Area real estate a hot commodity

Dillon Tribune series: Local business and the pandemic
M.P. Regan
Wednesday, October 7, 2020
Going fast

According to experts in area real estate, the global pandemic has made the local property market active with people looking to relocate from high density urban areas to rural settings. J.P. Plutt photo

A funny thing happened to the area real estate market on the way to the economic doldrums that the coronavirus pandemic sentenced so many other markets and industries to this year.

A boom. A big boom. “This is the most dramatic one I have seen—it’s just been extremely busy,” said longtime local realtor Bette Grose of the current spike in sales for area real estate.

That spike in sales has led to an increase in the prices that local home prices are going for, according to Corinne Welborn, owner of the Best of the West Properties in Dillon.

“People will list their house at what seems to me a high price, and they are selling,” said Welborn, who cited a more than 11 percent increase this year in local home prices, with most of the spike coming in the past few months, according to figures she cited in the real estate’s Multiple Listing Services.

“If there is a house that is habitable and priced within reason, it is not on the market long,” added Welborn, noting that the only thing she and her staff are doing differently is working longer hours to handle all the interested buyers.

“Buyers are calling out of the blue,” revealed Grose of the unsolicited wave of interest that began washing over the area real estate market soon after the coronavirus started surging across the U.S. earlier this year.

A key interest rate falling even lower this past year from what already represented historical lows has also helped inspire that increased interest in area real estate, said Welborn.

“The other thing driving sales now is extremely low mortgage interest rates,” said the veteran of the real estate business for the past 35-years— a period of time that began when mortgage interest rates sat at around 12 percent—a few years after they’d climbed as high as 18 percent in the early 1980s.

“You can get a fixed rate of under 3 percent now for a 30-year mortgage. That is the lowest I’ve ever seen that. So, your buying dollars are going to go a lot further.”

Many people are using that added buying power to fuel flights from the nation’s pandemic hotspots.

“I think the coronavirus is pushing people out of the larger cities,” said Grose, who’s fielded a lot of recent calls from interested buyers currently living in urban centers in Florida, Utah, Colorado, Washington and California.

Those larger cities a lot of people are looking to move out of not only include places like Seattle and Los Angeles, but some of Montana’s bigger cities.

“We are getting buyers from Missoula, Hamilton and Bozeman—places in the state that are getting too crowded for some people,” said Pam Neumeyer, a real estate agent for Dillon’s Best of the West Properties.

“I think people are looking for something a little more rural,” said John O’Brien, board president of the Beaverhead Chamber of Commerce & Agriculture.

“And Dillon has the added attraction of the cultural and societal amenities that a lot of people don’t want to give up when they move out of urban centers,” said O’Brien, who grew up in a small town in Minnesota before moving to that state’s cultural center—the Twin Cities of Minneapolis and St. Paul—before relocating to Alaska and then Montana.

“Dillon really offers a broad range of activities for a town this size,” said O’Brien, worldclass outdoor recreational opportunities, regular local cultural happenings like Music in the Park, programs at the Southwestern Montana Family YMCA and events put on by the University of Montana Western,” pointed out the current CEO of High Peaks Federal Credit Union in Dillon.

A recent national study by the Pew Charitable Trust Foundation found that almost 10 percent of young adults have moved during the past year, many due to the pandemic.

But students who came to Dillon to pursue higher degrees in education at the University of Montana Western seem to be largely staying put during the pandemic.

“I was real concerned about what this fall would bring, but my experience is that the local rental market is just as hot as it’s been,” said Ed Hoerning, owner and property manager of Dillon Rentals, which he said gets about 80 percent of its business from Montana Western college students.

“College students returning to Dillon has historically been our big surge in rental business every year, and that’s pretty much been the case again this year,” said Hoerning, who fills most of his rentals by the middle of July and only had a few still available after Labor Day this year, just as in recent years past.

Limited availability has become a defining feature of the real estate market for buyers, as well.

“We have been so successful at selling houses this year, we are running out of listings,” said Welborn of a draining of inventory that extends to available plots of bare land in Beaverhead County.

“I think we are going to run out of lots,” said Vana Taylor, the owner of Taylor Realty in Dillon who also serves on the Beaverhead County Planning Board.

“Land that has been on market for quite a while is starting to sell now,” said Grose, who reported that buyers are extending their interest into some of the more remote spots in the county.

“Polaris is a real hotspot now. I used to appraise property up there, and it was difficult. You didn’t have any comparables because nothing had sold in a long time. But not anymore,” said Grose of the small town located about 35 miles from Dillon in the Grasshopper Valley at the south end of the Pioneer Mountains Scenic Byway.

During the pandemic, many people new to the county are venturing into even more rural portions of the area, according to Beaverhead County Planner Rob Macioroski, who said some are doing so by buying mining claims in the far reaches of the county.

“There’s no electricity or fresh water out there. They’re glorifying living off the grid, but I’m not sure a lot of those people realize how much work it is to live off the grid, especially around here. The first hard winter I think a lot of them will be heading back south,” said Macioroski, who is trying to factor all the current flows and potential future ebbs in the area’s population trends to help prepare the county for what lies ahead.

“We are currently doing county growth policy,” said Macioroski of a document that helps area officials and business people anticipate and meet coming challenges.

“We worry about how to get fire and emergency services to people building homes in areas with high risks for wildfires and avalanches,” said Macioroski.

“It’s gonna be interesting.”