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THE STATE OF THE REAL ESTATE MARKET IN BIG SKY

Another day in paradise​

February 14th, 2017

2/14/2017

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Winter 2016-2017
Another day in Paradise
By Stacy and Eric Ossorio
“Its magical.” We hear that a lot from visitors to Big Sky.

Well, it is magical here. If you are reading this, you know. Sometimes we take things for granted and need a reminder of why this place is so special. Sometimes it takes a visitor to remind us. 
The fact is, Big Sky is growing by leaps and bounds. Its not because anyone is compelled to be here. Its because so many people choose to be here and want to be here. Many lucky locals have made Big Sky their home. Many lucky visitors choose to make Big Sky their second home. Sometimes after their first visit.
So, what is that compels people to decide to rearranged their priorities to allow Big Sky to become a part of them? What view amazes them? Which location calls them into the woods, or to a nearby trail? Which building style strikes a chord? Which of our three Club option suits their lifestyle?
There are not many places in the Rocky Mountains that clobber you with such a compelling and dominating alpine view: the silhouette of Lone Mountain on the western horizon.
Big Sky is poised for $1 billion in development investment over the next 10 years. The planned investment is the response to many factors, but can be boiled down to the very rational desire of so many people to enjoy the combination of unparalleled beauty, unparalleled out door recreation and the respect of nature reflected in the development of the area.
That rational desire sometimes leads to irrational, though thoroughly human behavior. The desire to be a part of Big Sky can be compelling and people often choose to belong to something that is unique and vibrant, and they rearrange their priorities accordingly. Fortunately, comprising just over 120 sq. miles of area (compared to Vail, CO’s 4.5 sq. miles) Big Sky offers something for just about everyone. 
There are properties to fit all priorities: from condominiums, to single family residences, to fairway-side golf course or ski-in, ski-out lots to 20 acre tracts and larger.  Compelling vistas are everywhere: there are no bad views. 
As demand for Big Sky continues to put pressure on the existing built inventory, we see that land has reemerged as an attractive acquisition, allowing for a lower cost alternative to some speculative development and with the opportunity to create one’s own vision when the time is right. 
Exploring the abundance of opportunities can be daunting, as there are many factors to consider: proximity, neighborhoods, access, topography, cost of ownership. We have lived here for 25 years and know the lay of the land, and would be happy to help you connect the dots in our growing community.

Stacy and Eric Ossorio are brokers with Berkshire Hathaway Home Services Montana in Big Sky. They both previously were brokers with Cushman & Wakefield of New York. Stacy is a graduate of Greenwich Academy  and Lehigh University. Eric is a graduate of St. Mark’s School in Southborough, MA and Vassar College.  To contact Stacy, call 406 539 8553, or Eric at 406 539 9553.
email: [email protected] or [email protected] ​

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The state of the real estate market

11/14/2016

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As followers of this semi annual market update will see, annualized activity levels in the Big Sky market took a noticeable upturn over the past 12 months. 
Activity levels are strong across the board when looking at all classes of real estate. The number of listed properties increased only slightly from 448 to 461 year over year, with an asking market value of $568,173,127 (vs. $608,900,000 for the previous year). The discrepancy in dollar amounts is predominantly due to some of the very upper end inventory pricing, where we have 20 properties priced between $5,000,000 to $15,000,000. Last year, there were slightly more super luxury properties listed.
On the other hand, the number of sold properties jumped from 282 to 318, 36 additional properties, or a 14% increase in volume, with a sold value of $238,228,698, a 25% increase over the $180,000,000 sold value of the previous year, illustrating that the additional 36 units, including several high value luxury property sales, contributed to the $58,000,000 increase is market valuation.
There is now an evident lack of homes on the market in the $400,000 - $600,000 price range. For people in the market for their first home, or looking to upgrade from their first home, there is not much available. This lack of inventory has pushed this Buyer to the condo market where there has been a flurry of activity in complexes like Firelight and some of the older Meadow complexes. This market should continue to thrive for some time due this type of demand.
The mid range condo market ($500,000 - $695,000) has been slower to catch up. Perhaps because that Buyer preferred a house while homes were available. Clearly, the current lack of inventory of homes in that price range would support that conclusion. But now that home inventory has been snapped up, we expect to see condo inventory get sold this winter. There are some great options out there in the Meadow, (Spanish Peaks Club), Mountain (Alpenglow) and new construction in the Town Center. Most of these condo units are large, sell fully furnished and have high end finishes and appliances.
We’re still seeing some pricing settle at the very upper end of the market, but inventory constraints this past year and consistent demand are steadily pushing prices over all into higher territory, which in turn is fueling an increase in inventory. A noticeable addition to inventory is the re emergence of developers back into the market building speculative condos and home starts, in Moonlight and the Spanish Peaks Mountain Club. These Clubs offer private golf course access, ski in ski out terrain, dining and enhanced homeowner association activities and amenities.
Prime lots and land remain value propositions and have a lower cost of ownership for those with patience. For those who really enjoy the process of designing and building a home you can get exactly what you want. We think this will go back to being an attractive option as the price difference between the new spec properties and custom construction per sq. ft. narrows. 
As in any market, however, some Sellers are taking a bit longer to find a Buyer when the asking price and value proposition are less obvious. There are over 55 properties that have been listed for over 12 months (several for multiple years) patiently waiting for the market to come their way. 
Some background: 
The Big Sky area encompasses 228 mi.², or approximately 146,000 acres. Approximately 100 mi.² are in areas that are either developed or can be developed. The balance, approximately 228 mi.² is surrounding Forest Land, Wilderness, animal habitat or unlikely development. 
Within the 64,000 acres comprising the Big Sky real estate market area, there are:
Currently, 461 properties listed in the greater Big Sky market (which now includes some listings at the Yellowstone Club), with a market value of $568,173,127. List prices range from $95,000 for vintage Meadow Condo to $15,000,000 for a unique ski in ski out home in Moonlight’s Cowboy Heaven. 
261 of the listed properties are valued at under $529,000, and the other 1/2 over $529,000. Of the 231 properties listed over $529,000, 85 are priced between $500,00 and 1$ million, 75 are between  $1MM and $2,000,000 mark: 31 priced between $2MM and $3,000,000: 16 priced between $3MM and $4,000,000: 7 priced between $4MM and $5,000,000: 20 properties priced over $5,000,000.
Of the 228 properties listed under $500,000, 95 are priced under $250,000, and 137 are priced between $250,000 and $500,000. 
Over the $500,000 mark, 87 are priced under $1MM, 51 are between $1 and 1.5 Million, 23 between $1.5 and $2Million and the balance run all the way up to $15Million, including 6 properties in the Yellowstone Club. 
On the sales side, 75% of all sales were under $500,000. 
47 properties were land sales, ranging from $116,000 to $500,000 subdivisions lots. Almost 25% of land sales under $500,000 were in Cascade in the Mountain Village, a traditionally second home market. A full 50% (24 properties) sold were in the Meadow area, which is traditionally more of a full time and locals residential area. The balance of the sales (11 properties) were in the Canyon.
Of the 13 land sales that comprise the 25% that sold for over $500,000, high end pricing was represented by 3 lots in the Yellowstone Club ranging in price from $1.8 to $3.5 Million. A development tract in the Meadow closed at just under $2MM after 2 years on the market, and an auction of 13 lots in 260 acres resulted in a sale at $1.5 Million south of Big Sky.
On the commercial side, 13 properties sold including commercial condos, rental properties and commercially zoned land.
233 residential properties sold this past year with a value of $175,000,000 , up from 211 and $152,000,000 value for the prior 12 months.
While these statistics can be confusing, the overall trend that is developing is that absorption is increasing, pricing is inching up and inventory levels that were in decline are now being augmented by developer speculation.
Big Sky continues to expand and broaden its appeal to second home owners and those wishing to call the mountains of Montana home. Infrastructure enhancement in the form of fiber optic cable, increased electrical power capacity, road and interchange improvements are all underway in response to, and in anticipation of, the continued popularity of the area, and will provide residents in Big Sky state of the art convenience.
In most cases, investigating and understanding various locations/neighborhoods, adjacencies and proximity to services, and exploring the Club options and their long term costs of ownership can be complicated and not self explanatory. We know the lay of the land and are here to help.​

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August 01st, 2016

8/1/2016

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It's almost summer and the Big Sky Real Estate market is doing fine. 
While there are still some pricing adjustments at the upper end of the market anticipated in order to find the activity level between supply and demand, the pricing adjustments at the lower end are moving up as demand has outpaced supply. 
There is no question that well priced properties and properties that are perceived to offer value are getting snapped up at a rapid pace. There are a few properties, however, that are taking a bit longer to find a Buyer when the asking price and value proposition are less obvious.
So what does this mean:
The Big Sky area encompasses 228 mi.², or approximately 146,000 acres. Approximately 100 mi.² are in areas that are either developed or can be developed. The balance, approximately 228 mi.² is surrounding Forest Land, Wilderness, animal habitat or unlikely development. 
Within the 64,000 acres which comprise the Big Sky real estate market area, there are:
Currently, 448 properties listed in the greater Big Sky market (which now includes some listings at the Yellwostone Club), with a market value of $608,900,000. List prices range from $75,000 for commercial Condo to $16,500,000 for a spectacular home on 1,500 acres Moonlight’s Jack Creek area. About 1/2 of the listed properties are valued at under $529,000, and the other 1/2 over $529,000. Of the 249 properties listed over $529,000, 109 are priced between $500,00 and 1$ million, 71 are between  $1MM and $2,000,000 mark: 25 priced between $2MM and $3,000,000: 17 priced between $3MM and $4,000,000: 3 priced between  $4MM and $5,000,000: 24 priced over $5,000,000.
Of the 241 properties listed under $500,000, 100 are priced under $250,000, and 144 are priced between $250,000 and $500,000. Interestingly, there are 140 Condos listed. 91 Condos are in the Mountain Village. 49 Condos are in the Meadow Village. 76 are priced under $500,000, and 64 are priced from $500,000 to $9,800,000 (for a special place in the Yellowstone Club).
Over the past year, from May 31, 2015 to June 1, 2016, a total of 282 properties were sold, with a sold value of $180,000,000: including 67 land properties and 205 residential units sold. 10 were commercial sales (predominantly in a new commercial area in the Canyon).
 The low price point was $65,000 and the top of the market was $9,925,000.  3 properties traded on MLS in the Yellowstone Club for a value of $19,225,000. 
​235 properties sold for under $1MM. 87 properties sold for under $250,000: 91 sold for between $250,000 and $500,000: 52 sold between $500,000 and $750,000 and 13 sold between $750,000 and $1MM. 47 properties sold for over $1MM. 13 properties sold for over $2MM. 7 properties were over the $3MM level.
During the previous year (May 31, 2014 to June 1, 2015), a total of 339 properties sold, for a sold value of $238,000,000, including: 80 land properties and 240 residential properties. 19 commercial were commercial sales. 
The low price point was $69,000 and the top of the market was $17,000,000 for an extra ordinary property in the Yellowstone Club.  4 properties traded on MLS in the Yellowstone Club for a value of $33,125,000. 
283 properties sold for under $1MM. 123 properties sold for under $250,000: 103 sold for between $250,000 and $500,000: 48 sold between $500,000 and $750,000 and 20 sold between $750,000 and $1MM. 58 properties sold for over $1MM. 20 properties sold for over $2MM. 11 properties were over the $3MM level.
Activity levels have lightened up a bit, yet the quality of available inventory continues to improve, although some market segments are under pressure due to a lack of competitive inventory. Infrastructure improvements including NorthWest Energy and telephone and internet expansion and service upgrades are ongoing. The newly opened and operational Big Sky Medical Center is in full swing.
Big Sky has always been a great place to visit. Its also more and more a great place to live.
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    Eric Ossorio

    Long term Big Sky resident and active community member. 

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