While the COVID-19 pandemic may not be over, it appears that the slight lull in the housing market might be.
“I’ve listed three homes, and have sold them all within 48 hours in the last two weeks,” said Jim Dea, the President of the Great Falls Association of Realtors and a Realtor himself at ERA Advantage Realty.
While that sounds like a great deal, let’s explore why this is happening. To understand the recent surge, we must first analyze what happened when the panic surrounding the Coronavirus pandemic was around its peak.
According to Dea, there was never any real shortage of buyers. People remained interested in buying housing in Great Falls, but it was the sellers that drove the market down. Demand was there, but supply dwindled. Dea estimates that a big reason for the hesitance of many people to put their houses on the market was health-related.
In the midst of a global pandemic, would you want large groups of people that you probably don’t know walking through your home during an Open House? Probably not. It appears that sellers have begun to calm down a bit after the initial surge of fear, but that’s not the only thing that’s driving this housing spike.
“It’s kind of a perfect storm for the buyers as well because of the interest rates,” explained Dea. “Because the volatility of the stock market has driven interest rates down to near-historic or historic lows, it’s an excellent time for buyers as well. Even though we are seeing that shortage of inventory and we are having some real competitive battles to buy listings, it is still a good time for buyers because the interest rates are just fantastic right now.”
The economy as a whole took a hit during the peak of the pandemic, and the housing market was no exception. “Due to the pandemic and the stock market, we usually see a government step-in to keep mortgage interest rates low because housing is a big part of our economy,” explained Mason Walker, a mortgage loan officer at Opportunity Bank. “With lower interest rates, it increases a lot of people’s buying power, so we’ve seen a lot of people upgrade from first-time homebuyers to second-time homebuyers. With the current housing crisis where they’re at, there’s a lot of good equity positions.”
Where before there was high demand and low supply, there is now higher supply, a consistent level of supply, and historically low interest rates.
Those rates didn’t just come out of anywhere, however. Walker said that they had been trending downwards a few months prior to the start of the pandemic, and we should expect interest rates to stay low for a while.
“(The) trend looks like they’re going to stay low for a while,” he said. “Since the pandemic started, that’s when we saw the dip in interest rates. We saw a slower dip leading up to the pandemic, probably within the last six months, and then once the chaos hit, we really saw a larger dip down to the current lows which are some of the lowest of all time.”
For anyone looking to buy or a sell a home right now, both Dea and Walker agree that it’s a great time to be a buyer or a seller. Even though the competition might be stiff for sellers, it’s hard to beat the record-low interest rates.
The Great Falls Association of Realtors, NeighborWorks Great Falls, and the Montana Board of Housing all offer resources for people looking to become homebuyers or sell a home, including some specialized assistance for buying or selling property during the pandemic.