Real estate is a unique asset class in that every piece is different and as such, there are multiple considerations that go into a purchase or sell decision. For every purchase however, price and investment considerations play a role. The “investment test” is often the first hurdle that must be satisfied before a buyer considers other factors. In the recent past, a rising real estate market was a presumed to be a given so investment oriented buyers focused on finding the “next big project”. Annual appreciation rates of 4% to 15% were assumed by buyers which justified ever higher purchase prices.

The eager appreciation seekers of yesterday have been replaced by the eager bargain hunters of today. The good news is that with buyer present, transactions rates are recovering and market prices are being reset. With buyers now more confident in stable prices, we are in the early stages of a recovery.

Setting a property’s price in this volatile market proves more critical than ever because a miscalculation can cause a property to sit, costing the owner monthly out-of-pocket expense. Historically, pricing mistakes were quickly illuminated because correctly priced properties moved quickly. Sellers could adjust without wasting a lot of time on market. With days-on-market up for all properties, this is a less reliable indicator.

It is the purpose of this blog forum to share market trends, insights and war stories in an effort to help inform buyers and sellers in Big Sky, Bozeman and greater Montana. Better information helps create a more efficient sales process.  While objective factors will always play a role in setting price, historic market statistics as well as specific comparable sales are necessary to support any pricing decision.