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 will affect 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.
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 has been 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.
The next phase of reopening – Phase 2 – will take place on June 1st according to a press conference given by Governor Bullock on May 19th. The 14 day visitor quarantine will expire 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 will open 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
Real estate was listed as an essential service under the stay home order 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 currently working remotely and our broker and agents are 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 on access, and the opportunity in certain situations for online closings.
Currently, until June 1st, visitors from out of state that are not here for work purposes are still being ordered to quarantine for 14 days upon arrival in Montana. On this note – according to Montana Association of REALTORS®:
In seeking clarification from the Governor’s office we have been informed that if someone is coming to Montana in search of housing they may be shown homes or other properties and not be subject to the quarantine as long as they just do their home search and then immediately leave the state. If they choose to extend their stay for any purpose beyond the home search, they will be subject to the quarantine. More at https://www.montanarealtors.org/about/covid-19-info-resources/#FAQs
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 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 a good clip – land has been a bit slower paced. This is an interesting article from Curbed on how COVID-19 is affecting the real estate in their option. https://www.curbed.com/2020/3/6/21163523/coronavirus-economic-impact-housing-market
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 have taken 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 indicate that there will be a 2-3 month ‘hole’ in what our projected sales volume would have been in Quarter 2 and part of Quarter 3. That being said, these same economists and strategists agree that the real estate market will have a pretty fast rebound and it already has started to rebound in our market.
Prices have not appeared to be hugely impacted yet by the crisis, but there hasn’t been the spring appreciation bump we’ve become accustomed to. With the snap back, quite a bit of ground will most likely be regained during the final quarters of 2020 – however, it will likely not fully recover right away – possibly until late in the year or early next. 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 nation wide as seller’s 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) and pushing back the 2019 IRS filing and payment deadline to July 15. 1031 exchange and opportunity zone investment deadlines have also been extended. 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 become very volatile due to several factors but great rates are still possible. 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. Black Knight, Inc. – a provider of software, data and analytics in the mortgage and real estate industries, released on April 2nd a white paper on their opinion of the effects of COVID-19 on the mortgage and real estate industries. https://www.prnewswire.com/news-releases/black-knight-releases-covid-19-white-paper-providing-in-depth-evaluation-of-pandemics-impact-on-the-housing-and-mortgage-industries-301034381.html