As we continue to navigate the COVID-19 pandemic, life is starting to feel like we’re entering a new normal. People are adjusting to working from home, kids are learning in a variety of ways and the stores have restocked on toilet paper. Of course, there are still many unknowns, how long it will last, will the economy recover, should you still consider making a big decision like buying or selling your home? While we don’t have the answers to all of those questions, we can provide insight into the real estate market. We saw real estate change in the early stages of the pandemic but it has come back strong, especially in Bozeman with an influx of new residents moving to the area.
With the uncertainty of the long-term effects on the economy due to the pandemic, there is a real concern about a global recession. However, it’s important to remember a recession does not mean the housing market will crash. In the last four recessions, residential real estate has only depreciated once (Houseloanblog.net). Right now looks very different than the housing crisis of 2008. Subprime mortgage lending and excessive risk-taking in the financial industry were huge contributors to the crash of 2008, and neither of those is present currently. Market conditions have been much different this time as are the issues causing it. We have seen the market recover rather quickly and continue to remain stronger than we've ever seen it here in Bozeman. While there is no indication that real estate in Bozeman will slow down, as we've seen with Covid, things can change quickly! If things do shift and we see a downturn, it can still be a good time to buy or sell a home.
Selling a Home During a Down Market
With more people working remotely, everyone is on their computers and phones more than usual, which means real estate websites are getting viewed! You may consider waiting for things to calm down to put your home on the market, but with so many people online your house might get seen more. Currently, the majority of listings have virtual tours, video walkthroughs or options of Facetime tours. We have even seen several homes go under contract, sight unseen. This means that as soon as things return to normal there will be a lot of buyers ready to make a move. Buyers will have done extensive research online on particular homes and will be ready to take the next step, so you want your home to be a contender. Some sellers may have concerns about days on the market, but most people understand why this number may be higher than usual during a downturn. Another valid concern is that you may have to price your home lower in a down market. While this is true, Bozeman currently has high home prices so slightly lower asking prices are not going to hurt as much.
Buying a Home During a Down Market
For buyers, mortgage rates are nearing record lows. The Federal Reserve has been working to stabilize the mortgage market by buying treasury bonds and mortgage-backed securities to help push the rates to the current lows (Yahoo Finance). This makes it an ideal time for homebuyers to take advantage of these low rates and to purchase a new home. During a down market, homes tend to sell for lower prices. Sellers may be more likely to negotiate and you won't see as many multiple offer situations like we have been seeing in our real estate market in Bozeman. While some sellers can wait for things to calm down to list their house to increase their chance of getting full-price offers, many don’t have a choice. They may have a job transfer, family circumstances or financial reasons they need to sell in this down market.
Bozeman entered this slow down with a very strong real estate market and we were getting ready to enter the busy season. Things all but stopped while agents, mortgage lenders, title companies, and banks scrambled to adjust to all the changes in the industry. This did not last long, and the market has come back stronger than ever. As a community, Bozeman has always supported local businesses and helped each other out and this is all the more evident right now. While we can't predict the future, from what we have seen Covid is not slowing down the real estate market anytime soon in Bozeman.