As trusted real estate agents it is our duty to stay on top of all the latest information in regards to how the COVID-19 pandemic is affecting our local markets here in Big Sky and Bozeman, MT. These uncertain times also bring about many questions when it comes to how your life and future plans may be impacted over the next few months. Greg and I aim to be a trusted resource during these confusing times. Below we’ve compiled thoughts from economists, industry leaders and our personal perspectives to shed some light on the current state of the real estate market. The long is short of it is this: don’t panic. This too shall pass, likely quicker than you think.
Please be sure to follow along on our Facebook and Instagram pages where we will be posting often with news updates, insights and some entertaining content as we all navigate our way through this together!
Understanding how the real estate market may be impacted by COVID-19
We’ve delved into the data, trends and perspectives of economists and real estate thought leaders. The viewpoint, in short, is this: because the current economic uncertainty is not directly related to economic ties, but rather to the coronavirus outbreak, the market will bounce back with strength. While corona virus is still a topic of uncertainty, things will slow down. But as soon as this passes (and it WILL) we expect to see a brisk recovery. The effects of the COVID-19 outbreak are more like an event cycle (think 9/11) rather than a true financial crash.
Unlike the housing crisis of 2008-2009 which took 5-6 years to recover from, Economists predict there will be a recovery that will gain momentum in the final quarter of the year and into 2021. As one economist put it, the economic effects will be “sharp and short”. The true and lasting effects will depend on the course of the virus, but hoping things move along quickly which will result in little damage to the real estate market.
This energy will be released into the economy. It may take several months, but as things return there will be pent up demand for real estate! This, coupled with historically low interest rates, will be good for both buyers and sellers in Bozeman and Big Sky as well as regionally and nationally. Don’t let frightening headlines cause you anxiety, know you can always contact us to discuss the reality of what is going on.
A recession does not equal a housing crisis
Homes prices has actually appreciated during three of the five recessions.
We are continuing to represent clients who want or need to buy/sell a home during these uncertain times. During this time of social distancing, we are most grateful for technology! If you’re thinking about selling but are uneasy about people coming into your home, we can utilize 3D Matterport technology to give a virtual tour of your home. Inviting potential buyers into an immersive viewing experience without even having them take a step inside. For both our buyer and seller clients we can also utilize FaceTime, Google hangouts or YouTube video tours. This is something we do quite often and have become pros as presenting and touring homes via video. Rest assured, Greg and I are working diligently in new and innovative ways to meet your needs!
This is not like the 2008 housing crash
With all of the volatility in the stock market and uncertainty about the Coronavirus, some are concerned we may be headed for another housing crash like the one we experienced from 2006-2008. The feeling is understandable. There are many reasons, however, indicating this real estate market is nothing like 2008. If you’re concerned we’re making the same mistakes that led to the housing crash, take a look at the charts and graphs below. Read the full article with in-depth explanations here.
- Mortgage standards are not like they were back then
2. Prices are not soaring out of control
3. We have a shortage of homes on the market, not a surplus
4. Houses became too expensive to buy
5. People are equity rich, not tapped out
Keeping things in perspective
In times of uncertainty, the best thing we can do to ease fears is educate ourselves. Getting caught up in the panic of the media and anxiety of others around us is easy to do. Seeing grocery shelves emptied and schools and restaurants closed is certainly unsettling. But taking a step back and seeking out information from trusted sources is imperative. We are so lucky to live in the Bozeman and Big Sky community where we’ve already seen an outpouring of community support and strength. We will all get through this with kindness and patience. My simple message is this: let us take the time to act responsibly and do the best to care for each other and our neighbors.
In the meantime, hopefully you can enjoy some peace and reflection while social distancing and I’m sure we will all emerge in a few weeks to a lovely Montana spring with refreshed spirits!
We look forward to continuing to be a source of support and knowledge during this time, so please do not hesitate to reach out!
Amelia & Greg Smith