By Tyler Allen Explore Big Sky Senior Editor
On Jan. 30, Explore Big Sky sat down with Big Sky Sotheby’s International Realty broker Tallie Lancey, Big Sky Town Center project manager Ryan Hamilton and Fercho Gallery & Elliott Design co-owner Lori Elliott for a roundtable discussion about the state of the real estate market in southwest Montana. Scott Bechtle, owner of Bozeman-based Bechtle Architects, was interviewed by phone on Feb. 3.
Explore Big Sky: Southwest Montana is rebounding at a steadier clip than much of the state, what do you attribute this to?
Tallie Lancey: There’s been so much community effort to improve Big Sky during the recession, I think those efforts have allowed us to springboard ahead. Even though we weren’t selling a lot of real estate it doesn’t mean we weren’t adding a lot of value to the community. I think the Yellowstone Club is leading the way – the evidence of the trickle down effect is obvious.
Ryan Hamilton: Bozeman is just a great place to live – amenities, culture and flights [out of Bozeman-Yellowstone International Airport]. Big Sky has the amenities too, with the resort and [Warren Miller] performing arts center. With the Yellowstone Club investment – and I’d add Lone Mountain Land Company – all the resorts are healthy and they’ve capitalized. Many places around the country are getting more congested, and southwest Montana is a beneficiary of that.
Lori Elliott: There are things to do here … it’s a fun place to be. The people that have been here helped create this, but there’s not affordable housing. It’s an ongoing problem.
Scott Bechtle: I think it’s people just have confidence in the economy. With the downturn a lot of people with money held onto it, now instead of investing in the stock market they’re buying real estate.
EBS: Is this a temporary growth pattern? If not, how is this economic growth going to be sustainable?
TL: We’re going into this next growth trajectory with so much more of a solid footing – the flimsy mortgage products are not available [anymore]. People remember how bad it was and are being more cautious.
SB: I think that everything is cyclical. Normally, it’s every five years, but I think we have a ways [to go] still with this uptick. Resort towns are the last to slow down, and the first to pick up. [Bechtle has] been swamped. I’m looking to hire because it’s busy and I think it’s going to stay busy.
The Big Sky area resorts have CrossHarbor [Capital Partners] involved to keep things stable – there wasn’t that financial stability before. And with Boyne teaming up, we’ll see some capital improvements in the community that will give other people confidence to invest in the area.
EBS: How do you compare this development boom to the last one in the mid 2000s?
TL: I don’t think we knew any better. It was giddy confidence, now it’s wise confidence, more mature. Big sky is more self-sufficient now.
RH: Originally [Big Sky] was a company town, everybody did their own thing. It’s largely driven by one vision and master plan now. The community has matured and evolved with the pillars and services we’ve built: a grocery store, a high school [and] a movie theater among others.
LE: I’ve noticed people that have come into the gallery, that don’t live here all year long, are excited they don’t need to make the two-hour trip to Bozeman.
SB: I think it’ll be a long time before there’s anything like that – it was like drinking from a fire hose. It was fast and furious.
EBS: What trends are you seeing in both residential and commercial building?
TL: What I’m seeing is the most activity is closest to the mountain – single-family lots, condos, homes – that’s where we’re going to see the most appreciation. I think we’re going to see a commercial corridor in the canyon [south of Lone Mountain Trail] … the canyon is so much more affordable.
RH: The community will grow as the market grows. We’ve been developing Town Center for 10-plus years and we’ll grow as the market, the community, and the resorts grow. More part-time residents stay here longer … eight years ago that wasn’t happening as much. If the community is going to grow, you need the residential [building] to support it.
SB: You still have people that come to Big Sky for the rustic feel, but [home design is] going towards more clean lines, open floor plans, big glass windows, [and] thin roof lines.
EBS: Are you seeing more or less leverage – or borrowed money – from buyers versus the last boom? What percentages of recent sales are being purchased with borrowed money versus cash and which way is it trending?
TL: I’m seeing more deals being financed. During the recession almost all of my deals were cash. Now with lending products that are so attractive, people that could pay cash are borrowing. I think all of my buyers who are borrowing are doing so very conservatively. I think peoples’ memories are pretty good [and] our collective wounds are still fresh. It’s unusual to see people putting less than 20 percent down.
SB: Most of the stuff I’ve been working with in Town Center and Bozeman is leveraged money, not just cash … unless it’s going to be your retirement or play home usually people are leveraging the money.
EBS: Why do people pick southwest Montana to buy real estate over other mountain communities?
TL: Because Big Sky is so young and there’s so much room for growth. Fifty years ago there were just sheep here and it’s still possible to get in on the ground floor here. Another thing that distinguishes Big Sky from other mountain resorts is the proximity to Yellowstone National Park.
RH: Someone said to me the other day Big Sky is unique because of the wildlife here – the moose, the elk and sheep – in other mountain communities you don’t see that. The airport is also a huge driver of the economy here.
TL: And the university.
SB: If they’re not going to Aspen or Breckenridge [Colorado], they’re coming here because there’s all the amenities, and it’s cheaper … there are less people, the best skiing, accessibility with the airport and to the park. It’s still in its infancy because it’s still young and there are more opportunities [here].
EBS: How are we going to protect that quality of life?
TL: I don’t know what the answer is. We don’t have a major metropolitan area within a 6-hour drive. We’re going to be in the middle of nowhere for a long time. We’re an island surrounded by public lands – Yellow Mountain will always be Yellow Mountain.
RH: In Big Sky we know where the build out is, it’s a matter of hitting the finish line. Big Sky is maturing to be a more multi-generational place – kids, parents and, now with the hospital, grandparents can live here. Big Sky is about 40 percent built out, so we’re roughly halfway there. I’m not saying it’s going to be the same, but the charm will remain.
SB: I don’t know how you keep people from coming – I’m a pretty big proponent for planning for responsible growth … Like the Simkins did [with Town Center], it’s going to be a nice downtown area when it’s built out. It’s going to be one of the newer resort towns [in the country].