News from the Knoff Group

COVID-19 and the SW Montana real estate market

COVID 19 SW Montana

During this unprecedented time in our world, we’d like to share some of our thoughts, opinions and a little Q&A on how we think the COVID-19 crisis has affected real estate in the SW Montana including Bozeman, Belgrade, Big Sky, Livingston, Manhattan and greater Gallatin, Madison and Park Counties.

We will be updating this page as more information becomes available on this ever changing situation.

We’re here as a resource for you – please send us a message with any questions or give us a call at 406-924-9559.

Be safe, be well, stay healthy.

Sincerely,

Marcie Hahn-Knoff

Owner | Broker

Knoff Group Real Estate

How does the phased reopening of Montana’s economy – Phase 1 & Phase 2 directives and plan by Governor Bullock affect real estate in Montana? 

Directive and plan for a phased reopening at the state level was released as of the afternoon of April 22nd. See directive here: https://covid19.mt.gov/Portals/223/Documents/04-22-20%20Directive%20and%20Appx%20-%20Reopening%20Phase%20One.pdf?ver=2020-04-22-124954-977 and phased plan here: https://covid19.mt.gov/Portals/223/Documents/Reopening%20Montana%20Phased%20Approach.pdf?ver=2020-04-22-115707-770 Plans have been adopted at the county level.

Phase 2 became effective on June 1st. The 14 day visitor quarantine expired at that time. Article outlining the plan can be found here: https://www.explorebigsky.com/phase-2-reopening-starts-june-1/34431. Yellowstone National Park opened it’s borders from the Montana side on June 1st as well. Article here: https://www.explorebigsky.com/bullock-opens-ynp-entrances-offers-gateways-monetary-aid/34572

A statewide mandatory mask directive was instituted by the governor’s office on Wednesday July 15th for all counties who currently have four or more active cases of COVID-19. This directive applies to certain indoor spaces and certain organized outdoor activities with 50 or more people in attendance where social distancing is not possible. More at https://www.explorebigsky.com/gov-steve-bullock-issues-statewide-mask-mandate/35185

On July 24th, Gallatin County adopted a more stringent Mask Mandate – The order requires the use of face coverings by most people within most indoor public settings, which includes mask wearing for construction sites and K-12 schools. Read more here https://www.healthygallatin.org/coronavirus-covid-19/public-health-rules/

The Montana Association of REALTORS® has mandated that masks be worn by all visitors to open houses, all attendees to showings and all visitors to real estate offices. Real estate offices, homes where an open house is taking place, in-person closings, and individual home showings all fall under the Mask Mandate. Agents, clients, and any other people present must all wear face coverings, unless they fall under an exclusion. The following are excluded from the face covering requirement under the Mask Mandate:
• Children under the age of five;
• Persons seeking to communicate with a hearing impaired person;
• Persons eating or drinking;
• Persons temporarily removing their face coverings for personal identification purposes;
• Persons with underlying medical conditions precluding the safe wearing of a face covering.

On November 6, 2020 the Gallatin County Healthy Department instituted to the following restrictions to curb the spread of CV-19:

  • Moving the mandatory closing time for bars, tasting rooms, distilleries, casinos, bowling alleys and restaurants from 12:30 a.m. to 10:00 p.m., and limiting group size at tables to six people.
  • Requiring that higher-risk businesses—gyms and fitness centers, places of assembly, bars, restaurants, distilleries, casinos—limit the number of patrons to 50 percent capacity, down from 75 percent of capacity.
  • Limiting group gatherings to no more than 25 individuals, down from 50, regardless of the ability to physically distance, for both indoor and outdoor events.
  • Exceptions will be made for businesses and organizations where social distancing is most feasible, including houses of worship and other places of assembly.

On November 17th Governor Bullock’s office announced new requirements going into effect as of November 20th – these include:

Restaurants, bars, breweries, distilleries and casinos in the state will be limited to operating at 50% capacity and must close by 10 p.m., Bullock said at a press conference Tuesday afternoon. Table seating will be limited to six people, reduced from the current limit of 10, and establishments are still required to maintain social distancing.

In addition, Bullock said, public gatherings where social distancing isn’t possible or practiced will be limited to 25 people. 

The state’s mask mandate will now apply to all 56 Montana counties, regardless of the number of active cases in a county.

The new orders don’t apply to places of worship, which continue to have gathering limits of 50 or fewer if social distancing is practiced, and schools.

Real estate was listed as an essential service during the crisis, as were lending, title and appraisal services so we’ve been working this whole time.  This doesn’t mean it’s ‘business as usual’.  Knoff Group Real Estate is connected and available for questions. Steps are being taken to reduce the potential for transmission of the virus, including changes at title companies and banks, and the opportunity in certain situations for online closings. 

The virtual online Matterport tours that we offer on all of our built properties give buyers an opportunity to see homes without leaving their own. Video-Facetime-Zoom-Messenger tours may be arranged as well. In-person ‘no-touch’ showings with sanitizing measures have been instituted on many properties and Knoff Group Real Estate is following NAR guidelines, MAR and state and county mandates and directives for client showings and meetings.

Are properties still being bought and sold?  Yes they are. People still need to buy and sell properties, even during times of pandemic or crisis. Habitable properties are going under contract at record pace and land sales have shot up this year as well.

Has the COVID-19 pandemic affect the real estate market in SW Montana?  Yes – it has.  Due to the financial fallout from COVID-19 and social distancing – self quarantining measures, many buyers took a step back from their active property hunting.  Many sellers have held off on bringing properties to market.  The economists and strategists we’ve been following indicated that there was a short 1-2 month ‘hole’ in what our projected sales volume would have been in Quarter 2. That being said, these same economists and strategists agree that the real estate market is rebounding past any expectation and the market here is quite robust in most segments. Inventory is the biggest issue – or lack there of – that we are facing right now.

Prices have not been negatively impacted by the crisis, and there has been a summer, rather than spring, appreciation bump. With the snap back, quite a bit of ground has been regained and will continue during the final quarters of 2020. On another note, many buyers continue to find our SW Montana real estate market attractive due to our accessibility to rural and natural places and the lower density of our population. See this recent article from Redfin https://www.redfin.com/blog/urban-vs-rural-homebuyer-interest-coronavirus/

This is an interesting breakdown by Zillow Research on Information from Past Pandemics https://www.zillow.com/research/pandemic-literature-review-26643/  – also a detailed breakdown of reduction of portal visits on the top real estate portals by Mike DelPrete https://www.mikedp.com/articles/2020/3/26/real-estate-portals-see-up-to-40-drop-in-traffic-leads  And an article by Montana Land Source on projected impact to larger land sales https://mtlandsource.com/news/coronavirus-impacts-montana-land-market?utm_source=Weekly%20Market%20Update%20email&utm_medium=email&utm_campaign=Weekly%20Market%20Update%20email

What makes the COVID-19 pandemic economic crisis different?  This economic crisis is tied is both a supply chain problem and a demand problem caused by the COVID-19 pandemic, that was exacerbated by an oil pricing war and the unwinding of leveraging in the stock market.  Real estate inventory is dwindling nationwide as sellers hold their homes off market. See this article from Redfin on some interesting statistics as of April 2nd. https://www.redfin.com/blog/coronavirus-housing-market-impact/ How this eventually plays out is still unknown. But the federal government has just passed Stimulus Bills and there are numerous other adjustments that have been made including relief for homeowners having issues paying their mortgages (see HUD statement https://www.hud.gov/press/press_releases_media_advisories/HUD_No_20_042). See this article for more information https://magazine.realtor/daily-news/2020/04/10/irs-extends-more-tax-deadlines-for-individuals-businesses

I’ve heard that mortgage rates are great right now – is this true?  Mortgage rates have been amazingly low! It is best to speak with a professional lender that specializes in the SW Montana market to get a better picture of what is currently happening and to help you set your expectations appropriately.