2022 Cash Buyers

By Tim Ford – Real Estate Broker

It’s been a wet spring. In addition to the rain fall, the fed has been trying to throw a little water on inflation. As such, we’ve seen a large uptick in mortgage rates. As I write this, rates are hovering around 6%, this is up from average rates around or even below 3% for much of 2021. Bozeman has always seen a decent percentage of cash purchases, so how has that trend faired in 2022?

 

The percentage of cash transactions continues to increase in Bozeman. Looking at cash only transactions for sales of single-family homes in all of Bozeman between January 1st and June 1st; back in 2019, the percentage was around 25.7%, or 88 out of the 343 sales. In 2020, it dipped a bit to just shy of 20%, or 62 of 311 sales. Last year it was up significantly with 103 of 341, or just over 30% of sales. This year, cash purchases continued to increase as 105 of 268 sales, or 39%, were cash transactions.

 

In the past, even though the percentage moved slightly up and down over the years, it was generally fairly consistent. In 2015, 85 of the 371 sales during the first 5 months were cash, or 22.9%. In 2014, it was 70 of the 318 sales, or 22% and in 2013, 61 of the 276 sales, or 22.1% were cash purchases.

 

The area around downtown often has an even higher percentage of cash transactions, and that trend continued this year. Looking at the time period of January 1st through June 1st; In 2019, 18 of the 56 homes sold were purchased with cash, roughly 32%. In 2020, that number was up to 39%, or 20 of 51 homes sold. It rose again in 2021 to 22 of 50 homes, or 44%. This year, the percentage ticked up again to 45%, or 19 of the 42 of downtown single family home sales being all cash purchases.

 

Drilling down a little deeper and looking at condos downtown; in 2018, 16 out of 33 sales, or 48% were cash purchases. In 2019, 12 out of 33, or 36% were cash purchases. In 2020 it rose slightly to 37.5%, or 9 of the 24 condos. Last year, it was actually down slightly with 33%, or 10 of the 30 condos sales. This year, it rose again to 44%, or 17 of the 39 downtown condo sales in the first 5 months being cash purchases.  

 

This data is really too early to show what the effects of the mortgage rate increases are or will be. However, it is interesting to see that while the overall number of sales has decreased, partly due to a decrease in available inventory, cash purchases have continued to increase, both in total overall numbers, as well as the percentage of sales.

 

As usual, I have included data for the number of single-family homes sold during the first five months of 2022. In addition to the 268 single family homes sold during this time period, another 116 home sales are currently pending as of the date of writing. This compares to 156 home sales pending at this same time last year.

 

The included data reflects sales of homes in the greater Bozeman area, including Four Corners, Gallatin Gateway, Bridger Canyon, and Bozeman city limits. The data includes home sales reported through the local Big Sky Country MLS, and does not include private party sales, Condominiums, or Townhouses. 2022 Real EstateMarket Data

January 1stthrough June 1st, 2022

 

 

2020

2021

2022

Total Sales – Bozeman

311

341

268

Median Sales Price

$520,000

$700,000

$901,000

Average Sales Price

$658,711

$916,518

$1,239,521

Average Days on Market

69

23

20

Median Days on Market

29

5

4

 

 

Total Sales – Bozeman

January 1st through June 1st

Year

# Homes Sold

2004

251

2005

259

2006

233

2007

221

2008

189

2009

132

2010

208

2011

207

2012

237

2013

276

2014

318

2015

371

2016

377

2017

347

2018

386

2019

343

2020

311

2021

341

2022

268