How is the Covid-19 Coronavirus Affecting the Bozeman Real Estate Market?
by Tim Ford
The coronavirus is affecting the lives of Americans and Bozemanites like nothing else has in my lifetime. My family and I are trying to navigate our new daily routines as my wife and I now try to both work from home while simultaneously trying to home school our young children. For those essential workers that have been working the front lines, I want to say Thank You so much for everything you’ve done to help our community.
I have fielded a lot of calls from friends and clients wondering what is happening in real estate. Are homes still selling? Are there any buyers out looking? Let’s dive into that.
The short answer is Yes. Homes are still selling, buyers are still out looking. However, there have been changes in the way we do business and the activity we’ve seen. I’m writing this on April 22nd, 2020. We are currently waiting to see whether Governor Bullock will continue stay-at-home orders and school closures, or whether we’ll start to see a gradual reopening. So, I’m sure depending on when you’re reading this, a lot may have changed.
One piece of data I’ve been monitoring is the number of homes that have gone pending this year, starting on the Monday of Spring Break, and then comparing that to the same time period last year. Since it’s such a short period of time, one big day for sales can really swing the number, so it’s definitely not a perfect indicator, but at least it gives us a sense.
With the school closure issued on Sunday, March 15th, that first week really didn’t see a big shift. However, the following week, when the stay-at-home order was issued, we did see a large reduction in the number of contracts. But, as buyers became adjusted to the “new normal,” the number of new contracts started to march back up.
The following data includes the number of new contracts for all types of residential homes in Gallatin County, including single-family homes, condos, & townhouses.
Being roughly five weeks out from the school closures, we’re currently hovering around 84% of the activity from last year. There’s two ways to look at that data. I could see some read it and think, “16% drop in new contracts! That’s terrible.” However, if one looks around town at all of the businesses that are shuttered and the level of market activity elsewhere, (you can park wherever you want in downtown Bozeman!) this actually looks like pretty strong activity to me. All things considered, I wouldn’t have been surprised if we were only seeing 10% or 25% of the “normal” market activity. One also has to remember that 2019 was a very busy year for real estate in Bozeman.
What about showing protocols? We’re definitely changing the way we’re doing business during this pandemic. First and foremost, if buyers have had any signs of illness, whether or not those signs align with coronavirus symptoms, we’re asking them to stay home.
Even for those feeling well, we’re often trying to start with a Face Time tour or video walkthrough. The number of homes offering virtual tours has also increased dramatically. If a buyer is taking that next step to tour the home, we’re taking a lot of precautions to minimize touching of surfaces and instituting social distancing.
For those of you who own investment properties, are completing 1031s, or are looking at the Opportunity Zones, this is a time to keep current on the constantly changing guidelines and relief efforts. The IRS just issued extensions for those involved in 1031 like-kind exchanges or capital asset sales that were earmarked for Opportunity Zone fund purchases.
It will be very interesting to see how things pan out in the coming weeks and months. A recent survey by the National Association of Realtors noted a majority of Realtors predict the market will rebound once the pandemic is over.