The road to home ownership is exciting and full of decisions. Viewing available houses to find the one that best meets a buyer’s personal tastes, needs, and budget can be time consuming and sometimes results in not finding a home that is “just right.” For people with a bit more inspiration and the luxury of time, the option to buy a vacant building lot or acreage on which to build a brand new home might be a viable alternative. So although housing statistics are generally in the forefront of real estate news, bare land certainly has its own role.
The types of new homes we see being built generally fall into the categories of spec homes versus custom homes. Spec homes, or speculative homes, are built without a predetermined buyer in mind and so designed to try to appeal to a large spectrum of buyers. Custom homes are uniquely and individually built from a set of house plans for a specific client. The impact of both of these types of construction affects the vacant land market that we track.
Looking at the actual listing and sales numbers from the Southwest Montana Multiple Listing Service for our local areas gives a glimpse of activity within the vacant land category. Figures are from the first half of this calendar year ending June 30, 2015.
In the Bozeman city limits, vacant land listings are reported at 175 as of the end of June, which is down 10% compared to a year prior. These listings range from a low of $51,800 for a 5,279 square foot lot in Valley West subdivision to a $2.4 million 10 + acre parcel that is ready for development in the West Winds subdivision. The number of sales is up 19% to 76 with an average sales price of $82,015 and median of $68,250.
In the Bozeman surrounding area, 371 properties are for sale, up 16% from 2014. This area offers a diverse sampling from $61,000 for a 5,967 square foot building lot in Falcon Hollow to 230 acres of agricultural land including the East Gallatin River on Springhill Road for $5,250,000. Sales are also up by 21% to 145 at an average sales price of $144,259 and median of $95,000.
Belgrade’s market has 70 available listings, which is down considerably from the year before. For $47,700 there is a 5,227 square foot subdivision lot in Las Campanas, or for $3,075,000 there is a 153 acre agricultural parcel. There have been 46 sales to date at an average price of $135,935 and median of $59,350.
The area that includes Manhattan and Three Forks provides 336 available properties. The Village at Elk Ridge near Three Forks offers a 1.16 acre lot for $9,900 all the way to 1,400+ acres on the Jefferson River for $2,595,000. Sales have been rather stable with 51 closing thus far. The average sales price is $61,515, and the median is $25,000.
In the Ennis market, 367 current listings are open to purchase with 32 sales year-to-date. Of the available properties, there is a range from $10,750 for a 9,400 square foot lot in Virginia City to $2,250,000 for 71 mountain acres on the private, gated Jack Creek Road. The average sales price is $98,193, and the median is $53,500.
Gallatin Canyon/ Big Sky’s inventory is at 255 listings, which is a 14% increase over the previous year. The range includes a .43 acre lot near Hebgen Lake for $32,500 to a 1,632 acre sub-dividable parcel in the Gallatin Preserve for $7 million. Sales are up a substantial 61% to 50 through June. The average sales price is $338,410, and the median is $206,500.
Park County, which encompasses the Shields Valley, Paradise Valley and Livingston, offers 282 properties yet only 24 sales thus far. Current inventory includes a 3,500 square foot in-town lot for $10,000 to an 890 acre parcel on Trail Creek for $7.5 million. The average sales price is $104,947, and the median is $82,250.
Land categories are broken down by a number of ways including recreational land/ acreage, building lot under 1 acre, vacant land/ acreage, and subdivision lot. Therefore, the average and median figures often are difficult to use since an in-town building lot can be compared to either large acre ranch or recreational properties.
As land prices rise in the immediate Bozeman market, buyers may consider increasing the distance from this epicenter to reduce overall housing costs. With the exception of Big Sky, building prices remain fairly stable no matter where a home is constructed. The price of the land and impact fees are two of the variables that can make the difference in affordable and attainable housing.