2020 Bozeman Real Estate Forecast – Home Sales History
Looking Back at 2020’s Housing Forecast – Want the 2023 Forecast?
Don’t ignore Warren Buffett’s famous quote, “Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.”
The big question, “What benefit can a ‘forecast’ do for my understanding of Bozeman’s housing market in 2020?” …not as much as you would hope.
Looking back on the April 2020 Covid forecast: How would the virus affect Bozeman real estate? Some saw a bust, few saw the boom we’ve had.
The DOW got walloped in March and then rose from its March 23, 2020 low of 18,592 during the Spring Equinox to 23,719 on Good Friday, 2020.
By December 2020, the DOW had gained over 6000 points since Good Friday, breaking 30,000 for the first time, and doing so around Thanksgiving 2020.
The Dow rose over 11,000 points in 2020!
During Q1 and Q2, 2020, both inside and outside the city, pending sales dropped through April 2020, most likely due to fear during the early stages of the pandemic.
In May, pending sales kicked upward and persist into December 2020; this continues to fuel the present housing boom in Bozeman.
The DOW remained close to that number into May 2020, after which it climbed above 25,000 and then broke 26,000 in early June 2020. The NASDAQ has made even greater gains during Q1 and Q2, 2020.
April quote: “Regarding Coronavirus, a rising DOW may inspire buyer confidence; perhaps residential Bozeman homes and condos will be attractive to those wanting to escape Covid-19 and heavily-populated, heavily impacted areas of the US.”
A variety of data and information, including forecasts, can affect the decisions you make…prudent or imprudent.
Or perhaps the forecasters felt Bozeman’s housing market would contract–fewer sales–in the next, say, three months (March-May) due to trepidation in the buyers’ market. New home construction in Bozeman was strong in May 2020.
Or even though mortgage rates were lower then than in 2019, perhaps rates could have increased, pushing some buyers out. Check Federal Fund Rate, which was .05, end of April 2020. Check Bozeman Price Trends.
Or rates could have decreased in a government effort to stimulate the housing sector…it was hard to predict Bozeman’s future housing market in that economic environment.
Building permits in February 2020 were more than 3 times those of February 2019!
We forecasted that Bozeman’s market would weather fairly well that economic downturn unless Covid-19 continued to impact the US late into 2020.
New listings for March 2019 were fewer than March 2020–during the initial scare–1786 listings vs 1969 listings, about a 10% increase in new listings 2020 over 2019.
Why more listings March 2020 in the midst of a profound economic crash? Were people getting out? How long would it take for properties to sell?
Sell, hold or buy, wait? Watch “Average Days On Market,” and “Median Sales Price,” for the next few months.
March 2020 update: the Coronavirus (Covid-19) scare, and to a lesser degree the oil market drop, was affecting the economy.
Fallout from the ~9000 point stock market collapse (↓~30%) a month afterward continued into the third week of March 2020 and would continue for quite some time. Conventional 30-year, fixed mortgage rates began rising in early March 2020.
The 2020 “forecast” was scrapped in early March due to Covid-19, but the forecast was: “since 2020 is an election year, and to stem potential cries of bias toward one political party or the other, Fed rates would probably remain around 1.6% in 2020, with mortgage rates staying under 4%.
In addition, job growth was strengthening and consumers were spending, indicating interest rate cuts were unnecessary at that time.
Also, since 2020 was a presidential election year, the Bozeman real estate forecast suggested a softening real estate market in Bozeman, with continued growth but at a slower pace than 2019, with flatter home prices and a slight decrease in Bozeman construction starts compared to 2019.
“Nationally, housing starts is expected to increase in 2020 to 1.42 million; up from 1.27 million in 2019. National Association of Realtors (NAR) suggests a 1.8% decline in US home sales in 2020.” By December 2020, new home sales were up almost 17% from a year ago in 2019.