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In red-hot Montana housing market, young cash-strapped buyer beats the system

In red-hot Montana housing market, young cash-strapped buyer beats the system

Note: This story is part of Squeezed Out, a series from Lee Enterprises that focuses on the escalating housing crisis in the West. Across the region, costs associated with renting or buying property have skyrocketed, forcing many individuals and families to redefine the meaning of home. More than one dozen reporters, photographers and editors across the West contributed to this project.

The toilet was sinking through the rotting floor, and there was damage from standing water in the crawl space. My heart was sinking, too. The shabby, little house I was hoping to buy would take $10,000 in repairs before I could even move in.

In the short time I had been daydreaming about becoming a first-time homebuyer in Billings, Montana, the housing market had changed dramatically. Two years ago, colleagues at the newspaper where I work as a staff photographer were buying their first homes in the $180,000 range, nice little clean bungalows in tidy, working-class neighborhoods.

Then came Covid and the in-migration of thousands of people fleeing urban chaos for the bucolic bliss of Montana. They brought with them their remote jobs and barrels of cash from the sale of their million-dollar homes in crowded cities like Seattle and Los Angeles.

In Montana university towns like Missoula and Bozeman, the already-escalating housing prices soared even more during the pandemic as homebuyers bid $50,000 to $100,000 — and in one case even $1 million — over asking price. And, they paid in cash, pushing aside anyone clutching tightly to a down payment and the promise of a bank loan.

Amy Lynn Nelson is photographed outside her home in Edgar.

In Bozeman, the average home price is now $900,000 and in Missoula it’s $600,000. In Billings, the average is “more affordable,” if you can call it that, at $410,000. Two years ago, the average price in Billings was $280,000.

With those kinds of prices in Billings, the housing stock available to first-time homebuyers like me is limited to a very few houses, the dwellings somewhere between a chicken coop and a ramshackle hut teetering on the verge of condemnation.

I started thinking seriously about buying a house last April, armed with $12,000 in savings for a down payment, and pre-approval from my bank for a mortgage up to $200,000. Even with the help of a state first-time home-buyer program, it took weeks of collecting tax documents, income verifications, student loan documents, credit reports, and so much more, to get the pre-approval. I was incredibly excited and my hard work was paying off. The house hunt was on and I was starting to get nervous.

Amy Lynn Nelson is photographed inside her home in Edgar.

Besides not having a truckload of cash, I had other home-buying disadvantages. I’m single, while most first-time homebuyers are couples with two incomes. I have a modest income of just under $40,000, and I have some immodest student loan debt.

On top of that, I’m younger than most first-time home-buyers. Currently, less than 1% of homebuyers are under age 25. I was 23 when I started house hunting and 24 when I moved in.

I started by browsing the listings obsessively, checking Zillow, Facebook, the MLS, Craigslist. In my metro area of about 168,000 people, and 47,000 houses, for the last year or so the number of homes for sale has averaged around 500, sometimes dipping to fewer than 300, according to Zillow.

Some weeks, I’d look at the only two or three houses listed in my price range. Some weeks, there weren’t any.

After looking at several very small and very old and very beaten-up starter homes, all of them too expensive for me, I pursued the sinking-toilet house with a glimmer of hope. The asking price was $210,000, and the owner wasn’t kidding in describing it as a “fixer-upper.” But, it was close enough to my downtown office that I could walk to work if I felt like it, and it was in a gentrifying neighborhood with a bright future. It was the best house in my price range in the entire city.

I bid all I had on the house and signed a buy-sell agreement with the homeowner. And then just what I feared would happen, happened. Within a day, someone topped my offer by many thousands of dollars over the asking price.

I was losing hope in the American dream of home ownership.

Amy Lynn Nelson is photographed inside her home in Edgar.

Growing up in rural northeast Montana, I was surrounded by lifelong homeowners. My parents were in their early 20s when they bought their first house in 1986 for $20,000. A few years later, they bought a small vacation cabin on Fort Peck Lake for $1,000.

Those five-figure house days may be over, but here I sit writing this essay in the living room of my new house. I beat the system because I have something those cash-drunk urban immigrants flooding into Montana don’t have. I have connections, and a willingness to adjust my expectations on how and where I wanted to live.

Those connections begin with my new boss and his wife, who when I moved to Billings last year let me stay rent-free in their house so I could save up down-payment money. My boss has lived here 40 years and knows everyone, including someone in real estate. That someone knew someone who was getting ready to sell her mother’s house and may be agreeable to a private deal.

There was a catch. The house was 35 miles away in Edgar, a tiny old ranch town with one bar and about 100 people. Edgar had not been on my radar, but I agreed to look at the property. I was still burning up to buy a house and saw homeownership as more than a financial investment, it was an investment in myself and my future.

Having grown up in rural Montana, I was not unfamiliar with country living and was willing to make it work. I was pleasantly stunned by the fertile agricultural beauty of the small town. The house sat on a generous lot with friendly neighbors on each side and a backyard that bordered on a cornfield.

I walked in the back door and my jaw dropped. The home had recently been remodeled and had been well cared for, a strong contrast to the other properties I had looked at. The two-bedroom, one-bathroom home had a modern country feel that instantly felt like home. With a large deck, a two-car garage, a beautiful yard, I knew it was the right move for me.

The asking price was $190,000 and that day I started the process of getting it under contract to buy. The fun part had finally begun. In the six weeks it took to close the deal I started shopping for the furnishings and necessities I would need to make it a home. And, by shopping, I really mean scavenging, because I had no more money.

I bargain-shopped at weekend estate sales, garage sales, and Facebook Marketplace. I was able to furnish my entire house for under $1,500, including finding a log bed for my master bedroom for just $160.

By the end of July, I had finally closed on my Edgar home. I learned a lot about the home-buying process and the state of the market during my journey. Perhaps more than anything, I learned the importance of using what you’ve got, flexibility and personal connections and persistence, to make your dreams come true.

Now, here I sit, a young, non-traditional buyer in my very own home. The American dream is real, and mine has a cornfield out back.

Amy Lynn Nelson inside her home in Edgar.

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