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 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.

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.

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 a good clip – as has land.

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 indicate that there was a short 1-2 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 is rebounding and the market here is quite robust in many segments. Inventory is a big 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 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 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.