitment to increased land being sold to developers who will build affordable housing. Many cities and town are facing a pretty substantial decrease in tax revenue and they cannot allow employers to leave because workers can’t afford housing.
  6. Adaptive reuse will gain some traction particularly in hotels, malls and strip malls being converted to residential or mixed-use developments. Matthew thinks that office buildings are tougher to reuse due to core construction and the difficulty of dealing with additional infrastructure such as plumbing needed for residential.
  7. Home features that are now important in the post Covid world – more space, separate offices, dedicated zoom space, high speed internet. As a result, new home sizes will be growing.
  8. Mortgage forebearances. These are not going to turn into foreclosures at a super high rate.  Many (maybe most) people will have enough equity in their homes that they can sell if they have to and keep their equity. In some markets, particularly larger cities, the condo market may be the exception to this.
  9. Mortgage rates are incredibly low right now. We have had 16 record lows over the past year.  Matthew thinks that they are about as low as they are going to get and as 2021 wears on, they will rise but conventional rates shouldn’t go much higher than 3.1%.
  10. In 2021, Matthew sees home sales continuing to increase (about 7.5% is his prediction) but home prices will increase 4.1%. He thinks we will have more inventory which will help to keep prices from skyrocketing.  He sees a large amount of first time home buyers entering the market, particularly if Biden is successful in passing the first time home buyer credit as part of his economic package.

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Windermere is very fortunate to have a full time, renowned economist on staff.  Matthew is often asked his opinions from economic and government leaders.  I trust his words.

If you’d like more information or to discuss further, please reach out to me at 406 499 4218 or liz@windermere.com.

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The following homes listed below were just listed in the last 7 days. This seller’s market is hot so we keep a close eye on the latest inventory. Subscribe below for instant updates of your ideal criteria.

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334 Herstal Way, Bozeman, Montana 59718

334 Herstal Way, Bozeman, Montana 59718

4Bedroom(s)
1Bathroom(s)
0.08Acre
2,096Sqft
Form & Function are on display in this concise and well-appointed plan by Higher Standard Homes. Living room with laminate hardwood seamlessly flows through the dining area and into the kitchen which features quartz counter tops, stainless appliances, modern Bellmont cabinets and large slab island. Upper level boasts spacious master with dual vanities, tile surround shower and walk-in closet.
$719,900

3010 W Villard Street 1F, Bozeman, Montana 59718

3010 W Villard Street 1F, Bozeman, Montana 59718

3Bedroom(s)
2Bathroom(s)
1,308Sqft
Well maintained and move-in ready upper level 3B/2B condo in Morgan Creek. This home also has a 1 car detached garage and spacious bedrooms. Fantastic central Bozeman location.
$415,000

391 Annie Glade Drive, Bozeman, Montana 59718

391 Annie Glade Drive, Bozeman, Montana 59718

4Bedroom(s)
2Bathroom(s)
0.30Acre
2,529Sqft
This lovely, light-filled home in Elk Grove is located at the end of cul-de-sac on a larger lot with a beautifully landscaped & fenced yard that backs to open space. This well-appointed home includes 4 bedrooms, 2.5 baths plus office and guest cabin. The main level master features a large ensuite bathroom with soaker tub. Beautiful hardwood floors cover the main living spaces and bedrooms.
$749,000

1028 Boylan Road, Bozeman, Montana 59715

1028 Boylan Road, Bozeman, Montana 59715

3Bedroom(s)
3Bathroom(s)
0.24Acre
2,712Sqft
Fantastic and flexible single level floor plan in Bridger Creek Subdivision is under construction and expected to be completed by mid-March 2022. High quality finishes include an extensive cabinetry package, custom built ins, tile, luxury vinyl flooring and quartz counters. Matte black fixtures enhance the sleek modern flair of this 2700 + Sf home.
$995,000

1045 Boylan Road 3, Bozeman, Montana 59715

1045 Boylan Road 3, Bozeman, Montana 59715

3Bedroom(s)
3Bathroom(s)
2,205Sqft
Great condo in a great location! Situated on the number 6 hole on Bridger Creek Golf Course, this light filled condo is central to all that is great about living in SW MT! Minutes to downtown Bozeman, surrounded by trails, and easy to hop on the walking or bike path to the M and Drinking Horse Mountain. Golf all summer and xc ski on the groomed trails out your back door all winter.
$775,000

2400 Durston 8, Bozeman, Montana 59718

2400 Durston 8, Bozeman, Montana 59718

3Bedroom(s)
2Bathroom(s)
1,755Sqft
Beautifully updated and move in ready, single level home in the desirable Willwobrook Condos. This home features a large master suite w/walk-in closet, private fenced patio and a remodeled 3/4 bath with gorgeous walk-in shower. Luxurious new wool carpet. Granite counters in kitchen and 2nd bath. Kitchen features newer stainless appliances, pull outs in lower cabinets and a sizable pantry.
$725,000

6651 Gooch Hill Road, Bozeman, Montana 59718

6651 Gooch Hill Road, Bozeman, Montana 59718

4Bedroom(s)
3Bathroom(s)
6Acre
3,908Sqft
Great horse property just minutes to downtown. This home has had many updates, including new paint, flooring, fixtures, hardware, lighting, bathroom etc. in 2021/2022. Perfect set-up for the horse lover, with multiple pastures, barn with stalls, tack area, hay storage, round pen, and various outbuildings. 4 beds and 3.5 baths in the house gives you plenty of room.
$1,895,000

305 Michael Grove Avenue 2A, Bozeman, Montana 59718

305 Michael Grove Avenue 2A, Bozeman, Montana 59718

2Bedroom(s)
2Bathroom(s)
953Sqft
Single-level, 2-bedroom 2-bath, newly painted, ground floor, corner unit condo with lots of natural light from north and eastern-facing windows. Open concept living and dining area, opening up to small patio. Main entry is a preferred south facing entry. Condo has central air conditioning(!), a 1-car detached garage with loft storage, and a reserved parking space.
$340,000

439 N 10th, Bozeman, Montana 59715

439 N 10th, Bozeman, Montana 59715

4Bedroom(s)
1Bathroom(s)
0.18Acre
2,200Sqft
GREAT LOCATION! Close to Bozeman Senior High School 4BR 2BA Rancher with full basement and CONVERTED SHOP to a 400SF+ STUDIO/COTTAGE, additional living space in the backyard. Studio has 3/4 bath, small kitchenette w/sink, AC/Heat Mini split, stacked W/D, gas stove heater and walk-in closet. EXTRA PARKING accessed from alley.
$685,000
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Windermere Downtown Bozeman

135 E Main St.

Bozeman, MT 59715

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