How Coronavirus is affecting the Economy and Bozeman Real Estate

by Liz Nitz

We are right now in a unique situation not seen before. I thought it prudent to research how Coronavirus is affecting the economy and Bozeman real estate market

Our lives have changed drastically in the past week; kids are home from school, trips have been cancelled, gathering places closed. We also have anxiety about what is going on out there; not only do we have anxiety about being ill, or perhaps carrying the virus to someone who may be at risk for serious complications from the virus, but we also have anxiety about the fact that our financial world has been turned upside down.  This perhaps brings back bad memories of the 2008 crash and the recession that followed.

 

So let’s try and address some of these anxieties caused by the Coronavirus outbreak:

First of all, you are doing everything right if you are following the steps recommended by the CDC.  https://www.cdc.gov/coronavirus/2019-ncov/index.html  These steps are in your control and should keep you and your household healthy.  Do them and feel good about it!

At Windermere, we are fortunate enough to be backed up by a strong company with many resources.  Some of our financial and economic experts have reached out to us to explain how they see the economic impact of this and the effect on local housing market.

 

Following is a summary of likely effects of the Coronavirus to the US economy as a whole.

These were communicated by Matthew Gardner, Chief Economist for Windermere.

  • The Economy will contract. With the disruption to life, travel etc., we are all spending less money.
  • The Stock market has lost value as a result of the uncertainty of the situation and how long it will continue.
  • Home inventory on market will probably decrease in the next few months as people will not want others in their homes.
  • Buyers will want to take advantage of low interest rates but buying will probably decrease as well as people are uncertain about economy and some may need to wait for stock market to come back up.
  • Economists believe that towards Q3 and Q4, economy and stock market will pick back up.
  • Mortgage interest rates will stay low however.
  • Housing as a sector is well positioned to come out of this positively.
  • Banking rules that were put into place after 2008 have protected housing and made sure that the upside down equity positions held by people then do not exist anymore.
  • Inventory will be tight as households are being created but not enough housing being built overall in US.

 

An analytical look at Coronavirus and Bozeman real estate:

  • Our area is positioned well to weather this kind of storm. We will see some impacts as noted above but we will also rise out quicker than other areas of the country.
  • Why? Our fundamentals are strong.
  • Bozeman area is noted as #1 in economic strength for micropolitan areas in US. https://www.prnewswire.com/news-releases/policoms-2018-economic-strength-rankings-for-933-communities-announced-300585848.html
  • We have had increased demand and not enough supply of homes for many years. This has meant that our median price of a single family home has gone from $329,000 in March of 2015 to $520,000 in February of 2020 and our months of supply has gone from 4.3 months in March of 2015 to 2.2 in February of 2020.
  • Our unemployment rate is very strong most recently being at 2.4% down even from a year ago when it was 3.%. The highest is has been since 2015 is 3.4%.  The interesting thing here is that US Federal Reserve puts natural unemployment at 2.5-3.5% as people move around, change jobs etc.
  • Bozeman is a unique place to live as we all know and why it attracts so many new residents each year. Our quality of life, access to the outdoor activity, ability to earn a living make it truly distinctive.  This will not change.

 

In the immediate future, what will happen?

  • We will have at least two weeks of social distancing to help prevent the spread of this virus.
  • Diagnosed cases will rise because of increased testing.
  • The strategies that the CDC and government have recommended to prevent spread will work.
  • There will be positive news about a vaccine for the future.
  • Discomfort and anxiety will continue in our lives and in the financial markets until things become certain and we have started to see decreasing cases.
  • There is a massive fiscal stimulus coming that is pointed at people and industries most affected by this.
  • Recovery will happen relatively quick as our US economy fundamentals are strong.

 

I will continue to update my blog MoveMeToMontana.com with more information and analysis as I get it.

A disclaimer – I am not an economist but am culling information from economist’s opinions and presenting factual statistics about Montana.  However, one should read this article about how Coronavirus is affecting the economy and Bozeman real estate market as my opinion.   I have curated the information and summarized it in this piece.

Stay healthy and please do what you can to help local businesses!  Shop online with them, order take out, buy gift cards.  They really need our help right now.

 

 

 

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The following homes listed below were just listed in the last 7 days. This seller’s market is hot so we keep a close eye on the latest inventory. Subscribe below for instant updates of your ideal criteria.

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2316 Gallatin Green Boulevard 17, Bozeman, Montana 59718

2316 Gallatin Green Boulevard 17, Bozeman, Montana 59718

3Bedroom(s)
2Bathroom(s)
1,530Sqft
Beautiful 3 bed 2.5 bath 1530 square foot condo with an attached 2 car garage. This unit features gray cabinets, white hard surface countertops, stainless steel appliances for a great modern feel. Wonderful location close to walking trails, parks, gym, Costco, Target, etc. 3rd bedroom does not have a closet but seller with work with buyer and show them options. AC is an available upgrade.
$445,000

3271 Warbler Way A, Bozeman, Montana 59718

3271 Warbler Way A, Bozeman, Montana 59718

3Bedroom(s)
1Bathroom(s)
2,614Sqft
Introducing Skyline Vista, a luxury condo community located on the park in Cattail Creek. With over 2600 +/- sq. feet of living space these 3 bedroom condos live large with a long list of premium upgrades. First floor family room provides a great multi purpose room or office.
$775,000

289 Heights Circle, Bozeman, Montana 59718

289 Heights Circle, Bozeman, Montana 59718

3Bedroom(s)
2Bathroom(s)
0.61Acre
2,011Sqft
Custom Home with Additional Income Apartment and a Separate Office Space on .61-acres across from a 5-acre park! This home, built by Dan Jones, has a vaulted ceiling with alder stained trim and door package. The extra-large kitchen has quartz countertops, ceramic tile backsplash, and stainless-steel appliances. The living room features large windows and a beautiful rock fireplace.
$990,000

2938 Warbler Way 16, Bozeman, Montana 59718

2938 Warbler Way 16, Bozeman, Montana 59718

3Bedroom(s)
2Bathroom(s)
1,392Sqft
Elkhorn Condos are designed by Locati Architects. This is an end-unit 3 bedroom condo located near shopping and public transportation, trails, ponds, playgrounds. All bedrooms are located upstairs. There is a one-car attached garage. The main level includes a galley kitchen that opens to the dining and living room.
$445,000

102 N Chouteau Avenue, Bozeman, Montana 59718

102 N Chouteau Avenue, Bozeman, Montana 59718

3Bedroom(s)
2Bathroom(s)
0.23Acre
1,920Sqft
This home is calling you! It's centrally located with great access to all things 'Bozeman'. This is where neighbors come over for a 'backyard movie night' and sidewalks are filled with chalk drawings and people chatting. The outside has very nice curb appeal. The lot has plenty of mature trees and garden boxes. AND, how about your own water well for lawn and garden irrigation.
$699,000

3124 Augusta Drive, Bozeman, Montana 59715

3124 Augusta Drive, Bozeman, Montana 59715

3Bedroom(s)
2Bathroom(s)
0.25Acre
1,948Sqft
Located between downtown and the Bridger Mountains across the street from the Bridger Creek golf course, this single level home backing up to open space boasts an open floor plan and vaulted ceilings. The spacious living room features a gas fireplace and large slider out to your back deck to enjoy the views.
$850,000

986 Cassandra Ln Unit A, Bozeman, Montana 59718

986 Cassandra Ln Unit A, Bozeman, Montana 59718

3Bedroom(s)
2Bathroom(s)
1,769Sqft
BACKS TO OPEN SPACE! This condo feels more spacious due to its ideal location. Easy access to trails, parks, schools, and shops! Unit has 3 bedrooms and 2.5 baths and a 1 car garage.
$610,000

120 Kimball B, Bozeman, Montana 59718

120 Kimball B, Bozeman, Montana 59718

4Bedroom(s)
2Bathroom(s)
2,433Sqft
This charming 4 bedroom, nearly 2500sq/ft, condo is not one to miss. The beautiful kitchen features granite counter tops, and plenty of entertaining space. The bonus room on the east side of the condo is a wonderful addition to the living space of this home. The 2-car garage has plenty of space for all your toys.
$695,000

3155 Cattail A, Bozeman, Montana 59718

3155 Cattail A, Bozeman, Montana 59718

3Bedroom(s)
2Bathroom(s)
1,535Sqft
Great end unit in duplex building, with all new paint and carpet. Located in an established neighborhood with open space, trails, parks, ponds, and views. This place is move-in ready and awaiting your personal touches. Great light with lots of windows in this open main level floorplan with half bath on the main level.
$499,000
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