The real estate market is highly influenced by: economic conditions, mortgage conditions, job market conditions, and inventory selection.
Economic Conditions: Great news! The economic vibrancy of the U.S. has been continually growing over the last few months. As the U.S. thrives, there is global unsteadiness. If the global market continues to remain in a weak and vulnerable state, the U.S. economy will similarly weaken with its exports creating negative ripples in the market. (SOURCE)
Mortgage Conditions: With the healing market comes a return of mortgage rates to their averages. This means an end to the historically low mortgage rates we have seen these last five years. We expect rates to continually rise over the months to come.
Job Market/Income: Unfortunately, the economy has not recovered enough to see a significant change in unemployment rates. Month-by-month unemployment rates and jobless reports are gradually improving which is just starting to tickle an increase in consumer spending. Hopefully this trend will continue as we enter the winter months.
Inventory Selection: A key factor in the recovering market has been the housing market. High demand has provided the market with strong momentum. This has been a positive trend, but the inventory has been increasingly constricted.
The supply of new homes fell to 4.8 months at that pace—well beneath the normal level of 6 months. Limited supply means limited risk of price declines, but it also limits possible future sales. (SOURCE)
What this all translates to here in Bozeman:
Median home prices have held strong all summer rising in the most recent months. But, when you look at the new and sold homes on the market, the inventory has dramatically decreased in the recent months. Those trends together mean that the remaining inventory on the market is, on average, $100,000 more than what has been moving all summer. That is a snapshot for the area as a whole. If you have questions about your area in specific, please comment or email me today!