Uncertainty: New listings up in Missoula housing market; more sales fall through
Home sales across the Missoula market remain on pace with the same month last year, though local real estate experts believe it's too soon to fully understand the impacts of the coronavirus pandemic on the housing market.
With March nearly at an end and spring in the air, home sales in Missoula are down slightly over this time last year, though the number of new listings is up.
“It's hard to say what the current market is, because we've only been in this new normal for two weeks,” said Mike Nugent, the managing broker at Berkshire Hathaway Home Services in Missoula. “Sales in March are about 14 houses off of last year's pace, but new listings are up by four over last year.”
The CDC reported the first case of coronavirus in the U.S. back in January, though the virus didn't begin its rapid spread until March. The local housing market was strong in February, with 92 sales – up from 51 the prior year – at a median price of $318,000.
But Missoula County health officials began closing certain businesses two weeks ago to slow the spread of the virus. The closures have since been expanded to other businesses, and last week the state issued a mandatory stay-at-home order.
“We're seeing a little uptick in back-on-market sales, where for whatever reason something came apart, whether it's changes in the lending world or work-related issues,” said Nugent. “We're definitely dealing with that.”
While the closures and orders are intended to protect public health, they've placed added pressure on the economy. Thousands of workers have been furloughed or laid off, leading to a dramatic surge in unemployment claims.
Brint Wahlberg, an agent with Windermere and a director with the Missoula Organization of Realtors, reported a similar observation, saying a larger number of home sales have fallen through.
“We're seeing a few more instances of sales coming apart due to various reasons,” said Wahlberg. “It seems like there's a higher amount of failed sales, and they're putting houses back on the market. In some cases, it sounds like it's due to the pandemic and in other cases, it's economic concerns.”
Nugent said other aspects of the housing market continue to function, including lending, though there may be signs of nervousness there, especially regarding loans targeted to buyers with a lower down payment.
For qualified buyers, Nugent said, the lending process may be getting a little easier, though options for buyers with a lower credit score may be fewer than before.
“We're still seeing sellers wanting to sell, listings come up and go under contract, and buyers wanting to buy,” Nugent said. “I think we need to be careful not to extrapolate too much during this really unknown time. The longer it stretches out, the longer it will impact other parts of the economy, which will impact housing.”
Despite the uncertainty, Wahlberg said last week saw a number of new listings hit the market, and a number of sales go under contract. Still, he said, spring in Missoula is usually one of the market's busiest seasons, and some people have postponed trips to Missoula to shop for housing until later in the year.
“We're having tight supply issues again, but with the pandemic here, some people are definitely pressing pause and waiting to see what happens,” said Wahlberg.
Wahlberg added that new housing starts seem to be unfazed, at least for now.
“Most builders got homes and plans underway months ago, so right now there's not a lot of interference with that,” he said. “The question is the people planning to break ground in the next month or two – that might be a different story there.”