The Gallatin Valley Housing report released by the Gallatin Association of Realtors highlights the problem of high demand, low supply, and skyrocketing prices in the Gallatin Valley housing market. The report was compiled by the University of Montana Bureau of Business and Economic Research and presented by its director, Patrick Barkey. The report's main focus was on affordability, and it highlighted the increasing costs of single-family homes, interest rates, and rents.
According to the report, Bozeman, Three Forks, Manhattan, Belgrade, and West Yellowstone have all become "unaffordable" according to the U.S. Census Bureau. Even though there has been an increase in permits for multi-family housing units, prices have remained high. For instance, the median cost of a new single-family home in Gallatin County reached $950,000 in 2022.
Barkey noted that the affordability crisis was already present before the Federal Reserve increased interest rates by 3%. Although interest rates have since returned to the historical average of 6%, the increased cost of mortgage payments has made homeownership unaffordable for median earners and the upper middle class. The report revealed that median income households can only afford around 40% of their monthly payment, pushing people who would typically buy a home to rent, which, in turn, has driven up the median income of renters.
Rental rates have increased since 2021, but have slowly begun to drop according to data from Zillow used in the report. However, consensus on how to tackle the problem was rare and varied, with different panelists having differing opinions. Barkey noted that prices going up have changed the affordability issue, which appeared to be the market responding naturally.
Graf, president of E.G. Construction, suggested that growing the housing supply would be the overarching solution, while Jeff Mihelich, Bozeman city manager, highlighted efforts the city has made to streamline its development review process. Allyson Brekke, the deputy planner for Gallatin County, urged people to think of housing supply differently and rehab existing structures for use in a different way. Barkey said that for there to be solutions, people had to agree on what the problem was in the housing market.
Follow this link to access the GALLATIN VALLEY HOUSING REPORT for 2023: https://www.flipbookpdf.net/web/site/defdf32480f906ff3a8d2acfe17d0b1e9dd3aa22FBP24580780.pdf.html