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Will the Billings housing market boom deflate in 2021? Experts weigh in

Out-of-state consumers flocking to Montana for its 'Western charm'
Posted at 8:34 AM, Feb 11, 2021
and last updated 2021-02-11 10:44:35-05

BILLINGS - If you’ve been looking at home listings lately, chance are you’ll find inventory is low, homes are quickly under contract and prices are skyrocketing.

And it seems Montana is a hot place for people from other states to flock to as of recently.

When it comes to 2021, real estate experts can’t say for sure if the housing market boom will last, but they can say for sure that now is the time to act for consumers.

“We have become a very popular destination,” said Frosty Erben, a real estate professional with the Billings Association of Realtors.

He says Montana’s Western charm seems to be attracting people from across the country.

“This is a country that people perceive to be a place where they can have a lifestyle that is less affected by social interaction, congestion, air quality, things of that nature,” he said.

And its not a fluke. The spike in home sales seemed to move parallel with two important factors; a hot political season and COVID-19.

Erben says people are looking for solitude and finding it Montana.

“It has an effect as much as a 'River Runs Through It' had an effect,” he said.

But that’s making inventory low. Erben says they usually measure inventory in the amount of time it takes to essentially sell out. He says last year Billings had 8 months of inventory, but in the early weeks of 2021 Billings has one month of available listings.

“We have an increasing number of people coming into the market, from college graduation, as well as the influx of people from out of state and we don't have enough available housing,” he said.

Erben says he knew there was a shift coming early in 2020.

“However, this is the first shift that I've been involved in that was driven to a certain degree by a pandemic,” he said.

And if they’re not buying, they're building.

Although the real estate market is booming, there’s supply and demand issues when it comes to building materials.

“Building a new home, where it used to take four months is taking up to six months,” Erben said.

Experts all across the country are seeing the demand for lumber increasing, but the supply created a bottleneck because of the pandemic. There’s a lack of workforce and transportation backlog due to the pandemic, according to Erben.

He says its pushing the price of a new home up by several thousand dollars.

So if there’s any time to act, Erben says it’s now.

“The advice that I give people is, there's never a better time to do it than now. And the reason I say that is because we do have an unsettled economic environment,” he said.

And interest rates to refinance are teetering as low as 2 percent, according to Erben.

But because there’s so many people looking to refinance their mortgages he also says there’s a massive waiting period to do so.