It doesn't appear that the slowing local and national economy has had much of an effect on the Missoula real estate market yet, which has been a seller's market since the end of the last recession. However, things could change fast as the coronavirus pandemic continues to have reverberations in the local and national economy.
Rick Meisinger, a real estate agent with ERA Lambros in Missoula, has been in the industry for 19 years.
"My phone isn't blowing up like it was a few weeks ago, but it's still busy," he said. "We're still seeing people list properties, and we're getting good activity on them. Obviously some buyers are going to be taken out of the equation due to what's going on, but some aren't. And they're hoping it's going to be an opportunity because there's not as much competition with other buyers."
Still, Meisinger hasn't seen a significant drop in home sales prices yet, even with fewer buyers.
"I haven't seen a lot as far as price reductions yet," he said. "I've seen a few, but those are just ones that needed to be done. If I said (a price drop) is going to happen that would be me opening up my crystal ball. Activity seems to be pretty aggressive with buyers. I showed one house the other day, and there were five showings around me. There's new listings coming on the market."
He said time will tell if the market is going to slow down.
Aaron Curtis, a broker with Berkshire Hathaway Homeservices Montana, said he's been surprised at how active the market has been.
"I would have assumed that we would see a more substantial reduction in folks asking to take a look at a property or folks considering selling a property," he said. "Interestingly, I personally have not witnessed a major change yet. The biggest thing I've noticed is lots of folks asking what this will mean for the market in Missoula. Some buyers are curious, asking how this is going to have an effect on their home search."
He said the main thing he's noticed is uncertainty.
"There's clearly a lot of discomfort, a lot of questions about what this disruption will look like. As it stands right now, in the immediate short term, I have not seen a major reduction (in activity) at all," he said.
In two or three weeks, he noted, activity might slow down. He said sellers also might want to hold off during this crisis, so there might be fewer listings.
Curtis said his buyers are looking at properties in the $300,000 range. Missoula's median home sales price hit a record high of $315,000 in 2019 due to a lack of inventory to keep up with strong demand. Meisinger said his serious buyers are looking at properties in the $250,000-$450,000 range.
Mortgage interest rates dropped a few weeks ago, but recently have surged back up, according to Curtis. That means it costs more money to finance a loan right now.
"I talked to a lender on Friday (March 20) and (mortgage interest rates) were up to 4.75%," Curtis said. "Most lenders believe they're going to climb back down."
(Editor's note: This story was written on March 26.)
Meisinger also said the mortgage interest rates could "change in a hurry," and he personally believed loan underwriters got overwhelmed when interest rates were low in February.
Around the country, real estate observers have noticed many more rental properties coming on the market as Airbnb owners decide that because fewer people are vacationing and purchasing short-term rentals, they need to rent out their properties long-term for income. In Missoula, on Zillow, about 38 new rental listings have been listed in the last week. For the last 90 days, there are 124 new listings.
Curtis said many buyers are optimistic that they'll be in price wars with fewer others right now.
"Yes, most buyers feel that this is going to limit the competition they have on a property they have a proper interest in pursuing," he said. "But it's also safe to say unless things improve quickly, this might also reduce listings."
Curtis looked at local statistics on the Multiple Listing Service and found that there have been 10 fewer sales through March this year compared to the same time frame last year. The number of listings that came on the market in March last year was 130 to date, and there have been 133 this year by comparison.
"Some of that is hard to parse through because it's weather dependent, so it's not necessarily as comparable, but it kind of reinforces what I'm seeing, which is that things haven't changed that much," he said.
Meisinger said he's got buyers calling him all the time, and he's constantly sending new listings to people.
"They're still acting like it's an aggressive market," he said. "Our market has been busy lately. It slowed down a little this winter. Typically, this is our prime time through June anyway, and then it can taper off in July and August as people get in their last hurrah for the summer."
Rhiannon Coburn, a Realtor with Windermere Real Estate in Missoula, said she's not an extremely busy agent, but she's heard from colleagues that buyers and sellers are holding off.
"I personally have only had one client hold off, everybody else is trying to move forward," she said. "I may not be the best gauge because I'm not as busy. But I have heard from other agents that they've had transactions canceled."
Nationally, home sales surged in February to their highest level in 13 years.
Curtis is hoping people who are thinking about selling will do it because he's seen how far prices have surged due to a lack of inventory.
"I got my license in 2015 and it's been a wild five years," he said. "I would love to see more houses on the market to help meet demand. Prices have jumped so high, it's really hard for folks who have little to no negotiating power, and they have to put in an offer above asking just to be considered."