In trying to evaluate your home for a listing price that could actually result in a sale, agents and owners should look at the following factors objectively and without emotion.
A buyer may react emotionally to an aspect of the home which is great but most buyers will then ask their agent to do a comparative market analysis to measure the fairness of the asking price. If a buyer is getting a loan to purchase the home, the home has to appraise according to strict guidelines. See here for what an appraiser looks at https://sf.freddiemac.com/content/_assets/resources/pdf/forms/70.pdf
Following are 14 Factors that help determine a home’s value.
- Age of home and design style – While newer homes are favored by some buyers due to the lack of maintenance requirements, there are many buyers who love the charm of an older home, especially those of the craftsman and victorian style.
- Structural materials and systems. Even in an older home, one that has had updates to systems such as electrical, plumbing, heating and replacements to roof and siding will be seen as more desirable and garner a higher price.
- Quality of Renovations and Added Amenities. Renovations that are properly permitted are most desirable. Beyond that, the quality and workmanship of renovations will garner a larger listing price. Added Amenities such as hot tub, water feature, etc will also add value.
- Floor plan. Is the floor plan functional for today’s consumer? Needs and tastes change so this can be a moving target.
- Number of bedrooms and bathrooms. Price should be reflective of these numbers and these days, a private master bath is a sought after feature.
- Square footage. Not always the most important element if the home has a great floor plan and makes use of space well.
- Curb appeal. Very important for first impression.
- Lot square footage and design. Not only is the lot important but also what is done with the space. People want to spend more time outside and a backyard oasis where one can entertain and relax is a sought after commodity.
- Storage. More important for some consumers than others but organized storage is generally a plus.
- Garage. In some places, the number of garage spaces can make a huge difference in selling time and price. In Bozeman, 3 garage stalls are very desirable so that people can store their toys on site.
- View. Views can increase the value of property especially if they are unobstructed and protected.
- Location. Everything factors in here from walkability to shops, coffee, restaurants, ambient noise, convenience to freeways, airports, perceived demand for the neighborhood.
- Neighborhood. What does the rest of the neighborhood look like? It is most desirable to have like kind or better properties than the subject home in the neighborhood
- Comps and the current real estate market. What have other homes sold for in the past 90 days? And then what is the momentum of the current market?
If you are curious how your home would be valued, please reach out and let’s schedule a free property analysis. Montana is a non disclosure state so only a licensed relator or appraiser has access to real sold data which you need for an accurate valuation. For up to date information on the Bozeman market, read my blog posts at https://movemetomontana.com/.
We are right now in a unique situation not seen before. I thought it prudent to research how Coronavirus is affecting the economy and Bozeman real estate market
Our lives have changed drastically in the past week; kids are home from school, trips have been cancelled, gathering places closed. We also have anxiety about what is going on out there; not only do we have anxiety about being ill, or perhaps carrying the virus to someone who may be at risk for serious complications from the virus, but we also have anxiety about the fact that our financial world has been turned upside down. This perhaps brings back bad memories of the 2008 crash and the recession that followed.
So let’s try and address some of these anxieties caused by the Coronavirus outbreak:
First of all, you are doing everything right if you are following the steps recommended by the CDC. https://www.cdc.gov/coronavirus/2019-ncov/index.html These steps are in your control and should keep you and your household healthy. Do them and feel good about it!
At Windermere, we are fortunate enough to be backed up by a strong company with many resources. Some of our financial and economic experts have reached out to us to explain how they see the economic impact of this and the effect on local housing market.
Following is a summary of likely effects of the Coronavirus to the US economy as a whole.
These were communicated by Matthew Gardner, Chief Economist for Windermere.
- The Economy will contract. With the disruption to life, travel etc., we are all spending less money.
- The Stock market has lost value as a result of the uncertainty of the situation and how long it will continue.
- Home inventory on market will probably decrease in the next few months as people will not want others in their homes.
- Buyers will want to take advantage of low interest rates but buying will probably decrease as well as people are uncertain about economy and some may need to wait for stock market to come back up.
- Economists believe that towards Q3 and Q4, economy and stock market will pick back up.
- Mortgage interest rates will stay low however.
- Housing as a sector is well positioned to come out of this positively.
- Banking rules that were put into place after 2008 have protected housing and made sure that the upside down equity positions held by people then do not exist anymore.
- Inventory will be tight as households are being created but not enough housing being built overall in US.
An analytical look at Coronavirus and Bozeman real estate:
- Our area is positioned well to weather this kind of storm. We will see some impacts as noted above but we will also rise out quicker than other areas of the country.
- Why? Our fundamentals are strong.
- Bozeman area is noted as #1 in economic strength for micropolitan areas in US. https://www.prnewswire.com/news-releases/policoms-2018-economic-strength-rankings-for-933-communities-announced-300585848.html
- We have had increased demand and not enough supply of homes for many years. This has meant that our median price of a single family home has gone from $329,000 in March of 2015 to $520,000 in February of 2020 and our months of supply has gone from 4.3 months in March of 2015 to 2.2 in February of 2020.
- Our unemployment rate is very strong most recently being at 2.4% down even from a year ago when it was 3.%. The highest is has been since 2015 is 3.4%. The interesting thing here is that US Federal Reserve puts natural unemployment at 2.5-3.5% as people move around, change jobs etc.
- Bozeman is a unique place to live as we all know and why it attracts so many new residents each year. Our quality of life, access to the outdoor activity, ability to earn a living make it truly distinctive. This will not change.
In the immediate future, what will happen?
- We will have at least two weeks of social distancing to help prevent the spread of this virus.
- Diagnosed cases will rise because of increased testing.
- The strategies that the CDC and government have recommended to prevent spread will work.
- There will be positive news about a vaccine for the future.
- Discomfort and anxiety will continue in our lives and in the financial markets until things become certain and we have started to see decreasing cases.
- There is a massive fiscal stimulus coming that is pointed at people and industries most affected by this.
- Recovery will happen relatively quick as our US economy fundamentals are strong.
I will continue to update my blog MoveMeToMontana.com with more information and analysis as I get it.
A disclaimer – I am not an economist but am culling information from economist’s opinions and presenting factual statistics about Montana. However, one should read this article about how Coronavirus is affecting the economy and Bozeman real estate market as my opinion. I have curated the information and summarized it in this piece.
Stay healthy and please do what you can to help local businesses! Shop online with them, order take out, buy gift cards. They really need our help right now.
Presenting Bozeman Real Estate Statistics for the first two months of 2020! And if anyone thought that we were going to have a slow winter in real estate, they would be incorrect.
Let’s start off with Median Sales Prices.
As seen below, we can see that all property type prices are off to fast start with a roughly 8% increase over last year. To put things in greater perspective, the February numbers of 2018 and 2019 for median sales prices were : 418,000 (2018) 456,375 (2019) for Single Family Home, 253,000 (2018) 289,900(2019) for Condos, 305,000 (2018) 334,950 ((2019) for Townhomes.
Days on Market
To fill in our view of the real estate market in Bozeman, let’s take a look at how quickly inventory is moving off of the market or being sold. We typically measure this by the absorption rate which we call Days on Market.
Here we see that Single Family DOM is down 16.7% or has gone from 24 days last year to 20 days that year, reflecting healthy demand that builders are not quite keeping pace with. There is better news with Condos and Townhomes as those Days on Market have actually increased a bit.
How much supply is there?
To finish rounding out our view of Bozeman Real Estate Statistics, let’s look at how many months of supply we have at the moment. Again here we see a modestly declining inventory of Single Family Homes with increasing inventory of Townhomes and Condos.
One note on the coronavirus. Currently the coronavirus has not impacted the Bozeman real estate market except to drop home interest rates precipitously so that they are at lowest levels in 50 years! This certainly will rachet up demand as potential buyers look to take advantage of lower interest rates to afford more house or have a lower mortgage payment. Keep an eye on my blog as the picture becomes more clear and the medium and longer terms effect come into focus. For more on interest rates, try this website. http://www.mortgagenewsdaily.com/
These numbers in this report reflect sold pricing. Remember that Montana is a nondisclosure state so only licensed real estate professionals can access accurate data. If you would like to dive deeper into market trends or specific price categories, please reach out and let’s have a conversation!
I hope you found this helpful – please pass it on and check out my other blog posts at MoveMeToMontana.com.