Montana's Impossible Housing Situation

Gerald Martin said:
Cheapest buildable lot currently listed on Zillow in Bozeman is 7500 square feet for 136,000. 1,600 square foot 3 bed/2 bath with a small garage at a minimum $250 per square foot build cost adds another $400K. Total build cost of @ $536,000 is right in line with homes of that caliber on the market.
Knock about $150,000 off that total build cost if you’re only buying materials and doing all the work yourself. Then you have to figure out if you want to try and work full time on it without an income during that time or try to do it evenings and weekends for the next year and a half….
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Gerald- About how much could this 1600 sq/ft house sell for in Bozeman once built? Just curious on the return. Thx
 
Gerald Martin said:
Cheapest buildable lot currently listed on Zillow in Bozeman is 7500 square feet for 136,000. 1,600 square foot 3 bed/2 bath with a small garage at a minimum $250 per square foot build cost adds another $400K. Total build cost of @ $536,000 is right in line with homes of that caliber on the market.
Knock about $150,000 off that total build cost if you’re only buying materials and doing all the work yourself. Then you have to figure out if you want to try and work full time on it without an income during that time or try to do it evenings and weekends for the next year and a half….
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That all meshes with my numbers. I’ve done the bulk of the labor on my last couple, and come in around $165/sq ft cost of construction (no property). The current one will save a little on lumber costs but I’m making a few upgrades too, might end up a wash cost wise.
 
Hem said:
I honestly think $250 sqft is hard pressed.
Just saying.
The integrity of the build might be shocking.
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I agree if you’re subbing out all the labor. I’m probably not the best person to ask for an all in build cost on the lower end homes because I tend to be a tightwad and do a majority of the labor on all my own personal homes.
 
Carl said:
That all meshes with my numbers. I’ve done the bulk of the labor on my last couple, and come in around $165/sq ft cost of construction (no property). The current one will save a little on lumber costs but I’m making a few upgrades too, might end up a wash cost wise.
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I think my personal home build cost for materials only was @ $135 per square foot in 2020. However, I blind lucked out on the timing of most of my materials by purchasing before July of that year. By October material prices were probably 40% higher.

The most extreme difference was that I paid $16 per sheet of 5/8” OSB when I started framing. A year later I had to buy a couple sheets to finish framing a garden shed. Those cost me $73 per sheet.🤯
 
Gerald Martin said:
I think my personal home build cost for materials only was @ $135 per square foot in 2020. However, I blind lucked out on the timing of most of my materials by purchasing before July of that year. By October material prices were probably 40% higher.

The most extreme difference was that I paid $16 per sheet of 5/8” OSB when I started framing. A year later I had to buy a couple sheets to finish framing a garden shed. Those cost me $73 per sheet.🤯
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Framing material swings were wild for a bit there. I started one in March of 2020 and had the same good fortune on materials as you.
 
Gerald Martin said:
I think my personal home build cost for materials only was @ $135 per square foot in 2020. However, I blind lucked out on the timing of most of my materials by purchasing before July of that year. By October material prices were probably 40% higher.

The most extreme difference was that I paid $16 per sheet of 5/8” OSB when I started framing. A year later I had to buy a couple sheets to finish framing a garden shed. Those cost me $73 per sheet.🤯
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My living room is lined with osb under the sheet rock so I can hang stuff anywhere. The builder forgot about it and he ended up eating the cost of it. We moved into it right when Covid hit it was 8 a sheet then
 
Rie Bread said:
I wonder how they calculate median home price. Sure lot of million dollar mansions selling in Montana.
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Median should be a better representation than mean as far as removing the noise of $40k trailers and $4M mansions. Not sure what their timeframe is for the analysis, but it's the middle house, ie an equal number of houses sold for more and sold for less.
 
Elky Welky said:
From this article: https://billingsgazette.com/news/lo...cle_ba2c0042-a9d7-52dd-9f12-4b7cccf9d7a9.html

From 2018 to 2023, the median home sales price in Montana rose from $266,473 to $505,419, according to the Montana Association of Realtors. That’s an eye-popping 89.6% increase. In that same time frame, U.S. Census Bureau data shows the median household income in Montana rose from $55,328 to $70,804, a relatively paltry 27.9% increase.

Wage increases in Montana are not even close to keeping up with housing price gains.

I entered the job market in my current field in 2018, started watching the housing market then, and my wage increase percentage has tracked right along with this data. I see no reason to even try to get a house at this point.
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I have some problems with the measurement. Assigning "Median" price increases to all homes probably makes sense for the NAR but is not necessarily a clear reflection of the market. The housing market is messed up for a variety of reasons and in a variety of ways. As people have pointed out, there is a lot of noise in the data. About one in 12 homes in Montana are second homes (NR owners), about a third don't have mortgages, and about a third of the new transactions are being done for all cash. The attractiveness of Montana as a place to own a vacation home is skewing a lot of the affordability. Most second homes bought for cash are markedly different than a house a resident worker is taking out a mortgage on. Lower rates might help. But I say "might" because I'm not sure how anything gets fixed in housing. Builders can tell you selling to a rich buyer is more profitable than building multi-family or starter homes.

From NAR,
Median price of Existing Single-Family Home Sales: comes from the existing home sales monthly survey conducted by the National Association of Realtors®
 
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If the state of Montana knows of any Chinese owned farm land they want to seize, I would totally GC a 100 or 1000 single family homes. Let’s put a legal binder on them where they can only ever be live in, in state, one home owners. Maybe gimme some gov subsidies, I promise I’ll put em to better use than the guys who got the contract for the train to nowhere. Gotta be some Chinese land outside three forks.
 
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